S.Amdt. 3853

TEXT OF AMENDMENTS

SA 3815. Mr. DORGAN (for himself and Mr. Grassley) 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:

On page 1533, line 5, strike ``Section'' and insert the
following:
``(a) In General.--Not later than 60 days after the date of
enactment of this Act, the Board of Governors shall disclose
to Congress and to the public, with respect to any

[[Page S3173]]

emergency financial assistance provided during the 5-year
period preceding the date of enactment of this Act under the
authority of the Board of Governors in the third undesignated
paragraph of section 13 of the Federal Reserve Act (12 U.S.C.
343)--
``(1) the name of each financial company that received such
assistance;
``(2) the value or amount and description of the emergency
assistance provided, including loans to investment banks from
the Federal Reserve discount lending program or special
purpose entities;
``(3) the date on which the financial assistance was
provided;
``(4) the terms and conditions for the emergency
assistance; and
``(5) a full description of any collateral required by the
Board of Governors and secured from the recipients of such
emergency assistance.
``(b) Public Disclosure.--Section''.
______

SA 3816. Mr. CHAMBLISS (for himself, Mr. Shelby, Mr. McConnell, Mr.
Gregg, Mr. Crapo, Mr. Johanns, Mr. Cochran, Mrs. Hutchison, Mr. Cornyn,
Mr. Roberts, Mr. Bennett, Mr. Vitter, and Mr. Thune) 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 VII and insert the following:

TITLE VII--OVER-THE-COUNTER DERIVATIVES MARKET

SEC. 701. SHORT TITLE; PURPOSES.

(a) Short Title.--This title may be cited as the ``Over-
the-Counter Swaps Markets Transparency and Accountability Act
of 2010''.
(b) Purposes.--The purposes of this title are--
(1) to improve regulators' access to information by
establishing well-regulated repositories for the reporting of
all swaps;
(2) to repeal the statutory provisions that prohibit
regulators from overseeing the over-the-counter swaps
markets;
(3) to increase the number of derivatives transactions that
are centrally cleared;
(4) to ensure that corporate end users can continue to
hedge their unique business risks through customized
derivatives;
(5) to prevent concentration of inadequately hedged risks
in individual firms or central clearinghouses; and
(6) to provide investors and other swap market participants
with information about transactions and positions in order to
help them mark existing swap positions to market, make
informed decisions before executing future transactions, and
assess the quality of transactions they have executed.

Subtitle A--Regulatory Authority

SEC. 711. DEFINITIONS.

In this subtitle, the terms ``prudential regulator'',
``swap'', ``swap participant'', ``swap data repository'',
``associated person of a swap participant'', ``eligible
contract participant'', ``non-security-based swap execution
facility'', ``broad-based security index'', ``non-security-
based swap'', ``non-security-based swap data repository'',
``security-based swap'', and ``security-based swap data
repository'' have the meanings given the terms in section 1a
of the Commodity Exchange Act (7 U.S.C. 1a).

SEC. 712. REVIEW OF REGULATORY AUTHORITY.

(a) Consultation.--
(1) Rules; orders.--In developing and promulgating rules or
orders pursuant to this subsection--
(A) the Commodity Futures Trading Commission shall consider
the views of--
(i) the Securities and Exchange Commission; and
(ii) the prudential regulators; and
(B) the Securities and Exchange Commission shall consider
the views of--
(i) the Commodity Futures Trading Commission; and
(ii) the prudential regulators.
(2) Treatment of similar products and entities.--
(A) In general.--In adopting rules and orders under this
subsection, the Commodity Futures Trading Commission and the
Securities and Exchange Commission shall treat functionally
or economically similar products or entities described in
paragraphs (1) and (2) in a similar manner.
(B) Effect.--Nothing in this subtitle requires the
Commodity Futures Trading Commission or the Securities and
Exchange Commission to adopt joint rules or orders that treat
functionally or economically similar products or entities
described in paragraphs (1) and (2) in an identical manner.
(b) Global Rulemaking Timeframe.--Unless otherwise provided
in a particular provision of this title, or an amendment made
by this title, the Commodity Futures Trading Commission or
the Securities and Exchange Commission, or both, shall
promulgate rules and regulations required of each Commission
under this title or an amendment made by this title not later
than 1 year after the date of enactment of this Act.
(c) Regulatory Authority.--The Commodity Futures Trading
Commission and the Securities and Exchange Commission shall
prescribe such regulations as may be necessary to carry out
the provisions of this title.

SEC. 713. DETERMINATION OF STATUS OF NEW PRODUCTS.

(a) In General.--If the Securities and Exchange Commission
and the Commodity Futures Trading Commission are unable to
determine whether any new product is a security, future,
option on a future, security-based swap, or non-security-
based swap, either agency may petition the Financial
Stability Oversight Council (referred to in this Act as the
``Council'') for a binding determination of the status of the
new product as a security, future, option on a future,
security-based swap, or non-security-based swap.
(b) Deadline for Determination.--The Council shall issue
its determination within 60 days after the date of receipt of
a petition described in subsection (a).

SEC. 714. STUDY ON ENFORCEMENT CONSISTENCY.

(a) Study.--The Council shall conduct a study to compare
the nature and amount of penalties and other sanctions
imposed for violations of this title and any regulations
adopted thereunder.
(b) Report.--Not later than 4 years after the enactment of
this Act, the Council shall submit a report to the Committee
on Agriculture, Nutrition, and Forestry and the Committee on
Banking, Housing, and Urban Affairs of the Senate, and the
Committee on Agriculture and the Committee on Financial
Services of the House of Representatives that sets forth--
(1) the findings of the study required under subsection
(a); and
(2) recommendations for statutory changes to enhance the
consistency with which this Act and the regulations adopted
thereunder are enforced.

SEC. 715. JURISDICTION.

(a) The provisions of this title shall not apply to
activities outside the United States, unless those
activities--
(1) have a direct and significant connection with
activities in, or an effect on, United States commerce; or
(2) contravene such rules or regulations as the Securities
and Exchange Commission and Commodity Futures Trading
Commission may jointly, by rule or regulation, prescribe as
necessary or appropriate to prevent the evasion of any
provision of this Act.
(b) The Commodity Futures Trading Commission and the
Securities and Exchange Commission may exempt a person from
some or all requirements of this title, if they jointly
determine by rule or order that the person is subject to
comparable requirements as part of comprehensive supervision
and regulation on a consolidated basis by an appropriate
regulatory authority in a foreign jurisdiction and such
regulatory authority has entered into an information sharing
agreement with the Commodity Futures Trading Commission and
the Securities and Exchange Commission.

SEC. 716. INTERNATIONAL HARMONIZATION.

(a) International Standards.--The Department of the
Treasury shall consult and coordinate with foreign regulatory
authorities on the establishment of consistent international
standards with respect to the regulation of swaps, swap
market participants, swap data repositories, and central
clearing entities.
(b) International Information-Sharing Agreements.--Nothing
in subsection (a) shall be construed to prohibit the
Commodity Futures Trading Commission and the Securities and
Exchange Commission, from entering into information-sharing
arrangements with foreign regulators as may be deemed to be
necessary in furtherance of the purposes of this title.

SEC. 717. CONFIDENTIALITY OF INFORMATION.

(a) Confidentiality of Information Provided to Members of
Congress.--The Committee on Agriculture, Nutrition, and
Forestry and the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Agriculture and
the Committee on Financial Services of the House of
Representatives shall each establish, by rule or resolution
of such House, procedures to protect from unauthorized
disclosure all confidential information (including
information covered by sections 1905 and 1906 of title 18,
United States Code,) that is furnished to the committees and
Members of Congress under this title. Such procedures shall
be established in consultation with the appropriate
regulatory agencies.
(b) Confidentiality of Information Provided to
Regulators.--No non-public information provided to or
obtained by the Commodity Futures Trading Commission, the
Securities and Exchange Commission, any prudential regulator,
the Financial Stability Oversight Council, or the Department
of Justice under this title may be disclosed to any other
person. Nothing in this section shall authorize the Commodity
Futures Trading Commission, the Securities and Exchange
Commission, any prudential regulator, the Financial Stability
Oversight Council, or the Department of Justice to withhold
information from Congress, or prevent the Commodity Futures
Trading Commission, the Securities and Exchange Commission,
any prudential regulator, the Financial Stability Oversight
Council, or the Department of Justice from complying with a
request for information from any other Federal department or
agency.

[[Page S3174]]

SEC. 718. COMMON FRAMEWORK FOR CLEARINGHOUSE RISK MANAGEMENT.

(a) Common Framework for Risk Management.--The Commodity
Futures Trading Commission and the Securities and Exchange
Commission shall consult with the Federal Reserve Board of
Governors to jointly develop risk management supervision
programs for derivatives clearing organizations and clearing
agencies (``clearinghouses''). Not later than 1 year after
the date of enactment of this Act, the Commodity Futures
Trading Commission, the Securities and Exchange Commission,
and the Federal Reserve Board of Governors shall submit a
joint report to the Committee on Banking, Housing, and Urban
Affairs and the Committee on Agriculture, Nutrition, and
Forestry of the Senate, and the Committee on Financial
Services and the Committee on Agriculture of the House of
Representatives recommendations for--
(1) improving consistency in the clearinghouse oversight
programs of the Securities and Exchange Commission and the
Commodity Futures Trading Commission;
(2) promoting robust risk management by clearinghouses;
(3) promoting robust risk management oversight by
regulators of clearinghouses; and
(4) improving regulators' ability to monitor the potential
effects of clearinghouse risk management on the stability of
the financial system of the United States.
(b) Dually Registered Persons.--
(1) In general.--The Commodity Futures Trading Commission
and the Securities and Exchange Commission shall develop and,
subject to approval by the Council, implement an oversight
plan with respect to each person that is subject to
registration as--
(A) both a derivatives clearing organization and a clearing
agency; or
(B) both a non-security-based swap data repository and
security-based swap data repository.
(2) Contents of plans.--Each plan shall identify
recordkeeping, reporting and other requirements imposed on
the person by the Commodity Futures Trading Commission and
the Securities and Exchange Commission that are inconsistent,
an approach for eliminating inconsistencies where
appropriate, and ways in which the two commissions can
coordinate their inspection and examination of the person.
Such plan, if appropriate, may designate one regulator as the
person's primary regulator.
(3) Submission of plans.--The Commissions shall submit each
plan, including any recommended legislative changes to
facilitate the plan, to the Committee on Agriculture,
Nutrition, and Forestry and the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Agriculture and the Committee on Financial Services of the
House of Representatives on or before 1 year after the date
on which the person becomes dually registered.

SEC. 719. RECOMMENDATIONS FOR CHANGES TO PORTFOLIO MARGINING
LAWS.

Not later than 1 year after the date of enactment of this
Act, the Securities and Exchange Commission, the Commodity
Futures Trading Commission, and the prudential regulators
shall submit to the Committee on Agriculture, Nutrition, and
Forestry and the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Agriculture and
the Committee on Financial Services of the House of
Representatives recommendations for legislative changes to
the Federal laws to facilitate--
(1) the portfolio margining of securities and commodity
futures and options, commodity options, swaps, and other
financial instrument positions;
(2) the portability of customer swap positions and
associated margin upon the insolvency of a clearing
participant; and
(3) harmonization of the insolvency laws to provide for
uniform treatment across similar entities, regardless of
whether they are registered with or regulated by the
Securities and Exchange Commission or the Commodity Futures
Trading Commission.

SEC. 720. ABUSIVE SWAPS.

The Council may, by rule or order--
(1) collect information as may be necessary concerning the
markets for any types of swaps; and
(2) issue a report with respect to any types of swaps that
the Council determines to be detrimental to the financial
system stability of the United States.

Subtitle B--Regulation Non-Security-Based of Swap Markets

SEC. 721. DEFINITIONS.

(a) In General.--Section 1a of the Commodity Exchange Act
(7 U.S.C. 1a) is amended--
(1) by redesignating paragraphs (2), (3) through (17), (18)
through (23), (24) through (28), (29), (30), (31) through
(33), and (34) as paragraphs (5), (8) through (22), (26)
through (31), (34) through (38), (40), (41), (43) through
(45), and (49), respectively;
(2) by inserting after paragraph (1) the following:
``(2) Appropriate federal banking agency.--The term
`appropriate Federal banking agency' has the meaning given
the term in section 3 of the Federal Deposit Insurance Act
(12 U.S.C. 1813).
``(3) Associated person of a swap participant.--
``(A) In general.--The term `associated person of a swap
participant' means--
``(i) any partner, officer, director, or branch manager of
a swap participant (including any individual who holds a
similar status or performs a similar function with respect to
any partner, officer, director, or branch manager of a swap
participant);
``(ii) any person that directly or indirectly controls, is
controlled by, or is under common control with, a swap
participant; and
``(iii) any employee of a swap participant.
``(B) Exclusion.--Other than for purposes of section
4s(b)(6), the term `associated person of a swap participant'
does not include any person associated with a swap
participant the functions of which are solely clerical or
ministerial.
``(4) Board.--The term `Board' means the Board of Governors
of the Federal Reserve System.'';
(3) by inserting after paragraph (5) (as redesignated by
paragraph (1)) the following:
``(6) Broad-based security index.--The term `broad-based
security index' means an index that--
``(A) is not a narrow-based security index, as defined in
this section; or
``(B) the Commission and the Securities and Exchange
Commission have jointly determined should not be treated as a
narrow-based security index.
``(7) Cleared swap.--The term `cleared swap' means any swap
that is, directly or indirectly, submitted to and cleared by
a derivatives clearing organization registered with the
Commission or a clearing agency regulated with the Securities
and Exchange Commission.'';
(4) in paragraph (10) (as redesignated by paragraph (1)),
by inserting ``security futures product, or non-security-
based swap'' after ``facility,'';
(5) in paragraph (11)(A)(i)(I) (as redesignated by
paragraph (1)), by striking ``made or to be made on or
subject to the rules of a contract market or derivatives
transaction execution facility'' and inserting ``, security
futures product, or non-security-based swap'';
(6) in paragraph (16) (as redesignated by paragraph (1)) in
subparagraph (A), in the matter preceding clause (i), by
striking ``paragraph (12)(A)'' and inserting ``paragraph
(17)(A)'';
(7) in paragraph (17) (as redesignated by paragraph (1))--
(A) in subparagraph (A)--
(i) in the matter following clause (vii)(III)--

(I) by striking ``section 1a (11)(A)'' and inserting
``paragraph (16)(A)''; and
(II) by striking ``$25,000,000'' and inserting
``$50,000,000''; and

(ii) in clause (xi), in the matter preceding subclause (I),
by striking ``total assets in an amount'' and inserting
``amounts invested on a discretionary basis, the aggregate of
which is'';
(8) in paragraph (21) (as redesignated by paragraph (1)),
by inserting ``security futures product, or non-security-
based swap'' after ``of any contract market or derivatives
transaction execution facility'';
(9) in paragraph (22) (as redesignated by paragraph (1)),
by inserting ``, security futures product, or non-security-
based swap'' after ``of any contract market or derivatives
transaction execution facility'';
(10) by inserting after paragraph (22) (as redesignated by
paragraph (1)) the following:
``(23) Foreign exchange forward.--The term `foreign
exchange forward' means a transaction that--
``(A) occurs at a later time on the trade date or on a
specific future date; and
``(B) solely involves--
``(i) the exchange of 2 different currencies at a fixed
rate agreed to at the inception of the contract; or
``(ii) 1 or more payments determined by reference to the
rate of exchange of 2 different currencies, or the movement
thereof in accordance with a method agreed to at the
inception of a contract.
``(24) Foreign exchange swap.--The term `foreign exchange
swap' means a transaction that does not involve any payment
or delivery based on the level of interest rates, the price
of any commodity other than a currency, or the price of, or
default under, any debt or equity security or loan and solely
involves--
``(A) the exchange of 2 different currencies at a fixed
rate agreed to at the inception of the contract that occurs
at a later time on the trade date or on a specific future
date and a reverse exchange of the same currencies at a date
further in the future; or
``(B) 1 or more payments determined by reference to the
rate of exchange of 2 different currencies, or the movement
thereof in accordance with a method agreed to at the
inception of the contract, at a later time on the trade date
or on a specific future date and a payment at a date further
in the future that is determined by reference to the rate of
exchange of the same currencies or the movement thereof in
accordance with a method agreed to at the inception of the
contract.
``(25) Foreign exchange option.--The term `foreign exchange
option' means a transaction, including a put or a call, that
solely entitles the buyer, upon exercise, on a specified date
or upon a specified event--
``(A) to purchase from the seller a specified quantity or 1
or more currencies and to sell to the seller a specified
quantity of 1 or more currencies; or
``(B) to require the seller to make a payment determined by
reference to the exchange rate of such currencies or the
movement thereof in accordance with a method agreed to at the
inception of the contract.'';

[[Page S3175]]

(11) in paragraph (28) (as redesignated by paragraph (1))--
(A) in subparagraph (A)--
(i) by inserting ``, security futures product, or non-
security-based swap'' after ``facility''; and
(ii) by striking ``; and'' and inserting a semicolon;
(B) in subparagraph (B), by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following:
``(C) Exclusion.--The term `futures commission merchant'
does not include a person who acts only as a counterparty for
non-security-based swaps with eligible contract participants
and who does not otherwise engage in the activities of a
futures commission merchant.'';
(12) in paragraph (30) (as redesignated by paragraph (1)),
in subparagraph (B), by striking ``state'' and inserting
``State'';
(13) in paragraph (31) (as redesignated by paragraph (1)),
by inserting ``security futures product, or non-security-
based swap,'' after ``facility'';
(14) by inserting after paragraph (31) (as redesignated by
paragraph (1)) the following:
``(32) Swap participant.--
``(A) In general.--The term `swap participant' means any
person who--
``(i) is engaged in the business of purchasing or selling
swaps for such person's own account or for others;
``(ii) is making a market in swaps; or
``(iii) engages in transactions in swaps and is not a swap
end user.
``(B) Exceptions.--A person shall not be deemed to be a
swap participant pursuant to subparagraph (A)--
``(i) solely because that person buys or sells swaps for
such person's own account or the account of any person under
common control with such person, either individually or in a
fiduciary capacity, but not as a part of a regular business;
or
``(ii) if that person engages in a de minimis quantity of
activities described in subparagraph (A) in connection with
transactions with or on behalf of customers.
``(33) Swap end user.--
``(A) In general.--The term `swap end user' means any
person the gross aggregate notional value of whose
outstanding swaps that do not qualify as bona fide hedging
swap transactions--
``(i) is 5 percent or less of the gross aggregate notional
value of the person's outstanding swaps; or
``(ii) is 7 percent or less of the gross aggregate notional
value of the person's outstanding swaps and security-based
swaps, provided that the aggregate notional value of the
person's outstanding swaps and security-based swaps that do
not qualify as bona fide hedging transactions and were
executed in connection with the person's commercial
transactions is 2 percent or more of the gross aggregate
notional value of the person's outstanding swaps.
``(B) Enumerated swap end users.--The term `swap end user'
shall include--
``(i) an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.); and
``(ii) an employee benefit plan as defined in section 3(3)
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1002(3)) that is subject to title I of that Act (29
U.S.C. 1001 et seq.).
``(C) Enumerated exceptions.--The term `swap end user'
shall not include--
``(i) entities defined in section 1303(20) of the Federal
Housing Enterprises Financial Safety and Soundness Act of
1992 (12 U.S.C. 4502(20)); or
``(ii) an investment fund that would be an investment
company (as defined in section 3 of the Investment Company
Act o f 1940 (15 U.S.C. 80a-3)) but for paragraph (1) or (7)
of section 3(c) of that Act (15 U.S.C. 80a-3(c)), and is not
a partnership or other entity or any subsidiary that is
primarily invested in physical assets (which shall include
but not be limited to commercial real estate) directly or
through interests in partnerships or limited liability
companies that own such assets.
``(D) Availability of information.--Upon written request
from the Commission, the Securities and Exchange Commission,
or the Financial Stability Oversight Council, a swap end user
must provide information regarding the swaps that it holds.
This information may not be disclosed to any other person.
Nothing in this subsection shall authorize the Commission,
the Securities and Exchange Commission, or the Financial
Stability Oversight Council to withhold information from
Congress, or prevent the Commission, the Securities and
Exchange Commission, or the Financial Stability Oversight
Council from complying with a request for information from
any other Federal department or agency or foreign government
with which the Commission, the Securities and Exchange
Commission, or the Financial Stability Oversight Council has
an information sharing arrangement that requests the
information for purposes within the scope of its
jurisdiction, or complying with an order of a court of the
United States in an action brought by the United States or
the Commission.
``(33A) Bona fide hedging swap transaction.--
``(A) In general.--The term `bona fide hedging swap
transaction' means a purchase or sale by any person of a bona
fide swap that is economically appropriate to the reduction
or offsetting of risks arising from--
``(i) the potential change in the value of assets which
such person owns, produces, manufactures, processes, or
merchandises or anticipates owning, producing, manufacturing,
processing, or merchandising;
``(ii) the potential change in the cost or value of
liabilities which such person owns or anticipates incurring;
or
``(iii) the potential change in the cost or value of goods
or services which such person provides, purchases, or
anticipates providing or purchasing.
``(B) Prevention of evasion.--A swap transaction that is
undertaken solely for the purpose of avoiding registration as
a swap participant shall not constitute a bona fide hedging
swap transaction.'';
(15) by inserting after paragraph (38) (as redesignated by
paragraph (1)) the following:
``(39) Prudential regulator.--The term `prudential
regulator' means--
``(A) the Office of the Comptroller of the Currency, in the
case of--
``(i) any national banking association;
``(ii) any Federal branch or agency of a foreign bank; or
``(iii) any Federal savings association;
``(B) the Federal Deposit Insurance Corporation, in the
case of--
``(i) any insured State bank;
``(ii) any foreign bank having an insured branch; or
``(iii) any State savings association;
``(C) the Board of Governors of the Federal Reserve System,
in the case of--
``(i) any noninsured State member bank;
``(ii) any branch or agency of a foreign bank with respect
to any provision of the Federal Reserve Act (12 U.S.C. 221 et
seq.) which is made applicable under the International
Banking Act of 1978 (12 U.S.C. 3101 et seq.);
``(iii) any foreign bank which does not operate an insured
branch;
``(iv) any agency or commercial lending company other than
a Federal agency; or
``(v) supervisory or regulatory proceedings arising from
the authority given to the Board of Governors under section
7(c)(1) of the International Banking Act of 1978 (12 U.S.C.
3105(c)(1)), including such proceedings under the Financial
Institutions Supervisory Act of 1966 (12 U.S.C. 1464 et
seq.);
``(D) the Federal Housing Finance Agency, in the case of a
swap participant that is a regulated entity (as defined in
section 1303(20) of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4502(20))); and
``(E) the Farm Credit Administration, in the case of a swap
participant that is an institution chartered under the Farm
Credit Act of 1971 (12 U.S.C. 2001 et seq.).'';
(16) in paragraph (40) (as redesignated by paragraph (1))--
(A) by striking subparagraph (B);
(B) by redesignating subparagraphs (C), (D), and (E) as
subparagraphs (B), (C), and (F), respectively;
(C) in subparagraph (C) (as so redesignated), by striking
``and'';
(D) by inserting after subparagraph (C) (as so
redesignated) the following:
``(D) a non-security-based swap execution facility
registered under section 5h;
``(E) a non-security-based swap data repository; and'';
(17) by inserting after paragraph (41) (as redesignated by
paragraph (1)) the following:
``(42) Security-based swap.--The term `security-based swap'
has the meaning given the term in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
``(42A) Non-security-based swap.--The term `non-security-
based swap' means any swap that is not a security-based
swap.'';
(18) in paragraph (45) (as redesignated by paragraph (1)),
by striking ``subject to section 2(h)(7)'' and inserting
``subject to section 2(h)(5)'';
(19) by inserting after paragraph (45) (as redesignated by
paragraph (1)) the following:
``(46) Swap.--
``(A) In general.--The term `swap' means any agreement,
contract, or transaction that--
``(i) is a put, call, cap, floor, collar, or similar option
of any kind that is for the purchase or sale, or based on the
value, of 1 or more interest or other rates, currencies,
commodities, securities, instruments of indebtedness,
indices, quantitative measures, or other financial or
economic interests or property of any kind;
``(ii) provides for any purchase, sale, payment, or
delivery (other than a dividend on an equity security) that
is dependent on the occurrence, nonoccurrence, or the extent
of the occurrence of an event or contingency associated with
a potential financial, economic, or commercial consequence;
``(iii) provides on an executory basis for the exchange, on
a fixed or contingent basis, of 1 or more payments based on
the value or level of 1 or more interest or other rates,
currencies, commodities, securities, instruments of
indebtedness, indices, quantitative measures, or other
financial or economic interests or property of any kind, or
any interest therein or based on the value thereof, and that
transfers, as between the parties to the transaction, in
whole or in part, the financial risk associated with a future
change in any such value or level without also conveying a
current or future direct or indirect ownership interest in an
asset (including any enterprise or investment pool) or
liability that incorporates the financial risk so
transferred, including any agreement, contract, or
transaction commonly known as--

``(I) an interest rate swap;
``(II) a rate floor;
``(III) a rate cap;
``(IV) a rate collar;

[[Page S3176]]

``(V) a cross-currency rate swap;
``(VI) a basis swap;
``(VII) a currency swap;
``(VIII) a foreign exchange swap;
``(IX) a total return swap;
``(X) a broad-based security index swap;
``(XI) an equity index swap;
``(XII) an equity swap;
``(XIII) a debt index swap;
``(XIV) a debt swap;
``(XV) a credit spread;
``(XVI) a credit default swap;
``(XVII) a credit swap;
``(XVIII) a weather swap;
``(XIX) an energy swap;
``(XX) a metal swap;
``(XXI) an agricultural swap;
``(XXII) an emissions swap; and
``(XXIII) a commodity swap;

``(iv) provides for the purchase or sale, on a fixed,
contingent, or variable basis, of any commodity, currency,
instrument, interest, right, service, good, article, or
property of any kind;
``(v) is an agreement, contract, or transaction that is, or
in the future becomes, commonly known to the trade as a swap;
or
``(vi) is any combination or permutation of, or option on,
any agreement, contract, or transaction described in clauses
(i) through (v).
``(B) Exclusions.--The term `swap' does not include--
``(i) any contract of sale of a commodity for future
delivery traded on or subject to the rules of any board of
trade designated as a contract market under section 5 or 5f;
``(ii) any purchase or sale of a nonfinancial commodity for
deferred or delayed shipment or delivery, so long as the
transaction provides for physical delivery and is undertaken
as part of, or in contemplation of, commercial or
merchandising activities;
``(iii) any put, call, straddle, option, or privilege on
any security, certificate of deposit, or group or index of
securities, including any interest therein or based, in whole
or in part, on the value thereof, whether physically or cash
settled, unless such agreement, contract, or transaction
predicates such purchase or sale (or a net cash payment in
lieu thereof) on the occurrence of a bona fide contingency
that might reasonably be expected to affect or be affected by
the creditworthiness of 1 or more reference entities;
``(iv) any agreement, contract, or transaction that is
executed or traded on a national securities exchange
registered pursuant to section 6(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78f(a));
``(v) any purchase or sale of 1 or more securities on a
non-contingent basis for deferred or delayed delivery;
``(vi) any agreement, contract, or transaction providing
for the purchase or sale of 1 or more securities (or a net
cash payment in lieu thereof) on a contingent basis, unless
such agreement, contract, or transaction predicates such
purchase or sale (or a net cash payment in lieu thereof) on
the occurrence of a bona fide contingency that might
reasonably be expected to affect or be affected by the
creditworthiness of 1 or more reference entities;
``(vii) any agreement, contract, or transaction for the
purchase or sale, on an immediate settlement basis within the
relevant regular way settlement cycle, of any currency,
commodity, security, instrument of indebtedness, financial
instrument, or property of any kind, or any interest therein;
``(viii) any note, bond, or evidence of indebtedness that
is a security as defined in section 2(a)(1) of the Securities
Act of 1933 (15 U.S.C. 77b(a)(1)) or paragraph (10) of this
subsection, or that would be a `swap' pursuant to section
3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)) solely as a result of bearing a variable rate of
return;
``(ix) any agreement, contract, or transaction that is--

``(I) based on, or references, a security; and
``(II) entered into directly or through an underwriter (as
defined in section 2(a)(11) of the Securities Act of 1933)
(15 U.S.C. 77b(a)(11)) by the issuer of such security;

``(x) any security futures product;
``(xi) any agreement, contract, or transaction that is--

``(I) predominantly a banking product as provided in
section 405 of the Commodity Futures Modernization Act of
2000 (Public Law 106-554; 114 Stat. 2763A-455);
``(II) not marketed or sold as an alternative to a swap;
and
``(III) issued or sold by a bank as defined in section 3(a)
of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a));

``(xii) any hybrid instrument that is predominantly a
security as provided in section 2(f) as in effect on the day
before the date of enactment of this paragraph;
``(xiii)(I) any identified banking product specified in
paragraphs (1) through (5) of section 206(a) of the Gramm-
Leach-Bliley Act (15 U.S.C. 78c(a)), that is--

``(aa) not marketed or sold as an alternative to a swap,
and
``(bb) issued or sold by a bank, as defined in section 3(a)
of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)); or

``(II) any agreement, contract, or transaction executed in
conjunction with an identified banking product described in
subclause (I), between a bank and a borrower that is not an
eligible contract participant to convert the variable rate
interest cost of debt to a fixed rate interest cost or vice
versa, or to limit the maximum interest cost of such debt;
``(xiv) any mortgage or mortgage purchase commitment, or
any sale of installment loan contracts or receivables, if
such product or instrument is not marketed or sold as an
alternative to a swap;
``(xv) any contract, agreement or transaction that provides
a crediting interest rate and guaranty or financial assurance
of liquidity at contract or book value prior to maturity
offered by a bank or insurance company for the benefit of any
individual or commingled fund available as an investment in a
defined contribution plan (as defined in section 3(34) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1002(34)) or a qualified tuition program (as defined in
section 529 of the Internal Revenue Code of 1986 (26 U.S.C.
529));
``(xvi) any agreement, contract, or transaction a
counterparty of which is a Federal Reserve bank, the United
States government, a foreign central bank, or a foreign
government;
``(xvii) any agreement, contract, or transaction for the
performance of services;
``(xviii) any agreement, contract, or transaction that is
commercial in nature or employment-related, that is not
marketed as a swap, and that would otherwise be a `swap'
pursuant to subparagraph (A) solely as a result of an
incidental price, compensation, or rate escalation clause;
``(xix) any agreement, contract, or transaction--

``(I) under which a payment or performance is dependent on
the occurrence, non-occurrence, or the extent of the
occurrence of a contingency beyond the direct control of the
parties to the agreement, contract, or transaction and which
conditions such payment or performance obligation on the
incurrence of a loss arising from such contingency; and
``(II) that is an insurance or endowment policy or annuity
contract or optional annuity contract issued by a corporation
that is subject to the supervision of the insurance
commissioner, bank commissioner, or any agency or officer
performing like functions, of any State or territory of the
United States or the District of Columbia, unless such
agreement, contract, or transaction predicates such purchase
or sale (or a net cash payment in lieu thereof) on the
occurrence of a bona fide contingency that might reasonably
be expected to affect or be affected by the creditworthiness
of one or more reference entities;

``(xx) any agreement, contract, or transaction that the
Commission, jointly with the Securities and Exchange
Commission, determines, by rule or order and consistent with
the purposes of the Over-the-Counter Swaps Markets
Transparency and Accountability Act of 2010, should be
excluded from the definition of swap.
``(47) Non-security-based swap data repository.--The term
`non-security-based swap data repository' means any person
that collects, calculates, prepares, or maintains information
or records with respect to transactions or positions in, or
the terms and conditions of, non-security-based swaps entered
into by third parties.
``(48) Non-security-based swap execution facility.--The
term `non-security-based swap execution facility' means a
facility in which multiple participants have the ability to
execute or trade non-security-based swaps by accepting bids
and offers made by other participants that are open to
multiple participants in the facility or system, or
confirmation facility, that--
``(A) facilitates the execution of non-security-based swaps
between persons; and
``(B) is not a designated contract market.''; and
(20) in paragraph (49) (as redesignated by paragraph (1)),
in subparagraph (A)(i), by striking ``partipants'' and
inserting ``participants''.
(b) Conforming Amendments.--
(1) Section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act
(7 U.S.C. 2(c)(2)(B)(i)(II)) is amended--
(A) an item (cc)--
(i) in subitem (AA), by striking ``section 1a(20)'' and
inserting ``section 1a''; and
(ii) in subitem (BB), by striking ``section 1a(20)'' and
inserting ``section 1a''; and
(B) in item (dd), by striking ``section 1a(12)(A)(ii)'' and
inserting ``section 1a(17)(A)(ii)''.
(2) Section 4m(3) of the Commodity Exchange Act (7 U.S.C.
6m(3)) is amended by striking ``section 1a(6)'' and inserting
``section 1a''.
(3) Section 4q(a)(1) of the Commodity Exchange Act (7
U.S.C. 6o-1(a)(1)) is amended by striking ``section 1a(4)''
and inserting ``section 1a(9)''.
(4) Section 5(e)(1) of the Commodity Exchange Act (7 U.S.C.
7(e)(1)) is amended by striking ``section 1a(4)'' and
inserting ``section 1a(9)''.
(5) Section 5a(b)(2)(F) of the Commodity Exchange Act (7
U.S.C. 7a(b)(2)(F)) is amended by striking ``section 1a(4)''
and inserting ``section 1a(9)''.
(6) Section 5b(a) of the Commodity Exchange Act (7 U.S.C.
7a-1(a)) is amended, in the matter preceding paragraph (1),
by striking ``section 1a(9)'' and inserting ``section 1a''.
(7) Section 5c(c)(2)(B) of the Commodity Exchange Act (7
U.S.C. 7a-2(c)(2)(B)) is amended by striking ``section
1a(4)'' and inserting ``section 1a(9)''.
(8) Section 6(g)(5)(B)(i) of the Securities Exchange Act of
1934 (15 U.S.C. 78f(g)(5)(B)(i)) is amended--
(A) in subclause (I), by striking ``section 1a(12)(B)(ii)''
and inserting ``section 1a(17)(B)(ii)''; and

[[Page S3177]]

(B) in subclause (II), by striking ``section 1a(12)'' and
inserting ``section 1a(17)''.
(9) The Legal Certainty for Bank Products Act of 2000 (7
U.S.C. 27 et seq.) is amended--
(A) in section 402--
(i) in subsection (a)(7), by striking ``section 1a(20)''
and inserting ``section 1a'';
(ii) in subsection (b)(2), by striking ``section 1a(12)''
and inserting ``section 1a'';
(iii) in subsection (c), by striking ``section 1a(4)'' and
inserting ``section 1a''; and
(iv) in subsection (d)--

(I) in the matter preceding paragraph (1), by striking
``section 1a(4)'' and inserting ``section 1a(9)'';
(II) in paragraph (1)--

(aa) in subparagraph (A), by striking ``section 1a(12)''
and inserting ``section 1a''; and
(bb) in subparagraph (B), by striking ``section 1a(33)''
and inserting ``section 1a'';

(III) in paragraph (2)--

(aa) in subparagraph (A), by striking ``section 1a(10)''
and inserting ``section 1a'';
(bb) in subparagraph (B), by striking ``section
1a(12)(B)(ii)'' and inserting ``section 1a(18)(B)(ii)'';
(cc) in subparagraph (C), by striking ``section 1a(12)''
and inserting ``section 1a(17)''; and
(dd) in subparagraph (D), by striking ``section 1a(13)''
and inserting ``section 1a''; and
(B) in section 404(1) by striking ``section 1a(4)'' and
inserting ``section 1a''.
(c) Legal Certainty for Certain Transactions in Exempt
Commodities.--
(1) Petition.--Not later than 60 days after the date of
enactment of this Act, a person may submit to the Commodity
Futures Trading Commission a petition to remain subject to
section 2(h) of the Commodity Exchange Act (7 U.S.C. 2(h))
(as in effect on the day before the date of enactment of this
Act).
(2) Temporary allowance to operate under section 2(h).--The
Commodity Futures Trading Commission--
(A) shall consider any petition submitted under subsection
(a) in a prompt manner; and
(B) may allow a person to continue operating subject to
section 2(h) of the Commodity Exchange Act (7 U.S.C. 2(h))
(as in effect on the day before the date of enactment of this
Act) for not longer than a 1-year period.
(d) Agricultural Swaps.--
(1) In general.--Except as provided in paragraph (2), no
person shall offer to enter into, or confirm the execution
of, any swap in an agricultural commodity (as defined by the
Commodity Futures Trading Commission).
(2) Exception.--Notwithstanding paragraph (1), a person may
offer to enter into, enter into, or confirm the execution of,
any swap in an agricultural commodity pursuant to section
4(c) of the Commodity Exchange Act (7 U.S.C. 6(c)) or any
rule, regulation, or order issued thereunder (including any
rule, regulation, or order in effect as of the date of
enactment of this Act) by the Commodity Futures Trading
Commission to allow swaps under such terms and conditions as
the Commission shall prescribe.

SEC. 722. JURISDICTION.

(a) Exclusive Jurisdiction.--Section 2(a)(1)(A) of the
Commodity Exchange Act (7 U.S.C. 2(a)(1)(A)) is amended in
the first sentence--
(1) by inserting ``the Over-the-Counter Swaps Markets
Transparency and Accountability Act of 2010 (including an
amendment made by that Act) and'' after ``otherwise provided
in'';
(2) by striking ``(c) through (i) of this section'' and
inserting ``(c) and (f)'';
(3) by striking ``contracts of sale'' and inserting ``non-
security-based swaps or contracts of sale''; and
(4) by striking ``or derivatives transaction execution
facility registered pursuant to section 5 or 5a'' and
inserting ``pursuant to section 5''.
(b) Regulation of Swaps Under Federal and State Law.--
Section 12 of the Commodity Exchange Act (7 U.S.C. 16) is
amended by adding at the end the following:
``(h) Regulation of Swaps as Insurance Under State Law.--A
swap--
``(1) shall not be considered to be insurance; and
``(2) may not be regulated as an insurance contract under
the law of any State.''.
(c) Agreements, Contracts, and Transactions Traded on an
Organized Exchange.--Section 2(c)(2)(A) of the Commodity
Exchange Act (7 U.S.C. 2(c)(2)(A)) is amended--
(1) in clause (i), by striking ``or'' at the end;
(2) by redesignating clause (ii) as clause (iii); and
(3) by inserting after clause (i) the following:
``(ii) a non-security-based swap; or''.
(d) Applicability.--Section 2 of the Commodity Exchange Act
(7 U.S.C. 2) (as amended by section 723(a)(3)) is amended by
adding at the end the following:
``(i) Applicability.--The swap-related provisions of this
Act that were enacted by the Over-the-Counter Swaps Markets
Transparency and Accountability Act of 2010 (including any
rule prescribed or regulation promulgated under that Act),
shall not apply to activities outside the United States
unless those activities--
``(1) have a direct and significant connection with
activities in, or effect on, commerce of the United States;
or
``(2) contravene such rules or regulations as the
Commission may prescribe or promulgate as are necessary or
appropriate to prevent the evasion of any provision of this
Act that was enacted by the Over-the-Counter Swaps Markets
Transparency and Accountability Act of 2010.''.

SEC. 723. CLEARING.

(a) Clearing Requirement.--
(1) In general.--Section 2 of the Commodity Exchange Act (7
U.S.C. 2) is amended--
(A) by striking subsections (d), (e), (g), and (h); and
(B) by redesignating subsection (i) as subsection (g).
(2) Swaps; limitation on participation.--Section 2 of the
Commodity Exchange Act (7 U.S.C. 2) (as amended by paragraph
(1)) is amended by inserting after subsection (c) the
following:
``(d) Swaps.--Nothing in this Act (other than subparagraphs
(A) and (B) of subsection (a)(1), subsections (f) and (g),
sections 1a, 2(e), 2(h), 4(c), 4a, 4b, and 4b-1, subsections
(a), (b), and (g) of section 4c, sections 4d, 4e, 4f, 4g, 4h,
4i, 4j, 4k, 4l, 4m, 4n, 4o, 4p, 4r, 4s, 4t, 5, 5b, 5c, 5e,
and 5h, subsections (c) and (d) of section 6, sections 6c,
6d, 8, 8a, and 9, subsections (e)(2) and (f) of section 12,
subsections (a) and (b) of section 13, sections 17, 20, 21,
and 22(a)(4), and any other provision of this Act that is
applicable to registered entities and Commission registrants)
governs or applies to a swap.
``(e) Limitation on Participation.--It shall be unlawful
for any person, other than an eligible contract participant,
to enter into a non-security-based swap unless the non-
security-based swap is entered into on, or subject to the
rules of, a board of trade designated as a contract market
under section 5.''.
(3) Mandatory clearing of non-security-based swaps.--
Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is
amended by inserting after subsection (g) (as redesignated by
paragraph (1)(B)) the following:
``(h) Clearing Requirement.--
``(1) Swaps subject to mandatory clearing requirement.--
``(A) In general.--In accordance with subparagraph (B), the
Commission shall, jointly with the Securities and Exchange
Commission and the Federal Reserve Board of Governors, adopt
rules to establish criteria for determining that a swap or
any group, category, type, or class of swap is required to be
cleared.
``(B) Factors.--In carrying out subparagraph (A), the
following factors shall be considered:
``(i) Whether 1 or more derivatives clearing organizations
or clearing agencies accepts the swap or group, category,
type, or class of swap for clearing.
``(ii) Whether the swap or group, category, type, or class
of swap is traded pursuant to standard documentation and
terms.
``(iii) The liquidity of the swap or group, category, type,
or class of swap and its underlying commodity, security,
security of a reference entity, or group or index thereof.
``(iv) The ability to value the swap group, category, type,
or class of swap and its underlying commodity, security,
security of a reference entity, or group or index thereof
consistent with an accepted pricing methodology, including
the availability of intraday prices.
``(v) The size of the market for the swap or group,
category, type, or class of swap and the available capacity,
operational expertise, and resources of the derivatives
clearing organization or clearing agency that accepts it for
clearing.
``(vi) Whether a clearing mandate would mitigate risk to
the financial system or whether it would unduly concentrate
risk in a clearing participant, derivatives clearing
organization, or clearing agency in a manner that could
threaten the solvency of that clearing participant, the
derivatives clearing organization, or the clearing agency.
``(vii) Such other factors as the Commission, the
Securities and Exchange Commission, and the Federal Reserve
Board of Governors jointly may determine are relevant.
``(C) Non-security-based swaps subject to clearing
requirement.--The Commission--
``(i) shall review each non-security-based swap, or any
group, category, type, or class of non-security-based swap
that is currently listed for clearing and those which a
derivatives clearing organization notifies the Commission
that the derivatives clearing organization plans to list for
clearing after the date of enactment of this subsection;
``(ii) may require, pursuant to the rules adopted under
clause (i) and through notice-and-comment rulemaking, that a
particular non-security-based swap, group, category, type, or
class of non-security-based swap must be cleared if--

``(I) both counterparties are swap participants;
``(II) the transaction was entered into after the later of
the date of publication of the rules adopted under
subparagraph (A) in the Federal Register or the effective
date of the requirement; and
``(III) one counterparty directly or indirectly controls,
is controlled by, or is under common control with the other
counterparty, provided, however, that the Commission, jointly
with the Financial Stability Oversight Council, may
determine, by rule or order, that transactions between
certain parties under common control are subject to any
requirement to clear under clause (ii); and

[[Page S3178]]

``(iii) shall rely on economic analysis provided by
economists of the Commission in making any determination
under clause (ii), which economic analysis may refer to any
peer-reviewed or other relevant literature conducted by
independent researchers.
``(D) Effect.--
``(i) In general.--Nothing in this paragraph affects the
ability of a derivatives clearing organization to list for
permissive clearing any swap, or group, category, type, or
class of swap.
``(ii) Prohibition.--The Commission shall not compel a
derivatives clearing organization to list a swap, group,
category, type, or class of swap for clearing if the
derivatives clearing organization determines that the swap,
group, category, type, or class of swap would adversely
impact its business operations, impair the financial
integrity of the derivatives clearing organization, or pose a
threat to the financial stability of the United States.
``(E) Prevention of evasion.--The Commission may prescribe
rules, or issue interpretations of such rules, as necessary
to prevent evasions of any requirement to clear under
subparagraph (C). In issuing such rules or interpretations,
the Commission shall consider--
``(i) the extent to which the terms of the non-security-
based swap, group, category, type, or class of non-security-
based swap are similar to the terms of other non-security-
based swaps, groups, categories, types, or classes of non-
security-based swap that are required to be cleared by swap
participants under subparagraph (C); and
``(ii) whether there is an economic purpose for any
differences in the terms of the non-security-based swap or
group, category, type, or class of non-security-based swap
that are required to be cleared by swap participants under
subparagraph (C).
``(F) Elimination of requirement to clear.--The Commission
may, pursuant to the rules adopted under subparagraph (A) and
through notice-and-comment rulemaking, rescind a requirement
imposed under subparagraph (C) with respect to a non-
security-based swap, group, category, type, or class of non-
security-based swap.
``(G) Petition for rulemaking.--Any person may file a
petition, pursuant to the rules of practice of the
Commission, requesting that the Commission use its authority
under subparagraph (C) to require swap participants to clear
a particular non-security-based swap, group, category, type,
or class of non-security-based swap or to use its authority
under subparagraph (F) to rescind a requirement for non-
security-based swap participants to clear a particular non-
security-based swap, group, category, type, or class of non-
security-based swap.
``(H) Option to clear for counterparties that are not swap
participants.--Before entering into a non-security-based swap
transaction, any counterparty that is not a swap participant
may elect to clear a non-security-based swap that is subject
to a clearing requirement under subparagraph (C). If such
counterparty elects to clear, it shall have the sole right to
select the derivatives clearing organization or clearing
agency at which the non-security-based swap will be cleared.
``(I) Foreign exchange forwards, swaps, and options.--
Foreign exchange forwards, swaps, and options shall not be
subject to a clearing requirement under subparagraph (C)
unless the Department of the Treasury and the Board of
Governors determine that such a requirement is appropriate
after taking into consideration whether there exists an
effective settlement system for such foreign exchange
forwards, swaps, and options and any other factors that the
Department of the Treasury and the Board of Governors deem to
be relevant.''.

SEC. 724. SWAPS; SEGREGATION AND BANKRUPTCY TREATMENT.

(a) Segregation Requirements for Cleared Swaps.--Section 4d
of the Commodity Exchange Act (7 U.S.C. 6d) is amended by
adding at the end the following:
``(f) Swaps.--
``(1) Cleared swaps.--
``(A) Segregation required.--A futures commission merchant
or a swap participant shall treat and deal with all money,
securities, and property of any swap customer received to
margin, guarantee, or secure a swap cleared by or through a
derivatives clearing organization (including money,
securities, or property accruing to the swap customer as the
result of such a swap) as belonging to the swap customer.
``(B) Commingling prohibited.--Money, securities, and
property of a swap customer described in subparagraph (A)
shall be separately accounted for and shall not be commingled
with the funds of the futures commission merchant or the swap
participant or be used to margin, secure, or guarantee any
trades or contracts of any swap customer or person other than
the person for whom the same are held.
``(2) Exceptions.--
``(A) Use of funds.--
``(i) In general.--Notwithstanding paragraph (1), money,
securities, and property of a swap customer of a futures
commission merchant or a swap participant described in
paragraph (1) may, for convenience, be commingled and
deposited in the same 1 or more accounts with any bank or
trust company or with a derivatives clearing organization.
``(ii) Withdrawal.--Notwithstanding paragraph (1), such
share of the money, securities, and property described in
clause (i) as in the normal course of business shall be
necessary to margin, guarantee, secure, transfer, adjust, or
settle a cleared swap with a derivatives clearing
organization, or with any member of the derivatives clearing
organization, may be withdrawn and applied to such purposes,
including the payment of commissions, brokerage, interest,
taxes, storage, and other charges, lawfully accruing in
connection with the cleared swap.
``(B) Commission action.--Notwithstanding paragraph (1), in
accordance with such terms and conditions as the Commission
may prescribe by rule, regulation, or order, any money,
securities, or property of the swap customer of a futures
commission merchant or a swap participant described in
paragraph (1) may be commingled and deposited as provided in
this section with any other money, securities, or property
received by the futures commission merchant or swap
participant and required by the Commission to be separately
accounted for and treated and dealt with as belonging to the
swap customer of the futures commission merchant.
``(3) Permitted investments.--Money described in paragraph
(1) may be invested in obligations of the United States or in
any other investment that has minimal credit, market, and
liquidity risks that the Commission may by rule or regulation
prescribe, and such investments shall be made in accordance
with such rules and regulations and subject to such
conditions as the Commission may prescribe.
``(4) Commodity contract.--A non-security-based swap
cleared by or through a derivatives clearing organization
shall be considered to be a commodity contract as such term
is defined in section 761 of title 11, United States Code,
with regard to all money, securities, and property of any
swap customer received by a futures commission merchant, a
swap participant, or a derivatives clearing organization to
margin, guarantee, or secure the non-security-based swap
(including money, securities, or property accruing to the
customer as the result of the swap).
``(5) Prohibition.--It shall be unlawful for any person,
including any derivatives clearing organization and any
depository, that has received any money, securities, or
property for deposit in a separate account or accounts as
provided in paragraph (1) to hold, dispose of, or use any
such money, securities, or property as belonging to the
depositing futures commission merchant, a swap participant or
any person other than the swap customer of the futures
commission merchant or swap participant.''.
(b) Bankruptcy Treatment of Cleared Non-security-based
Swaps.--Section 761 of title 11, United States Code, is
amended--
(1) in paragraph (4), by striking subparagraph (F) and
inserting the following:
``(F)(i) any other contract, option, agreement, or
transaction that is similar to a contract, option, agreement,
or transaction referred to in this paragraph; and
``(ii) with respect to a futures commission merchant, a
swap participant, or a clearing organization, any other
contract, option, agreement, or transaction, in each case,
that is cleared by a clearing organization''; and
(2) in paragraph (9)(A)(i), by striking ``the commodity
futures account'' and inserting ``a commodity contract
account''.
(c) Segregation Requirements for Uncleared Non-security-
based Swaps.--Section 4s of the Commodity Exchange Act (as
added by section 729) is amended by adding at the end the
following:
``(l) Segregation Requirements for Initial Margin.--
``(1) Segregation of initial margin.--
``(A) Notification of right to segregate.--A swap
participant shall notify its counterparty before entering
into a non-security-based swap transaction of the
counterparty's right to require segregation of the funds or
other property supplied as initial margin for the purpose of
margining, guaranteeing, or securing the obligations of the
counterparty.
``(B) Segregation and maintenance of funds.--At the
request, made before entering into a non-security-based swap
transaction, of a counterparty that provides funds or other
property as initial margin to a swap participant for the
purpose of margining, guaranteeing, or securing the
obligations of the counterparty, the swap participant shall--
``(i) segregate the funds or other property for the benefit
of the counterparty; and
``(ii) in accordance with such rules and regulations as the
Commission may promulgate jointly with the Securities and
Exchange Commission, maintain the funds or other property in
a segregated account separate from the assets and other
interests of the swap participant.
``(C) Notification of excess variation margin.--Pursuant to
rules or regulations adopted by the Commission, a swap
participant who received funds or other property shall notify
any counterparty who provided such funds or other property if
the swap participant is holding excess net variation margin
from that counterparty.
``(2) Applicability.--The requirements described in
paragraph (1) shall--
``(A) apply only to a non-security-based swap between a
counterparty and a swap participant that is not submitted for
clearing to a derivatives clearing organization; and
``(B)(i) not apply to variation margin payments; and
``(ii) not preclude any commercial arrangement regarding--
``(I) the investment of segregated funds or other property
that may only be invested in

[[Page S3179]]

such investments as the Commission may permit by rule or
regulation; and
``(II) the related allocation of gains and losses resulting
from any investment of the segregated funds or other
property.
``(3) Use of independent third-party custodians.--The
segregated account described in paragraph (1), if requested
by the counterparty, may be--
``(A) carried by an independent third-party custodian; and
``(B) designated as a segregated account for and on behalf
of the counterparty.
``(4) Reporting requirement.--If the counterparty does not
choose to require segregation of the funds or other property
supplied as initial margin for the purpose of margining,
guaranteeing, or securing the obligations of the
counterparty, the swap participant shall report to the
counterparty of the swap participant on a quarterly basis
that the back office procedures of the swap participant
relating to initial margin and collateral requirements are in
compliance with the agreement of the counterparties.''.

SEC. 725. DERIVATIVES CLEARING ORGANIZATIONS.

(a) Registration Requirement.--Section 5b of the Commodity
Exchange Act (7 U.S.C. 7a-1) is amended by striking
subsections (a) and (b) and inserting the following:
``(a) Registration Requirement.--
``(1) In general.--Except as provided in paragraph (2), it
shall be unlawful for a derivatives clearing organization,
directly or indirectly, to make use of the mails or any means
or instrumentality of interstate commerce to perform the
functions of a derivatives clearing organization with respect
to--
``(A) a contract of sale of a commodity for future delivery
(or an option on the contract of sale) or option on a
commodity, in each case, unless the contract or option is--
``(i) excluded from this Act by subsection (a)(1)(C)(i),
(c), or (f) of section 2; or
``(ii) a security futures product cleared by a clearing
agency registered with the Securities and Exchange Commission
under the Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.); or
``(B) a non-security-based swap.
``(2) Exception.--Paragraph (1) shall not apply to a
derivatives clearing organization that is registered with the
Commission.
``(b) Voluntary Registration.--A person that clears 1 or
more agreements, contracts, or transactions that are not
required to be cleared under this Act may register with the
Commission as a derivatives clearing organization.''.
(b) Registration for Banks and Clearing Agencies;
Exemptions; Annual Reports.--Section 5b of the Commodity
Exchange Act (7 U.S.C. 7a-1) is amended by adding at the end
the following:
``(g) Required Registration for Banks and Clearing
Agencies.--A person that is required to be registered as a
derivatives clearing organization under this section shall
register with the Commission regardless of whether the person
is also licensed as a bank or a clearing agency registered
with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
``(h) Existing Banks and Clearing Agencies.--
``(1) In general.--A bank or clearing agency registered
with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) that
is required to be registered as a derivatives clearing
organization under this section is deemed to be registered
under this section to the extent that, before date of
enactment of this subsection--
``(A) the bank cleared swaps as a multilateral clearing
organization; or
``(B) the clearing agency cleared swaps.
``(2) Conversion of bank.--A bank to which this paragraph
applies may, by the vote of the shareholders owning not less
than 51 percent of the voting interests of the bank, be
converted into a State corporation, partnership, limited
liability company, or similar legal form pursuant to a plan
of conversion, if the conversion is not in contravention of
applicable State law.''.
(c) Core Principles for Derivatives Clearing
Organizations.--Section 5b(c) of the Commodity Exchange Act
(7 U.S.C. 7a-1(c)) is amended by striking paragraph (2) and
inserting the following:
``(2) Core principles for derivatives clearing
organizations.--
``(A) Compliance.--
``(i) In general.--To be registered and to maintain
registration as a derivatives clearing organization, a
derivatives clearing organization shall comply with each core
principle described in this paragraph and any requirement
that the Commission may impose by rule or regulation pursuant
to section 8a(5).
``(ii) Discretion of derivatives clearing organization.--
Subject to any rule or regulation prescribed by the
Commission, a derivatives clearing organization shall have
reasonable discretion in establishing the manner by which the
derivatives clearing organization complies with each core
principle described in this paragraph.
``(B) Financial resources.--
``(i) In general.--Each derivatives clearing organization
shall have adequate financial, operational, and managerial
resources, as determined by the Commission, to discharge each
responsibility of the derivatives clearing organization.
``(ii) Minimum amount of financial resources.--Each
derivatives clearing organization shall possess financial
resources that, at a minimum, exceed the total amount that
would--

``(I) enable the derivatives clearing organization to meet
each financial obligation of the derivatives clearing
organization to each member and participant of the
derivatives clearing organization; and
``(II) enable the derivatives clearing organization to
cover the operating costs of the derivatives clearing
organization for a period of 1 year (as calculated on a
rolling basis).

``(C) Participant and product eligibility.--
``(i) In general.--Each derivatives clearing organization
shall establish--

``(I) appropriate admission and continuing eligibility
standards (including sufficient financial resources and
operational capacity to meet obligations arising from
participation in the derivatives clearing organization) for
members of, and participants in, the derivatives clearing
organization; and
``(II) appropriate standards for determining the
eligibility of agreements, contracts, and transactions
submitted to the derivatives clearing organization for
clearing.

``(ii) Required procedures.--Each derivatives clearing
organization shall establish and implement procedures to
verify, on an ongoing basis, the compliance of each
participation and membership requirement of the derivatives
clearing organization.
``(iii) Requirements.--The participation and membership
requirements of each derivatives clearing organization
shall--

``(I) be objective;
``(II) be publicly disclosed; and
``(III) permit fair and open access.

``(iv) Offsetting economically equivalent positions.--The
rules of a registered derivatives clearing organization shall
prescribe that all swaps with the same terms and conditions
are economically equivalent and may be offset with each other
within the derivatives clearing organization.
``(D) Risk management.--
``(i) In general.--Each derivatives clearing organization
shall ensure that the derivatives clearing organization
possesses the ability to manage the risks associated with
discharging the responsibilities of the derivatives clearing
organization through the use of appropriate tools and
procedures.
``(ii) Measurement of credit exposure.--Each derivatives
clearing organization shall--

``(I) not less than once during each business day of the
derivatives clearing organization, measure the credit
exposures of the derivatives clearing organization to each
member and participant of the derivatives clearing
organization; and
``(II) monitor each exposure described in subclause (I)
periodically during the business day of the derivatives
clearing organization.

``(iii) Limitation of exposure to potential losses from
defaults.--Each derivatives clearing organization, through
margin requirements and other risk control mechanisms, shall
limit the exposure of the derivatives clearing organization
to potential losses from defaults by members and participants
of the derivatives clearing organization to ensure that--

``(I) the operations of the derivatives clearing
organization would not be disrupted; and
``(II) nondefaulting members or participants would not be
exposed to losses that nondefaulting members or participants
cannot anticipate or control.

``(iv) Margin requirements.--The margin required from each
member and participant of a derivatives clearing organization
shall be sufficient to cover potential exposures in normal
market conditions.
``(v) Requirements regarding models and parameters.--Each
model and parameter used in setting margin requirements under
clause (iv) shall be--

``(I) risk-based; and
``(II) reviewed on a regular basis.

``(E) Settlement procedures.--Each derivatives clearing
organization shall--
``(i) complete money settlements on a timely basis (but not
less frequently than once each business day);
``(ii) employ money settlement arrangements to eliminate or
strictly limit the exposure of the derivatives clearing
organization to settlement bank risks (including credit and
liquidity risks from the use of banks to effect money
settlements);
``(iii) ensure that money settlements are final when
effected;
``(iv) maintain an accurate record of the flow of funds
associated with each money settlement;
``(v) possess the ability to comply with each term and
condition of any permitted netting or offset arrangement with
any other clearing organization;
``(vi) regarding physical settlements, establish rules that
clearly state each obligation of the derivatives clearing
organization with respect to physical deliveries; and
``(vii) ensure that each risk arising from an obligation
described in clause (vi) is identified and managed.
``(F) Treatment of funds.--
``(i) Required standards and procedures.--Each derivatives
clearing organization shall establish standards and
procedures that are designed to protect and ensure the safety
of member and participant funds and assets.
``(ii) Holding of funds and assets.--Each derivatives
clearing organization shall hold member and participant funds
and assets in a manner by which to minimize the risk of

[[Page S3180]]

loss or of delay in the access by the derivatives clearing
organization to the assets and funds.
``(iii) Permissible investments.--Funds and assets invested
by a derivatives clearing organization shall be held in
instruments with minimal credit, market, and liquidity risks.
``(G) Default rules and procedures.--
``(i) In general.--Each derivatives clearing organization
shall have rules and procedures designed to allow for the
efficient, fair, and safe management of events during which
members or participants--

``(I) become insolvent; or
``(II) otherwise default on the obligations of the members
or participants to the derivatives clearing organization.

``(ii) Default procedures.--Each derivatives clearing
organization shall--

``(I) clearly state the default procedures of the
derivatives clearing organization;
``(II) make publicly available the default rules of the
derivatives clearing organization; and
``(III) ensure that the derivatives clearing organization
may take timely action--

``(aa) to contain losses and liquidity pressures; and
``(bb) to continue meeting each obligation of the
derivatives clearing organization.
``(H) Rule enforcement.--Each derivatives clearing
organization shall--
``(i) maintain adequate arrangements and resources for--

``(I) the effective monitoring and enforcement of
compliance with the rules of the derivatives clearing
organization; and
``(II) the resolution of disputes;

``(ii) have the authority and ability to discipline, limit,
suspend, or terminate the activities of a member or
participant due to a violation by the member or participant
of any rule of the derivatives clearing organization; and
``(iii) report to the Commission regarding rule enforcement
activities and sanctions imposed against members and
participants as provided in clause (ii).
``(I) System safeguards.--Each derivatives clearing
organization shall--
``(i) establish and maintain a program of risk analysis and
oversight to identify and minimize sources of operational
risk through the development of appropriate controls and
procedures, and automated systems, that are reliable, secure,
and have adequate scalable capacity;
``(ii) establish and maintain emergency procedures, backup
facilities, and a plan for disaster recovery that allows
for--

``(I) the timely recovery and resumption of operations of
the derivatives clearing organization; and
``(II) the fulfillment of each obligation and
responsibility of the derivatives clearing organization; and

``(iii) periodically conduct tests to verify that the
backup resources of the derivatives clearing organization are
sufficient to ensure daily processing, clearing, and
settlement.
``(J) Reporting.--Each derivatives clearing organization
shall provide to the Commission all information that the
Commission determines to be necessary to conduct oversight of
the derivatives clearing organization.
``(K) Recordkeeping.--Each derivatives clearing
organization shall maintain records of all activities related
to the business of the derivatives clearing organization as a
derivatives clearing organization--
``(i) in a form and manner that is acceptable to the
Commission; and
``(ii) for a period of not less than 5 years.
``(L) Public information.--
``(i) In general.--Each derivatives clearing organization
shall provide to market participants sufficient information
to enable the market participants to identify and evaluate
accurately the risks and costs associated with using the
services of the derivatives clearing organization.
``(ii) Availability of information.--Each derivatives
clearing organization shall make information concerning the
rules and operating procedures governing the clearing and
settlement systems of the derivatives clearing organization
available to market participants.
``(iii) Public disclosure.--Each derivatives clearing
organization shall disclose publicly and to the Commission
information concerning--

``(I) the terms and conditions of each contract, agreement,
and other transaction cleared and settled by the derivatives
clearing organization;
``(II) each clearing and other fee that the derivatives
clearing organization charges the members and participants of
the derivatives clearing organization;
``(III) the margin-setting methodology, and the size and
composition, of the financial resource package of the
derivatives clearing organization;
``(IV) daily settlement prices, volume, and open interest
for each contract settled or cleared by the derivatives
clearing organization; and
``(V) any other matter relevant to participation in the
settlement and clearing activities of the derivatives
clearing organization.

``(M) Information-sharing.--Each derivatives clearing
organization shall--
``(i) enter into, and abide by the terms of, each
appropriate and applicable domestic and international
information-sharing agreement; and
``(ii) use relevant information obtained from each
agreement described in clause (i) in carrying out the risk
management program of the derivatives clearing organization.
``(N) Antitrust considerations.--Unless appropriate to
achieve the purposes of this Act, a derivatives clearing
organization may not--
``(i) adopt any rule or take any action that results in any
unreasonable restraint of trade; or
``(ii) impose any material anticompetitive burden.
``(O) Governance fitness standards.--
``(i) Governance arrangements.--Each derivatives clearing
organization shall establish governance arrangements that are
transparent--

``(I) to fulfill public interest requirements; and
``(II) to support the objectives of owners and
participants.

``(ii) Fitness standards.--Each derivatives clearing
organization shall establish and enforce appropriate fitness
standards for--

``(I) directors;
``(II) members of any disciplinary committee;
``(III) members of the derivatives clearing organization;
``(IV) any other individual or entity with direct access to
the settlement or clearing activities of the derivatives
clearing organization; and
``(V) any party affiliated with any individual or entity
described in this clause.

``(P) Conflicts of interest.--Each derivatives clearing
organization shall--
``(i) establish and enforce rules to minimize conflicts of
interest in the decision-making process of the derivatives
clearing organization; and
``(ii) establish a process for resolving conflicts of
interest described in clause (i).
``(Q) Composition of governing boards.--Each derivatives
clearing organization shall ensure that the composition of
the governing board or committee of the derivatives clearing
organization includes market participants.
``(R) Legal risk.--Each derivatives clearing organization
shall have a well-founded, transparent, and enforceable legal
framework for each aspect of the activities of the
derivatives clearing organization.''.
(d) Reporting Requirements.--Section 5b of the Commodity
Exchange Act (7 U.S.C. 7a-1) (as amended by subsection (b))
is amended by adding at the end the following:
``(j) Reporting Requirements.--
``(1) Duty of derivatives clearing organizations.--Each
derivatives clearing organization that clears non-security-
based swaps shall provide to the Commission all information
that is determined by the Commission to be necessary to
perform each responsibility of the Commission under this Act.
``(2) Data collection and maintenance requirements.--The
Commission shall adopt data collection and maintenance
requirements for non-security-based swaps cleared by
derivatives clearing organizations that are comparable to the
corresponding requirements for non-security-based swaps data
reported to non-security-based swap data repositories.
``(3) Information sharing.--The Commission shall require
derivatives clearing organizations to provide information
collected under paragraph (2) to any of the following
regulatory authorities that requires it--
``(A) the Board;
``(B) the Securities and Exchange Commission;
``(C) each appropriate prudential regulator;
``(D) the Financial Stability Oversight Council;
``(E) the Department of Justice; and
``(F) any other person that the Commission determines to be
appropriate, including--
``(i) foreign financial supervisors (including foreign
futures authorities);
``(ii) foreign central banks; and
``(iii) foreign ministries.
``(4) Public information.--Each derivatives clearing
organization that clears non-security-based swaps shall
provide to the Commission (including any designee of the
Commission) information under paragraph (2) in such form and
at such frequency as is required by the Commission to comply
with the public reporting requirements contained in section
2(a)(13).''.
(e) Public Disclosure.--Section 8(e) of the Commodity
Exchange Act (7 U.S.C. 12(e)) is amended in the last
sentence--
(1) by inserting ``, central bank and ministries,'' after
``department'' each place it appears; and
(2) by striking ``. is a party.'' and inserting ``, is a
party.''.
(f) Legal Certainty for Identified Banking Products.--
(1) Repeals.--The Legal Certainty for Bank Products Act of
2000 (7 U.S.C. 27 et seq.) is amended--
(A) by striking sections 404 and 407 (7 U.S.C. 27b, 27e);
(B) in section 402 (7 U.S.C. 27), by striking subsection
(d); and
(C) in section 408 (7 U.S.C. 27f)--
(i) in subsection (c)--

(I) by striking ``in the case'' and all that follows
through ``a hybrid'' and inserting ``in the case of a
hybrid'';
(II) by striking ``; or'' and inserting a period; and
(III) by striking paragraph (2);

(ii) by striking subsection (b); and
(iii) by redesignating subsection (c) as subsection (b).

[[Page S3181]]

(2) Legal certainty for bank products act of 2000.--Section
403 of the Legal Certainty for Bank Products Act of 2000 (7
U.S.C. 27a) is amended to read as follows:

SEC. 726. TRANSPARENCY OF SWAP TRANSACTION DATA.

(a) Purposes.--The Commodity Futures Trading Commission is
directed, consistent with the purposes of this title, to use
its authority under this title to facilitate the prompt and
accurate collection, calculation, processing or preparation,
and public dissemination of information on transactions and
positions in non-security-based swaps.
(b) Transparency of Non-Security-Based Swap Transaction
Data.--The Commodity Exchange Act is amended by inserting
after section 4q (7 U.S.C. 6o-1) the following:

``SEC. 4R. REPORTING AND RECORDKEEPING FOR NON-SECURITY-BASED
SWAPS.

``(a) Mandatory Reporting of Non-security-based Swap
Transactions.--
``(1) In general.--Any person that enters into or effects a
transaction in a non-security-based swap shall report such
transaction through a derivatives clearing organization or a
non-security-based swap data repository registered with the
Commission pursuant to section 21 within the period specified
by any rule or regulation adopted by the Commission under
this paragraph. If no registered non-security-based swap data
repository accepts the non-security-based swap, the person
shall report the transaction to the Commission pursuant to
the requirements that the Commission may by rule or
regulation prescribe. Each transaction report shall disclose
whether the transaction is a bona fide hedging swap
transaction as defined in section 1a(33B) and any other
information that the Commission has, by rule or regulation,
prescribed as necessary or appropriate in furtherance of the
purposes of this section.
``(2) Permissible reporting for a counterparty that is not
a swap participant.--A swap participant may report a
transaction on behalf of its counterparty to that transaction
provided that counterparty is not a swap participant.
``(3) Rulemaking required.--Not later than 180 days after
the date of enactment of this section, the Commission shall
by rule or regulation establish a schedule for the reporting
through a derivatives clearing organization or registered
non-security-based swap data repository or to the Commission
of each non-security-based swap, group, category, type, or
class of non-security-based swap entered into--
``(A) before the effective date of the Commission's rule or
regulation and still outstanding as of such effective date;
and
``(B) on or after the effective date of the Commission's
rule or regulation.
``(b) Confidentiality of Information Provided.--No non-
public information provided to or obtained by the Commission
under this section may be disclosed to any other person.
Nothing in this subsection shall authorize the Commission to
withhold information from Congress, or prevent the Commission
from complying with a request for information from any other
Federal department or agency or foreign government with which
the Commission has an information sharing arrangement that
requests the information for purposes within the scope of its
jurisdiction, or complying with an order of a court of the
United States in an action brought by the United States or
the Commission.
``(c) Public Dissemination of Certain Information
Provided.--
``(1) In general.--Notwithstanding subsection (b), the
Commission is directed to use its authority under this Act to
facilitate the public dissemination of prices and volumes of
completed non-security-based swap transactions to provide
investors and other market participants with information
about recently executed transactions for the purposes of
helping them to mark existing swap positions to market, make
informed decisions before executing future transactions, and
assess the quality of transactions they have executed. For
each non-security-based swap, group, category, type, or class
of non-security-based swap, the Commission shall determine by
rule the extent to which individual or aggregated transaction
data must be disseminated and the timeliness of such
disseminations.
``(2) Reliance on economic analysis.--In making
determinations under this subsection, the Commission shall
rely on economic analyses provided by the Chief Economist of
the Commission and independent researchers that empirically
evaluate the effects of increasing price transparency on
measures of efficiency, competition, and market quality,
including transaction costs and liquidity. To facilitate such
empirical analyses, the Commission may design pilot programs
that increase price transparency on selected non-security-
based swaps.
``(3) Chief economist report.--Whenever the Commission
publishes a release giving notice of a proposed rulemaking
under this subsection, and affords interested persons an
opportunity to comment on such proposed rulemaking or
publishes a release adopting a final rule, such release shall
include as a part thereof a report by the Chief Economist of
the Commission. Each report shall describe the economic
analysis of the expected consequences of the proposed or
final Commission action, refer to any peer-reviewed or other
literature, including any empirical study undertaken by the
staff of the Commission, that is relevant to the analysis
contained in the report, and describe the extent to which the
conclusions of the report remain subject to uncertainty.
``(4) Protection of proprietary information.--In making
determinations under this subsection, the Commission shall
consider whether public dissemination of individual or
aggregate transaction data could result in the dissemination
of proprietary information about the swap transactions,
positions, trading strategies, or the ability of particular
market participants to conduct effective hedging or risk
management. The rules that the Commission adopts under this
subsection shall include protections to ensure that the
public dissemination of swap transaction data does not result
in the disclosure of such proprietary information.''.
``(5) Registered entities and public reporting.--The
Commission may require derivatives clearing organizations and
registered non-security-based swap data repositories to
publicly disseminate the non-security-based swap transaction
and pricing data required to be reported under this
paragraph.
``(6) Quarterly public reporting of aggregate non-security-
based swap data.--
``(A) In general.--In accordance with subparagraph (B), the
Commission shall issue a written report on a quarterly basis
to make available to the public information relating to--
``(i) the trading and clearing in the major non-security-
based swap categories; and
``(ii) the market participants and developments in new
products.
``(B) Use; consultation.--In preparing a report under
subparagraph (A), the Commission shall--
``(i) use any information reported directly to the
Commission and information from registered non-security-based
swap data repositories and derivatives clearing
organizations; and
``(ii) consult with the Office of the Comptroller of the
Currency, the Bank for International Settlements, and such
other regulatory bodies as may be necessary.''.

SEC. 727. SWAP DATA REPOSITORIES.

The Commodity Exchange Act is amended by inserting after
section 20 (7 U.S.C. 24) the following:

``SEC. 21. NON-SECURITY-BASED SWAP DATA REPOSITORIES.

``(a) Registration.--
``(1) In general.--A non-security-based swap data
repository may register by filing with the Commission an
application in such form as the Commission, by rule or
regulation, shall prescribe containing such information as
the Commission, by rule or regulation, may prescribe as
necessary or appropriate in furtherance of the purposes of
this section.
``(2) Inspection and examination.--Each registered non-
security-based swap data repository shall be subject to
inspection and examination by any representative of the
Commission.
``(3) Information sharing.--The Commission shall require
each registered non-security-based swap data repository to
provide information with respect to its functions as a non-
security-based swap data repository to any of the following
regulatory authorities that requests it--
``(A) the Board;
``(B) the Securities and Exchange Commission;
``(C) each appropriate prudential regulator;
``(D) the Financial Stability Oversight Council;
``(E) the Department of Justice; and
``(F) any other person that the Commission determines to be
appropriate, including--
``(i) foreign financial supervisors (including foreign
futures authorities);
``(ii) foreign central banks; and
``(iii) foreign ministries.
``(b) Standard Setting.--
``(1) Data identification.--The Commission shall prescribe
standards that specify the data elements for each non-
security-based swap, including whether the transaction is a
bona fide hedging swap transaction as defined in section 1a,
that shall be collected and maintained by each registered
non-security-based swap data repository.
``(2) Data collection and maintenance.--The Commission
shall prescribe data collection and data maintenance
standards for non-security-based swap data repositories.
``(3) Comparability.--The standards prescribed by the
Commission under this subsection shall be comparable to the
data standards imposed by the Commission on derivatives
clearing organizations in connection with their clearing of
non-security-based swaps.
``(c) Duties.--A registered non-security-based swap data
repository shall--
``(1) accept data prescribed by the Commission for one or
more non-security-based swaps;
``(2) confirm with both counterparties to the non-security-
based swap the accuracy of the data that was submitted;
``(3) maintain the data described in paragraph (1) in such
form, in such manner, and for such period as may be required
by the Commission;
``(4)(A) provide direct electronic access to the Commission
(or any designee of the Commission, including another
registered entity); and
``(B) provide the information described in paragraph (1) in
such form and at such frequency as the Commission may require
to comply with the public reporting requirements contained in
section 726 of the Over-the-Counter Swaps Markets
Transparency and Accountability Act of 2010;
``(5) at the direction of the Commission, establish
automated systems for monitoring,

[[Page S3182]]

screening, and analyzing non-security-based swap data;
``(6) maintain the confidentiality non-security-based swap
transaction information that the registered non-security-
based swap data repository receives from a counterparty, swap
participant, or any other registered entity in accordance
with the requirements that the Commission shall jointly with
the Securities and Exchange Commission prescribe through
notice-and-comment rulemaking.
``(d) Core Principles Applicable to Registered Non-
security-based Swap Data Repositories.--
``(1) Antitrust considerations.--Unless specifically
reviewed and approved by the Commission for antitrust
purposes, a registered non-security-based swap data
repository may not--
``(A) adopt any rule or take any action that results in any
unreasonable restraint of trade; or
``(B) impose any material anticompetitive burden on the
trading, clearing, or reporting of transactions.
``(2) Governance arrangements.--Each registered non-
security-based swap data repository shall establish
governance arrangements that are transparent and assure fair
representation of its participants in reasonable proportion
to their use of the non-security-based data repository in the
selection of its directors and administration of its affairs.
``(3) Conflicts of interest.--Each registered non-security-
based swap data repository shall--
``(A) establish and enforce rules to minimize conflicts of
interest in the decision-making process of the non-security-
based swap data repository; and
``(B) establish a process for resolving conflicts of
interest described in subparagraph (A).
``(4) Nondiscriminatory access.--A registered non-security-
based swap data repository--
``(A) may not mandate directly or indirectly the
substantive terms and conditions of transactions reported to
the non-security-based data repository;
``(B) must provide for the equitable allocation of
reasonable dues, fees, and other charges among its
participants and must not impose any schedule of prices, or
fix rates or other fees, for services rendered by its
participants;
``(C) provide for participation in the non-security-based
swap data repository by any swap participant and any other
person or class of persons as the Commission, by rule or
regulation, may determine to be necessary or appropriate in
furtherance of the purposes of this section; and
``(D) may not unfairly discriminate in the admission of
participants or among participants in the use of the non-
security-based swap data repository.
``(e) Rules.--The Commission shall adopt rules, jointly
with the Securities and Exchange Commission, governing
persons that are registered under this section.''.

SEC. 728. LARGE NON-SECURITY-BASED SWAP TRADER REPORTING.

The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended
by adding after section 4s (as added by section 729) the
following:

``SEC. 4T. LARGE NON-SECURITY-BASED SWAP TRADER REPORTING.

``(a) Prohibition.--
``(1) In general.--Except as provided in paragraph (2), it
shall be unlawful for any person to enter into any non-
security-based swap that the Commission determines to perform
a significant price discovery function with respect to
registered entities if--
``(A) the person directly or indirectly enters into the
non-security-based swap during any 1 day in an amount equal
to or in excess of such amount as shall be established
periodically by the Commission; and
``(B) the person directly or indirectly has or obtains a
position in the non-security-based swap equal to or in excess
of such amount as shall be established periodically by the
Commission.
``(2) Exception.--Paragraph (1) shall not apply if--
``(A) the person files or causes to be filed with the
properly designated officer of the Commission such reports
regarding any transactions or positions described in
subparagraphs (A) and (B) of paragraph (1) as the Commission
may require by rule or regulation; and
``(B) in accordance with the rules and regulations of the
Commission, the person keeps books and records of all such
non-security-based swaps and any transactions and positions
in any related commodity traded on or subject to the rules of
any board of trade, and of cash or spot transactions in,
inventories of, and purchase and sale commitments of, such a
commodity.
``(b) Requirements.--Books and records described in
subsection (a)(2)(B) shall--
``(1) show such complete details concerning all
transactions and positions as the Commission may prescribe by
rule or regulation; and
``(2) be open at all times to inspection and examination by
any representative of the Commission.
``(c) Applicability.--For purposes of this section, the
non-security-based swaps, futures, and cash or spot
transactions and positions of any person shall include the
non-security-based swaps, futures, and cash or spot
transactions and positions of any persons directly or
indirectly controlled by the person.
``(d) Significant Price Discovery Function.--In making a
determination as to whether a non-security-based swap
performs or affects a significant price discovery function
with respect to registered entities, the Commission shall
consider the factors described in section 4a(a)(3).''.

SEC. 729. REGISTRATION AND REGULATION OF SWAP PARTICIPANTS.

The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended
by inserting after section 4r (as added by section 726) the
following:

``SEC. 4S. REGISTRATION AND REGULATION OF SWAP PARTICIPANTS.

``(a) Registration.--Swap participants must register with
the Commission.
``(b) Notice Registration.--A swap participants shall be
exempt from registration with the Commission, if it files a
notice registration with the Commission in the form and
manner that the Commission shall prescribe, jointly with the
Securities and Exchange Commission, by notice-and-comment
rulemaking and--
``(1) it is exempt pursuant to a rule or order, issued by
the Commission, jointly with the Securities and Exchange
Commission, to exempt swap participants that engage primarily
in security-based swap transactions and are registered as
swap participants with the Securities and Exchange
Commission; or
``(2) all of its outstanding swap transactions are cleared
swaps.
``(c) Requirements.--
``(1) In general.--A person shall register as a swap
participant by filing a registration application with the
Commission.
``(2) Contents.--
``(A) In general.--The application shall be made in such
form and manner and containing such information as the
Commission, jointly with the Securities and Exchange
Commission through notice-and-comment rulemaking, shall
prescribe concerning the swap participant's swap activities.
``(B) Continual reporting.--A person that is registered as
a swap participant shall continue to submit to the Commission
reports that contain such information pertaining to the swap
participant's swap activities as the Commission may require.
``(3) Transition.--Rules under this section shall provide
for the registration of swap participants 1 year after the
date of enactment of the Over-the-Counter Swaps Markets
Transparency and Accountability Act of 2010.
``(4) Statutory disqualification.--Except to the extent
otherwise specifically provided by rule, regulation, or
order, it shall be unlawful for a swap participant to permit
any person associated with a swap participant who is subject
to a statutory disqualification to effect or be involved in
effecting swaps on behalf of the swap participant, if the
swap participant knew, or in the exercise of reasonable care
should have known, of the statutory disqualification.
``(d) Capital and Margin Requirements.--
``(1) Capital requirements for prudentially regulated swap
participants.--Each swap participant for which there is a
prudential regulator shall meet such minimum capital
requirements as such prudential regulator shall prescribe
pursuant to the authority of the prudential regulator.
``(2) Margin requirements for swap participants for
uncleared non-security-based swaps.--
``(A) In general.--Except as provided in subparagraph (C),
the Commission shall prescribe by rule or regulation the
minimum margin requirements that apply to transactions
between swap participants in a particular uncleared non-
security-based swap or any group, category, type, or class of
uncleared non-security-based swap, as the Commission deems
appropriate for the risk of that particular uncleared non-
security-based swap or class, group, category, type of
uncleared non-security-based swap, for the purposes of--
``(i) reducing the risk of losses to counterparties; and
``(ii) preserving the financial integrity of markets
trading non-security-based swaps.
``(B) Considerations.--The Commission shall not issue rules
under this subsection unless the Commission determines that
such rules--
``(i) would not inappropriately encourage or discourage the
clearing of certain non-security-based swaps, resulting in an
undue increase in risk to the financial system;
``(ii) are supported by economic analysis provided by the
Chief Economist of the Commission; and
``(iii) would not impose any unnecessary burden on
competition.
``(C) Exceptions.--The Commission shall not impose minimum
margin requirements on--
``(i) positions in foreign exchange forwards, swaps, or
options; and
``(ii) non-security-based swap transactions in which one
counterparty directly or indirectly controls, is controlled
by, or is under common control with the other counterparty,
provided, however, that the Commission, jointly with the
Financial Stability Oversight Council, may determine, by
notice-and-comment rulemaking, that transactions between
certain parties under common control are subject to the
minimum margin requirements imposed by the Commission under
this subsection.
``(D) Outstanding swap positions.--The Commission and the
Securities and Exchange Commission may by joint notice-and-
comment rulemaking or order exempt any

[[Page S3183]]

swap, group, category, type, or class of swap entered into on
or before the date of enactment of this Act. In determining
whether an exemption is appropriate, the Commission and the
Securities and Exchange Commission shall take into account
the notional value, the tenor, and the risk to the financial
stability of the United States posed by the underlying swap,
group, category, type, or class of swap.
``(3) Special margin requirements for uncleared swap
transactions involving a swap participant with a substantial
net uncollateralized swap position.--
``(A) In general.--If a swap participant has a substantial
net uncollateralized swap position, any subsequent swap
transaction, regardless of whether the swap participant's
counterparty is a swap participant, shall be subject to--
``(i) any applicable clearing requirement under section
(h); and
``(ii) any applicable margin requirements that the
Commission has prescribed under paragraph (2).
``(B) Substantial net uncollateralized position.--
``(i) In general.--From time to time, the Financial
Stability Oversight Council shall define, by rule or
regulation, `substantial net uncollateralized swap position'
by identifying the level of a net uncollateralized position
in swaps that a swap participant can hold without posing a
threat to the financial system stability of the United
States.
``(ii) Reliance on economic analysis.--In making
determinations under this subsection, the Commission and the
Board of Governors shall rely on economic analysis provided
by economists of the Commission and economists of the Board
of Governors.
``(e) Reporting and Recordkeeping.--With respect to its
swap business, each swap participant registered with the
Commission--
``(1) shall make such reports as are required by the
Commission, jointly with the Securities and Exchange
Commission through notice-and-comment rulemaking;
``(2)(A) for which there is a prudential regulator, shall
keep books and records in such form and manner and for such
period as may be prescribed by the prudential regulator; and
``(B) for which there is no prudential regulator, shall
keep books and records in such form and manner and for such
period as is prescribed by the Commission, jointly with the
Securities and Exchange Commission through notice-and-comment
rulemaking, by rule or regulation; and
``(3) shall keep books and records described in
subparagraph (B) open to inspection and examination by any
representative of the Commission.
``(f) Business Conduct Standards and Requirements.--With
respect to its swap business, each swap participant--
``(1) for which there is a prudential regulator, shall
comply with such business conduct standards and requirements
as the prudential regulator may impose; and
``(2) for which there is no prudential regulator, shall
comply with such business conduct standards and requirements
as the Commission, jointly with the Securities and Exchange
Commission through notice-and-comment rulemaking, shall
prescribe. Such business conduct requirements shall--
``(A) establish the standard of care required for a swap
participant to verify that any counterparty meets the
eligibility standards for an eligible contract participant;
and
``(B) require disclosure by the swap participant to any
counterparty to the swap (other than a counterparty that is a
swap participant) of--
``(i) information about the material risks and
characteristics of the swap; and
``(ii) any material conflicts of interest that the swap
participant may have in connection with the swap.
``(g) Documentation and Back Office Standards.--Each swap
participant registered with the Commission--
``(1) for which there is a prudential regulator, shall
comply with such documentation and back office standards as
the prudential regulator may impose; and
``(2) for which there is no prudential regulator, shall
conform with such standards as the Commission, jointly with
the Securities and Exchange Commission through notice-and-
comment rulemaking, may prescribe that relate to timely and
accurate confirmation, processing, netting, documentation,
and valuation of all swaps.
``(h) Confidentiality.--Notwithstanding any other provision
of law, the Commission may not be compelled to disclose any
information required by Commission rule or regulation to be
reported to the Commission under this subsection, except that
nothing in this paragraph authorizes the Commission to
withhold information from Congress, or prevent the Commission
from complying with a request for information from any other
Federal department or agency requesting information for
purposes within the scope of its jurisdiction, or complying
with an order of a court of the United States in an action
brought by the United States or the Commission. For purposes
of section 552 of title 5, United States Code, this
subsection shall be considered a statute described in
subsection (b)(3)(B) of such section 552.''.

SEC. 730. NON-SECURITY-BASED SWAP EXECUTION FACILITIES.

The Commodity Exchange Act is amended by inserting after
section 5g (7 U.S.C. 7b-2) the following:

``SEC. 5H. NON-SECURITY-BASED SWAP EXECUTION FACILITIES.

``(a) Registration.--
``(1) In general.--No person may operate a facility for the
trading or processing of non-security-based swaps unless the
facility is registered as a non-security-based swap execution
facility or as a designated contract market under this
section.
``(2) Dual registration.--Any person that is required to
register as a non-security-based swap execution facility
under this section shall register with the Commission
regardless of whether the person also is registered with the
Securities and Exchange Commission.
``(b) Trading and Trade Processing.--A non-security-based
swap execution facility that is registered under subsection
(a) may--
``(1) make available for trading any non-security-based
swap; and
``(2) facilitate trade processing of any non-security-based
swap.
``(c) Trading by Contract Markets.--A board of trade that
operates a contract market shall, to the extent that the
board of trade also operates a non-security-based swap
execution facility and uses the same electronic trade
execution system for trading on the contract market and the
non-security-based swap execution facility, identify whether
the electronic trading is taking place on the contract market
or the non-security-based swap execution facility.
``(d) Core Principles for Non-security-based Swap Execution
Facilities.--
``(1) Compliance with core principles.--
``(A) In general.--To be registered, and maintain
registration, as a non-security-based swap execution
facility, the non-security-based swap execution facility
shall comply with--
``(i) the core principles described in this subsection; and
``(ii) any requirement that the Commission may impose by
rule or regulation pursuant to section 8a(5).
``(B) Reasonable discretion of non-security-based swap
execution facility.--Unless otherwise determined by the
Commission by rule or regulation, a non-security-based swap
execution facility described in subparagraph (A) shall have
reasonable discretion in establishing the manner in which the
non-security-based swap execution facility complies with the
core principles described in this subsection.
``(2) Compliance with rules.--A non-security-based swap
execution facility shall--
``(A) monitor and enforce compliance with any rule of the
non-security-based swap execution facility, including--
``(i) the terms and conditions of the non-security-based
swaps traded or processed on or through the non-security-
based swap execution facility; and
``(ii) any limitation on access to the non-security-based
swap execution facility; and
``(B) establish and enforce trading, trade processing, and
participation rules that will deter abuses and have the
capacity to detect, investigate, and enforce those rules,
including means--
``(i) to provide market participants with impartial access
to the market; and
``(ii) to capture information that may be used in
establishing whether rule violations have occurred.
``(3) Swaps not readily susceptible to manipulation.--The
non-security-based swap execution facility shall permit
trading only in non-security-based swaps that are not readily
susceptible to manipulation.
``(4) Monitoring of trading and trade processing.--The non-
security-based swap execution facility shall--
``(A) establish and enforce rules or terms and conditions
defining, or specifications detailing--
``(i) trading procedures to be used in entering and
executing orders traded on or through the facilities of the
non-security-based swap execution facility; and
``(ii) procedures for trade processing of non-security-
based swaps on or through the facilities of the non-security-
based swap execution facility; and
``(B) monitor trading in non-security-based swaps to
prevent manipulation, price distortion, and disruptions of
the delivery or cash settlement process through surveillance,
compliance, and disciplinary practices and procedures,
including methods for conducting real-time monitoring of
trading and comprehensive and accurate trade reconstructions.
``(5) Information sharing.--The non-security-based swap
execution facility shall--
``(A) establish and enforce rules that will allow the
facility to obtain any necessary information to perform any
of the functions described in this section;
``(B) provide the information to the following on request--
``(i) the Commission;
``(ii) the Securities and Exchange Commission;
``(iii) the Board;
``(iv) each appropriate prudential regulator;
``(v) the Council;
``(vi) the Department of Justice; and
``(vii) any other foreign regulatory authority that the
Commission determines to be appropriate and with whom the
Commission has entered into an information sharing agreement;
and
``(C) have the capacity to carry out such international
information-sharing agreements as the Commission may require.
``(6) Position limits or accountability.--

[[Page S3184]]

``(A) In general.--To reduce the potential threat of market
manipulation or congestion, especially during trading in the
delivery month, the non-security-based swap execution
facility shall adopt for each of the contracts of the
facility, as is necessary and appropriate, position
limitations or position accountability for speculators.
``(B) Position limits.--For any contract that is subject to
a position limitation established by the Commission pursuant
to section 4a(a), the non-security-based swap execution
facility shall set its position limitation at a level no
higher than the Commission limitation.
``(C) Position enforcement.--For any contract that is
subject to a position limitation established by the
Commission pursuant to section 4a(a), a non-security-based
swap execution facility shall reject any proposed non-
security-based swap transaction if, based on information
readily available to a non-security-based swap execution
facility, any proposed non-security-based swap transaction
would cause a non-security-based swap execution facility
customer that would be a party to such swap transaction to
exceed such position limitation.
``(7) Financial integrity of transactions.--The non-
security-based swap execution facility shall establish and
enforce rules and procedures for ensuring the financial
integrity of non-security-based swaps entered on or through
the facilities of the non-security-based swap execution
facility, including the clearance and settlement of the non-
security-based swaps pursuant to section 2(h)(1).
``(8) Emergency authority.--The non-security-based swap
execution facility shall adopt rules to provide for the
exercise of emergency authority, in consultation or
cooperation with the Commission, as is necessary and
appropriate, including the authority to liquidate or transfer
open positions in any non-security-based swap or to suspend
or curtail trading in a non-security-based swap.
``(9) Timely publication of trading information.--
``(A) In general.--The non-security-based swap execution
facility shall make public timely information on price,
trading volume, and other trading data on non-security-based
swaps to the extent prescribed by the Commission.
``(B) Capacity of non-security-based swap execution
facility.--The non-security-based swap execution facility
shall be required to have the capacity to electronically
capture trade information with respect to transactions
executed on the facility.
``(10) Recordkeeping and reporting.--
``(A) In general.--A non-security-based swap execution
facility shall--
``(i) maintain records of all activities relating to the
business of the facility, including a complete audit trail,
in a form and manner acceptable to the Commission for a
period of 5 years; and
``(ii) report to the Commission, in a form and manner
acceptable to the Commission, such information as the
Commission determines to be necessary or appropriate for the
Commission to perform the duties of the Commission under this
Act.
``(B) Requirements.--The Commission shall adopt data
collection and reporting requirements for non-security-based
swap execution facilities that are comparable to
corresponding requirements for derivatives clearing
organizations and non-security-based swap data repositories.
``(11) Antitrust considerations.--Unless necessary or
appropriate to achieve the purposes of this Act, the non-
security-based swap execution facility shall avoid--
``(A) adopting any rules or taking any actions that result
in any unreasonable restraint of trade; or
``(B) imposing any material anticompetitive burden on
trading or clearing.
``(12) Conflicts of interest.--The non-security-based swap
execution facility shall--
``(A) establish and enforce rules to minimize conflicts of
interest in its decision-making process; and
``(B) establish a process for resolving the conflicts of
interest.
``(13) Financial resources.--
``(A) In general.--The non-security-based swap execution
facility shall have adequate financial, operational, and
managerial resources to discharge each responsibility of the
non-security-based swap execution facility.
``(B) Determination of resource adequacy.--The financial
resources of a non-security-based swap execution facility
shall be considered to be adequate if the value of the
financial resources exceeds the total amount that would
enable the non-security-based swap execution facility to
cover the operating costs of the non-security-based swap
execution facility for a 1-year period, as calculated on a
rolling basis.
``(14) System safeguards.--The non-security-based swap
execution facility shall--
``(A) establish and maintain a program of risk analysis and
oversight to identify and minimize sources of operational
risk, through the development of appropriate controls and
procedures, and automated systems, that--
``(i) are reliable and secure; and
``(ii) have adequate scalable capacity;
``(B) establish and maintain emergency procedures, backup
facilities, and a plan for disaster recovery that are
designed to allow for--
``(i) the timely recovery and resumption of operations; and
``(ii) the fulfillment of the responsibilities and
obligation of the non-security-based swap execution facility;
and
``(C) periodically conduct tests to verify that the backup
resources of the non-security-based swap execution facility
are sufficient to ensure continued--
``(i) order processing and trade matching;
``(ii) price reporting;
``(iii) market surveillance and
``(iv) maintenance of a comprehensive and accurate audit
trail.
``(e) Exemptions.--The Commission may exempt, conditionally
or unconditionally, a non-security-based swap execution
facility from registration under this section if the
Commission finds that the facility is subject to comparable,
comprehensive supervision and regulation on a consolidated
basis by the Securities and Exchange Commission, a prudential
regulator, or the appropriate governmental authorities in the
home country of the facility.
``(f) Rules.--The Commission shall prescribe rules
governing the regulation of alternative non-security-based
swap execution facilities under this section.''.

SEC. 731. DERIVATIVES TRANSACTION EXECUTION FACILITIES AND
EXEMPT BOARDS OF TRADE.

(a) In General.--Sections 5a and 5d of the Commodity
Exchange Act (7 U.S.C. 7a, 7a-3) are repealed.
(b) Conforming Amendments.--
(1) Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is
amended--
(A) in subsection (a)(1)(A), in the first sentence, by
striking ``or 5a''; and
(B) in paragraph (2) of subsection (g) (as redesignated by
section 723(a)(1)(B)), by striking ``section 5a of this Act''
and all that follows through ``5d of this Act'' and inserting
``section 5b of this Act''.
(2) Section 6(g)(1)(A) of the Securities Exchange Act of
1934 (15 U.S.C. 78f(g)(1)(A)) is amended--
(A) by striking ``that--'' and all that follows through
``(i) has been designated'' and inserting ``that has been
designated'';
(B) by striking ``; or'' and inserting ``; and'' and
(C) by striking clause (ii).

SEC. 732. DESIGNATED CONTRACT MARKETS.

(a) Criteria for Designation.--Section 5 of the Commodity
Exchange Act (7 U.S.C. 7) is amended by striking subsection
(b).
(b) Core Principles for Contract Markets.--Section 5 of the
Commodity Exchange Act (7 U.S.C. 7) is amended by striking
subsection (d) and inserting the following:
``(d) Core Principles for Contract Markets.--
``(1) Designation as board of trade.--
``(A) In general.--To be designated, and maintain a
designation, as a contract market, a board of trade shall
comply with--
``(i) any core principle described in this subsection; and
``(ii) any requirement that the Commission may impose by
rule or regulation pursuant to section 8a(5).
``(B) Reasonable discretion of board of trade.--Unless
otherwise determined by the Commission by rule or regulation,
a board of trade described in subparagraph (A) shall have
reasonable discretion in establishing the manner in which the
board of trade complies with the core principles described in
this subsection.
``(2) Compliance with rules.--
``(A) In general.--The board of trade shall establish,
monitor, and enforce compliance with the rules of the
contract market, including--
``(i) access requirements;
``(ii) the terms and conditions of any contracts to be
traded on the contract market; and
``(iii) rules prohibiting abusive trade practices on the
contract market.
``(B) Capacity of board of trade.--The board of trade shall
have the capacity to detect, investigate, and apply
appropriate sanctions to any person that violates any rule of
the contract market.
``(C) Requirement of rules.--The rules of the contract
market shall provide the board of trade with the ability and
authority to obtain any necessary information to perform any
function described in this subsection, including the capacity
to carry out such international information-sharing
agreements as the Commission may require.
``(3) Contracts not readily subject to manipulation.--The
board of trade shall list on the contract market only
contracts that are not readily susceptible to manipulation.
``(4) Prevention of market disruption.--The board of trade
shall have the capacity and responsibility to prevent
manipulation, price distortion, and disruptions of the
delivery or cash-settlement process through market
surveillance, compliance, and enforcement practices and
procedures, including--
``(A) methods for conducting real-time monitoring of
trading; and
``(B) comprehensive and accurate trade reconstructions.
``(5) Position limitations or accountability.--
``(A) In general.--To reduce the potential threat of market
manipulation or congestion (especially during trading in the
delivery month), the board of trade shall adopt for each
contract of the board of trade, as is necessary and
appropriate, position limitations or position accountability
for speculators.
``(B) Maximum allowable position limitation.--For any
contract that is subject to a position limitation established
by the Commission pursuant to section 4a(a), the board

[[Page S3185]]

of trade shall set the position limitation of the board of
trade at a level not higher than the position limitation
established by the Commission.
``(6) Emergency authority.--The board of trade, in
consultation or cooperation with the Commission, shall adopt
rules to provide for the exercise of emergency authority, as
is necessary and appropriate, including the authority--
``(A) to liquidate or transfer open positions in any
contract;
``(B) to suspend or curtail trading in any contract; and
``(C) to require market participants in any contract to
meet special margin requirements.
``(7) Availability of general information.--The board of
trade shall make available to market authorities, market
participants, and the public accurate information
concerning--
``(A) the terms and conditions of the contracts of the
contract market; and
``(B)(i) the rules, regulations, and mechanisms for
executing transactions on or through the facilities of the
contract market; and
``(ii) the rules and specifications describing the
operation of the contract market's--
``(I) electronic matching platform; or
``(II) trade execution facility.
``(8) Daily publication of trading information.--The board
of trade shall make public daily information on settlement
prices, volume, open interest, and opening and closing ranges
for actively traded contracts on the contract market.
``(9) Execution of transactions.--
``(A) In general.--The board of trade shall provide a
competitive, open, and efficient market and mechanism for
executing transactions that protects the price discovery
process of trading in the centralized market of the board of
trade.
``(B) Rules.--The rules of the board of trade may
authorize, for bona fide business purposes--
``(i) transfer trades or office trades;
``(ii) an exchange of--

``(I) futures in connection with a cash commodity
transaction;
``(II) futures for cash commodities; or
``(III) futures for non-security-based swaps; or

``(iii) a futures commission merchant, acting as principal
or agent, to enter into or confirm the execution of a
contract for the purchase or sale of a commodity for future
delivery if the contract is reported, recorded, or cleared in
accordance with the rules of the contract market or a
derivatives clearing organization.
``(10) Trade information.--The board of trade shall
maintain rules and procedures to provide for the recording
and safe storage of all identifying trade information in a
manner that enables the contract market to use the
information--
``(A) to assist in the prevention of customer and market
abuses; and
``(B) to provide evidence of any violations of the rules of
the contract market.
``(11) Financial integrity of transactions.--The board of
trade shall establish and enforce--
``(A) rules and procedures for ensuring the financial
integrity of transactions entered into on or through the
facilities of the contract market (including the clearance
and settlement of the transactions with a derivatives
clearing organization); and
``(B) rules to ensure--
``(i) the financial integrity of any--

``(I) futures commission merchant; and
``(II) introducing broker; and

``(ii) the protection of customer funds.
``(12) Protection of markets and market participants.--The
board of trade shall establish and enforce rules--
``(A) to protect markets and market participants from
abusive practices committed by any party, including abusive
practices committed by a party acting as an agent for a
participant; and
``(B) to promote fair and equitable trading on the contract
market.
``(13) Disciplinary procedures.--The board of trade shall
establish and enforce disciplinary procedures that authorize
the board of trade to discipline, suspend, or expel members
or market participants that violate the rules of the board of
trade, or similar methods for performing the same functions,
including delegation of the functions to third parties.
``(14) Dispute resolution.--The board of trade shall
establish and enforce rules regarding, and provide facilities
for alternative dispute resolution as appropriate for, market
participants and any market intermediaries.
``(15) Governance fitness standards.--The board of trade
shall establish and enforce appropriate fitness standards for
directors, members of any disciplinary committee, members of
the contract market, and any other person with direct access
to the facility (including any party affiliated with any
person described in this paragraph).
``(16) Conflicts of interest.--The board of trade shall
establish and enforce rules--
``(A) to minimize conflicts of interest in the decision-
making process of the contract market; and
``(B) to establish a process for resolving conflicts of
interest described in subparagraph (A).
``(17) Composition of governing boards of contract
markets.--The governance arrangements of the board of trade
shall be designed to promote the objectives of market
participants.
``(18) Recordkeeping.--The board of trade shall maintain
records of all activities relating to the business of the
contract market--
``(A) in a form and manner that is acceptable to the
Commission; and
``(B) for a period of at least 5 years.
``(19) Antitrust considerations.--Unless appropriate to
achieve the purposes of this Act, the board of trade shall,
to the maximum extent practicable, avoid--
``(A) adopting any rule or taking any action that results
in any unreasonable restraint of trade; or
``(B) imposing any material anticompetitive burden on
trading on the contract market.
``(20) System safeguards.--The board of trade shall--
``(A) establish and maintain a program of risk analysis and
oversight to identify and minimize sources of operational
risk, through the development of appropriate controls and
procedures, and the development of automated systems, that
are reliable, secure, and have adequate scalable capacity;
``(B) establish and maintain emergency procedures, backup
facilities, and a plan for disaster recovery that allow for
the timely recovery and resumption of operations and the
fulfillment of the responsibilities and obligations of the
board of trade; and
``(C) periodically conduct tests to verify that backup
resources are sufficient to ensure continued order processing
and trade matching, price reporting, market surveillance, and
maintenance of a comprehensive and accurate audit trail.
``(21) Financial resources.--
``(A) In general.--The board of trade shall have adequate
financial, operational, and managerial resources to discharge
each responsibility of the board of trade.
``(B) Determination of adequacy.--The financial resources
of the board of trade shall be considered to be adequate if
the value of the financial resources exceeds the total amount
that would enable the contract market to cover the operating
costs of the contract market for a 1-year period, as
calculated on a rolling basis.''.

SEC. 733. MARGIN.

Section 8a(7) of the Commodity Exchange Act (7 U.S.C.
12a(7)) is amended--
(1) in subparagraph (C), by striking ``, excepting the
setting of levels of margin'';
(2) by redesignating subparagraphs (D) through (F) as
subparagraphs (E) through (G), respectively; and
(3) by inserting after subparagraph (C) the following:
``(D) margin requirements, provided that the rules,
regulations, or orders shall--
``(i) be limited to protecting the financial integrity of
the derivatives clearing organization;
``(ii) be designed for risk management purposes to protect
the financial integrity of transactions; and
``(iii) not set specific margin amounts;''.

SEC. 734. POSITION LIMITS ON NON-SECURITY-BASED SWAPS.

(a) Aggregate Position Limits.--Section 4a(a) of the
Commodity Exchange Act (7 U.S.C. 6a(a)) is amended--
(1) by inserting after ``(a)'' the following: ``(1) in
general.--'';
(2) in the first sentence, by striking ``on electronic
trading facilities with respect to a significant price
discovery contract'' and inserting ``non-security-based swaps
that perform or affect a significant price discovery function
with respect to registered entities'';
(3) in the second sentence--
(A) by inserting ``, including any group or class of
traders,'' after ``held by any person''; and
(B) by striking ``on an electronic trading facility with
respect to a significant price discovery contract,'' and
inserting ``non-security-based swaps traded on or subject to
the rules of a non-security-based swaps execution facility,
or non-security-based swaps not traded on or subject to the
rules of a non-security-based swaps execution facility that
perform a significant price discovery function with respect
to a registered entity,''; and
(4) by adding at the end the following:
``(2) Aggregate position limits.--The Commission may, by
rule or regulation, establish limits (including related hedge
exemption provisions) on the aggregate number or amount of
positions in contracts based on the same underlying commodity
(as defined by the Commission) that may be held by any
person, including any group or class of traders, for each
month across--
``(A) contracts listed by designated contract markets;
``(B) with respect to an agreement, contract, or
transaction that settles against, or in relation to, any
price (including the daily or final settlement price) of 1 or
more contracts listed for trading on a registered entity,
contracts traded on a foreign board of trade that provides
members or other participants located in the United States
with direct access to the electronic trading and order
matching system of the foreign board of trade;
``(C) non-security-based swaps traded on or subject to the
rules of a non-security-based swap execution facility; and
``(D) non-security-based swaps not traded on or subject to
the rules of a non-security-based swap execution facility
that perform or affect a significant price discovery function
with respect to a registered entity.
``(3) Significant price discovery function.--In making a
determination as to

[[Page S3186]]

whether a non-security-based swap performs or affects a
significant price discovery function with respect to
registered entities, the Commission shall consider, as
appropriate, the following factors:
``(A) Price linkage.--The extent to which the non-security-
based swap uses or otherwise relies on a daily or final
settlement price, or other major price parameter, of another
contract traded on a registered entity based on the same
underlying commodity, to value a position, transfer or
convert a position, financially settle a position, or close
out a position.
``(B) Arbitrage.--The extent to which the price for the
non-security-based swap is sufficiently related to the price
of another contract traded on a registered entity based on
the same underlying commodity so as to permit market
participants to effectively arbitrage between the markets by
simultaneously maintaining positions or executing trades in
the non-security-based swaps on a frequent and recurring
basis.
``(C) Material price reference.--The extent to which, on a
frequent and recurring basis, bids, offers, or transactions
in a contract traded on a registered entity are directly
based on, or are determined by referencing, the price
generated by the swap.
``(D) Material liquidity.--The extent to which the volume
of non-security-based swaps being traded in the commodity is
sufficient to have a material effect on another contract
traded on a registered entity.
``(E) Other material factors.--Such other material factors
as the Commission specifies by rule or regulation as relevant
to determine whether a non-security-based swap serves a
significant price discovery function with respect to a
regulated market.
``(4) Exemptions.--The Commission, by rule, regulation, or
order, may exempt, conditionally or unconditionally, any
person or class of persons, any non-security-based swap or
class of non-security-based swaps, or any transaction or
class of transactions from any requirement that the
Commission establishes under this section with respect to
position limits.''.
(b) Conforming Amendments.--Section 4a(b) of the Commodity
Exchange Act (7 U.S.C. 6a(b)) is amended--
(1) in paragraph (1), by striking ``or derivatives
transaction execution facility or facilities or electronic
trading facility'' and inserting ``or non-security-based swap
execution facility or facilities''; and
(2) in paragraph (2), by striking ``or derivatives
transaction execution facility or facilities or electronic
trading facility'' and inserting ``or non-security-based swap
execution facility''.

SEC. 735. FOREIGN BOARDS OF TRADE.

(a) In General.--Section 4(b) of the Commodity Exchange Act
(7 U.S.C. 6(b)) is amended--
(1) in the first sentence, by striking ``The Commission''
and inserting the following:
``(2) Persons located in the united states.--
``(3) In general.--The Commission'';
(2) in the second sentence, by striking ``Such rules and
regulations'' and inserting the following:
``(B) Different requirements.--Rules and regulations
described in subparagraph (A)'';
(3) in the third sentence--
(A) by striking ``No rule or regulation'' and inserting the
following:
``(C) Prohibition.--Except as provided in paragraphs (1)
and (2), no rule or regulation'';
(B) by striking ``that (1) requires'' and inserting the
following: ``that--
``(i) requires''; and
(C) by striking ``market, or (2) governs'' and inserting
the following: ``market; or
``(ii) governs''; and
(4) by inserting before paragraph (2) (as designated by
paragraph (1)) the following:
``(1) Foreign boards of trade.--
``(A) In general.--It shall be unlawful for a foreign board
of trade to provide to the members of the foreign board of
trade or other participants located in the United States
direct access to the electronic trading and order-matching
system of the foreign board of trade with respect to an
agreement, contract, or transaction that settles against any
price (including the daily or final settlement price) of 1 or
more contracts listed for trading on a registered entity,
unless the Commission determines that--
``(i) the foreign board of trade makes public daily trading
information regarding the agreement, contract, or transaction
that is comparable to the daily trading information published
by the registered entity for the 1 or more contracts against
which the agreement, contract, or transaction traded on the
foreign board of trade settles; and
``(ii) the foreign board of trade (or the foreign futures
authority that oversees the foreign board of trade)--

``(I) adopts position limits (including related hedge
exemption provisions) for the agreement, contract, or
transaction that are comparable to the position limits
(including related hedge exemption provisions) adopted by the
registered entity for the 1 or more contracts against which
the agreement, contract, or transaction traded on the foreign
board of trade settles;
``(II) has the authority to require or direct market
participants to limit, reduce, or liquidate any position the
foreign board of trade (or the foreign futures authority that
oversees the foreign board of trade) determines to be
necessary to prevent or reduce the threat of price
manipulation, excessive speculation as described in section
4a, price distortion, or disruption of delivery or the cash
settlement process;
``(III) agrees to promptly notify the Commission, with
regard to the agreement, contract, or transaction that
settles against any price (including the daily or final
settlement price) of 1 or more contracts listed for trading
on a registered entity, of any change regarding--

``(aa) the information that the foreign board of trade will
make publicly available;
``(bb) the position limits that the foreign board of trade
or foreign futures authority will adopt and enforce;
``(cc) the position reductions required to prevent
manipulation, excessive speculation as described in section
4a, price distortion, or disruption of delivery or the cash
settlement process; and
``(dd) any other area of interest expressed by the
Commission to the foreign board of trade or foreign futures
authority;

``(IV) provides information to the Commission regarding
large trader positions in the agreement, contract, or
transaction that is comparable to the large trader position
information collected by the Commission for the 1 or more
contracts against which the agreement, contract, or
transaction traded on the foreign board of trade settles; and
``(V) provides the Commission such information as is
necessary to publish reports on aggregate trader positions
for the agreement, contract, or transaction traded on the
foreign board of trade that are comparable to such reports on
aggregate trader positions for the 1 or more contracts
against which the agreement, contract, or transaction traded
on the foreign board of trade settles.

``(B) Existing foreign boards of trade.--Subparagraph (A)
shall not be effective with respect to any foreign board of
trade to which, prior to the date of enactment of this
paragraph, the Commission granted direct access permission
until the date that is 180 days after that date of
enactment.''.
(b) Liability of Registered Persons Trading on a Foreign
Board of Trade.--Section 4 of the Commodity Exchange Act (7
U.S.C. 6) is amended--
(1) in subsection (a), in the matter preceding paragraph
(1), by inserting ``or by subsection (e)'' after ``Unless
exempted by the Commission pursuant to subsection (c)''; and
(2) by adding at the end the following:
``(e) Liability of Registered Persons Trading on a Foreign
Board of Trade.--A person registered with the Commission, or
exempt from registration by the Commission, under this Act
may not be found to have violated subsection (a) with respect
to a transaction in, or in connection with, a contract of
sale of a commodity for future delivery if the person has
reason to believe that the transaction and the contract is
made on or subject to the rules of a foreign board of trade
that has complied with paragraphs (1) and (2) of subsection
(b).''.
(c) Contract Enforcement for Foreign Futures Contracts.--
Section 22(a) of the Commodity Exchange Act (7 U.S.C. 25(a))
(as amended by section 736) is amended by adding at the end
the following:
``(6) Contract enforcement for foreign futures contracts.--
A contract of sale of a commodity for future delivery traded
or executed on or through the facilities of a board of trade,
exchange, or market located outside the United States for
purposes of section 4(a) shall not be void, voidable, or
unenforceable, and a party to such a contract shall not be
entitled to rescind or recover any payment made with respect
to the contract, based on the failure of the foreign board of
trade to comply with any provision of this Act.''.

SEC. 736. LEGAL CERTAINTY FOR NON-SECURITY-BASED SWAPS.

Section 22(a) of the Commodity Exchange Act (7 U.S.C.
25(a)) is amended by striking paragraph (4) and inserting the
following:
``(4) Contract enforcement between eligible
counterparties.--
``(A) In general.--No hybrid instrument sold to any
investor shall be void, voidable, or unenforceable, and no
party to a hybrid instrument shall be entitled to rescind, or
recover any payment made with respect to, the hybrid
instrument under this section or any other provision of
Federal or State law, based solely on the failure of the
hybrid instrument to comply with the terms or conditions of
section 2(f) or regulations of the Commission.
``(B) Non-security-based swaps.--No agreement, contract, or
transaction between eligible contract participants or persons
reasonably believed to be eligible contract participants
shall be void, voidable, or unenforceable, and no party to an
agreement, contract, or transaction shall be entitled to
rescind, or recover any payment made with respect to, the
agreement, contract, or transaction under this section or any
other provision of Federal or State law, based solely on the
failure of the agreement, contract, or transaction--
``(i) to meet the definition of a non-security-based swap
under section 1a; or
``(ii) to be cleared in accordance with section 2(h)(1).
``(5) Legal certainty.--
``(A) Effect on non-security-based swaps.--Unless
specifically reserved in the applicable bilateral trading
agreement, neither the enactment of the Over-the-Counter
Swaps Markets Transparency and Accountability Act of 2010,
nor any requirement under that Act or an amendment made by
that Act, shall constitute a termination event, force
majeure, illegality, increased

[[Page S3187]]

costs, regulatory change, or similar event under a bilateral
trading agreement (including any related credit support
arrangement) that would permit a party to terminate,
renegotiate, modify, amend, or supplement 1 or more
transactions under the bilateral trading agreement.
``(B) Position limits.--Any position limit established
under the Over-the-Counter Swaps Markets Transparency and
Accountability Act of 2010 shall not apply to a position
acquired in good faith prior to the effective date of any
rule, regulation, or order under the Act that establishes the
position limit; provided, however, that such positions shall
be attributed to the trader if the trader's position is
increased after the effective date of such position limit
rule, regulation, or order.''.

SEC. 737. MULTILATERAL CLEARING ORGANIZATIONS.

Sections 408 and 409 of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 4421, 4422)
are repealed.

SEC. 738. ENFORCEMENT.

(a) Conforming Amendments.--
(1) Section 4b of the Commodity Exchange Act (7 U.S.C. 6b)
is amended--
(A) in subsection (a)(2), by striking ``or other agreement,
contract, or transaction subject to paragraphs (1) and (2) of
section 5a(g),'' and inserting ``or non-security-based
swap,'';
(B) in subsection (b), by striking ``or other agreement,
contract or transaction subject to paragraphs (1) and (2) of
section 5a(g),'' and inserting ``or non-security-based
swap,''; and
(C) by adding at the end the following:
``(e) It shall be unlawful for any person, directly or
indirectly, by the use of any means or instrumentality of
interstate commerce, or of the mails, or of any facility of
any registered entity, in or in connection with any order to
make, or the making of, any contract of sale of any commodity
for future delivery (or option on such a contract), or any
non-security-based swap, on a group or index of securities
(or any interest therein or based on the value thereof) that
is a broad-based security index--
``(1) to employ any device, scheme, or artifice to defraud;
``(2) to make any untrue statement of a material fact or to
omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under
which they were made, not misleading; or
``(3) to engage in any act, practice, or course of business
which operates or would operate as a fraud or deceit upon any
person.''.
(2) Section 4c(a)(1) of the Commodity Exchange Act (7
U.S.C. 6c(a)(1)) is amended by inserting ``or non-security-
based swap'' before ``if the transaction is used or may be
used''.
(3) Section 6(c) of the Commodity Exchange Act (7 U.S.C. 9)
is amended in the first sentence by inserting ``or of any
non-security-based swap,'' before ``or has willfully made''.
(4) Section 6(d) of the Commodity Exchange Act (7 U.S.C.
13b) is amended in the first sentence, in the matter
preceding the proviso, by inserting ``or of any non-security-
based swap,'' before ``or otherwise is violating''.
(5) Section 6c(a) of the Commodity Exchange Act (7 U.S.C.
13a-1(a)) is amended in the matter preceding the proviso by
inserting ``or any non-security-based swap'' after
``commodity for future delivery''.
(6) Section 9 of the Commodity Exchange Act (7 U.S.C. 13)
is amended--
(A) in subsection (a)--
(i) in paragraph (2), by inserting ``or of any non-
security-based swap,'' before ``or to corner''; and
(ii) in paragraph (4), by inserting ``registered non-
security-based swap data repository,'' before ``or futures
association'' and
(B) in subsection (e)(1)--
(i) by inserting ``registered non-security-based swap data
repository,'' before ``or registered futures association'';
and
(ii) by inserting ``, or non-security-based swaps,'' before
``on the basis''.
(7) Section 9(a) of the Commodity Exchange Act (7 U.S.C.
13(a)) is amended by adding at the end the following:
``(6) Any person to abuse the end user clearing exemption
under section 2(h)(4), as determined by the Commission.''.
(8) Section 8(b) of the Federal Deposit Insurance Act (12
U.S.C. 1818(b)) is amended by adding at the end the
following:
``(11) Swaps.--
``(A) In general.--Subject to subparagraph (B), this
section shall apply to any swap participant, derivatives
clearing organization, registered non-security-based swap
data repository, security-based swap data repository, or non-
security-based swap execution facility regardless of whether
the participant, organization, repository, or facility is an
insured depository institution, for which the Board, the
Corporation, or the Office of the Comptroller of the Currency
is the appropriate Federal banking agency or prudential
regulator for purposes of the amendments made by the Over-
the-Counter Swaps Markets Transparency and Accountability Act
of 2010.
``(B) Limitation.--The authority described in subparagraph
(A) shall be limited by, and exercised in accordance with,
section 4b-1 of the Commodity Exchange Act.''.

SEC. 739. RETAIL COMMODITY TRANSACTIONS.

(a) In General.--Section 2(c) of the Commodity Exchange Act
(7 U.S.C. 2(c)) is amended--
(1) in paragraph (1), by striking ``(to the extent provided
in section 5a(g)), 5b, 5d, or 12(e)(2)(B))'' and inserting
``, 5b, or 12(e)(2)(B))''; and
(2) in paragraph (2), by adding at the end the following:
``(D) Retail commodity transactions.--
``(i) Applicability.--Except as provided in clause (ii),
this subparagraph shall apply to any agreement, contract, or
transaction in any commodity that is--

``(I) entered into with, or offered to (even if not entered
into with), a person that is not an eligible contract
participant or eligible commercial entity; and
``(II) entered into, or offered (even if not entered into),
on a leveraged or margined basis, or financed by the offeror,
the counterparty, or a person acting in concert with the
offeror or counterparty on a similar basis.

``(ii) Exceptions.--This subparagraph shall not apply to--

``(I) an agreement, contract, or transaction described in
paragraph (1) or subparagraphs (A), (B), or (C), including
any agreement, contract, or transaction specifically excluded
from subparagraph (A), (B), or (C);
``(II) any security;
``(III) a contract of sale that--

``(aa) results in actual delivery within 28 days or such
other longer period as the Commission may determine by rule
or regulation based upon the typical commercial practice in
cash or spot markets for the commodity involved; or
``(bb) creates an enforceable obligation to deliver between
a seller and a buyer that have the ability to deliver and
accept delivery, respectively, in connection with the line of
business of the seller and buyer; or

``(IV) an agreement, contract, or transaction that is
listed on a national securities exchange registered under
section 6(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78f(a)).

``(iii) Enforcement.--Sections 4(a), 4(b), and 4b apply to
any agreement, contract, or transaction described in clause
(i), as if the agreement, contract, or transaction was a
contract of sale of a commodity for future delivery.
``(iv) Eligible commercial entity.--For purposes of this
subparagraph, an agricultural producer, packer, or handler
shall be considered to be an eligible commercial entity for
any agreement, contract, or transaction for a commodity in
connection with the line of business of the agricultural
producer, packer, or handler.
``(v) Actual delivery.--For purposes of clause (ii)(III),
the term `actual delivery' does not include delivery to a
third party in a financed transaction in which the commodity
is held as collateral.''.
(b) Gramm-Leach-Bliley Act.--Section 206 of the Gramm-
Leach-Bliley Act (Public Law 106-102; 15 U.S.C. 78c note) is
amended--
(1) in subsection (a), in the matter preceding paragraph
(1), by striking ``For purposes of'' and inserting ``Except
as provided in subsection (e), for purposes of''; and
(2) by adding at the end the following:
``(e) Limitation of Definition of Identified Banking
Product.--Except as provided in section 403 of the Legal
Certainty for Bank Products Act of 2000 (7 U.S.C. 27a), for
purposes of section 131 of the Over-the-Counter Swaps Markets
Transparency and Accountability Act of 2010, the term
`identified banking product' does not include a retail
commodity transaction.''.

SEC. 740. OTHER AUTHORITY.

Unless otherwise provided by the amendments made by this
subtitle, the amendments made by this subtitle do not divest
any appropriate Federal banking agency, the Commodity Futures
Trading Commission, the Securities and Exchange Commission,
or other Federal or State agency of any authority derived
from any other applicable law.

SEC. 741. ENHANCED COMPLIANCE BY REGISTERED ENTITIES.

(a) Core Principles for Contract Markets.--Section 5(d) of
the Commodity Exchange Act (7 U.S.C. 7(d)) (as amended by
section 732(b)) is amended by striking paragraph (1) and
inserting the following:
``(1) Designation.--
``(A) In general.--To be designated as, and to maintain the
designation of, a board of trade as a contract market, the
board of trade shall comply with--
``(i) the core principles described in this subsection; and
``(ii) any requirement that the Commission may impose by
rule or regulation pursuant to section 8a(5).
``(B) Discretion of board of trade.--Unless the Commission
determines otherwise by rule or regulation, the board of
trade shall have reasonable discretion in establishing the
manner by which the board of trade complies with each core
principle.''.
(b) Core Principles.--Section 5b(c)(2) of the Commodity
Exchange Act (7 U.S.C. 7a-1(c)(2)) (as amended by section
725(c)) is amended by striking subparagraph (A) and inserting
the following:
``(A) Registration.--
``(i) In general.--To be registered and to maintain
registration as a derivatives clearing organization, a
derivatives clearing organization shall comply with--

``(I) the core principles described in this paragraph; and
``(II) any requirement that the Commission may impose by
rule or regulation pursuant to section 8a(5).

[[Page S3188]]

``(ii) Discretion of commission.--Unless the Commission
determines otherwise by rule or regulation, a derivatives
clearing organization shall have reasonable discretion in
establishing the manner by which the derivatives clearing
organization complies with each core principle.''.
(c) Effect of Interpretation.--Section 5c(a) of the
Commodity Exchange Act (7 U.S.C. 7a-2(a)) is amended by
striking paragraph (2) and inserting the following:
``(2) Effect of interpretation.--An interpretation issued
under paragraph (1) may provide the exclusive means for
complying with each section described in paragraph (1).''.

SEC. 742. INSIDER TRADING.

Section 4c(a) of the Commodity Exchange Act (7 U.S.C.
6c(a)) is amended by adding at the end the following:
``(3) Contract of sale.--It shall be unlawful for any
employee or agent of any department or agency of the Federal
Government who, by virtue of the employment or position of
the employee or agent, acquires information that may affect
or tend to affect the price of any commodity in interstate
commerce, or for future delivery, or any non-security-based
swap, and which information has not been disseminated by the
department or agency of the Federal Government holding or
creating the information in a manner which makes it generally
available to the trading public, or disclosed in a criminal,
civil, or administrative hearing, or in a congressional,
administrative, or Government Accountability Office report,
hearing, audit, or investigation, to use the information in
his personal capacity and for personal gain to enter into, or
offer to enter into--
``(A) a contract of sale of a commodity for future delivery
(or option on such a contract);
``(B) an option (other than an option executed or traded on
a national securities exchange registered pursuant to section
6(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78f(a)); or
``(C) a non-security-based swap.
``(4) Imparting of nonpublic information.--
``(A) Imparting of nonpublic information.--It shall be
unlawful for any employee or agent of any department or
agency of the Federal Government who, by virtue of the
employment or position of the employee or agent, acquires
information that may affect or tend to affect the price of
any commodity in interstate commerce, or for future delivery,
or any swap, and which information has not been disseminated
by the department or agency of the Federal Government holding
or creating the information in a manner which makes it
generally available to the trading public, or disclosed in a
criminal, civil, or administrative hearing, or in a
congressional, administrative, or Government Accountability
Office report, hearing, audit, or investigation, to impart
the information in his personal capacity and for personal
gain with intent to assist another person, directly or
indirectly, to use the information to enter into, or offer to
enter into--
``(i) a contract of sale of a commodity for future delivery
(or option on such a contract);
``(ii) an option (other than an option executed or traded
on a national securities exchange registered pursuant to
section 6(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78f(a)); or
``(iii) a non-security-based swap; and
``(B) Knowing use.--It shall be unlawful for any person who
receives information imparted by any employee or agent of any
department or agency of the Federal Government as described
in subparagraph (A) to knowingly use such information to
enter into, or offer to enter into--
``(i) a contract of sale of a commodity for future delivery
(or option on such a contract);
``(ii) an option (other than an option executed or traded
on a national securities exchange registered pursuant to
section 6(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78f(a)); or
``(iii) a non-security-based swap; and
``(C) Theft of nonpublic information.--It shall be unlawful
for any person knowingly to steal, convert, or misappropriate
acquire, by any means whatsoever, governmental information
held or created by any department or agency of the Federal
Government that may affect or tend to affect the price of any
commodity in interstate commerce, or for future delivery, or
any non-security-based swap, where such person knows, or in
the exercise of reasonable care should know acts in reckless
disregard of the fact, that such information has not been
disseminated by the department or agency of the Federal
Government holding or creating the information in a manner
which makes it generally available to the trading public, or
disclosed in a criminal, civil, or administrative hearing, or
in a congressional, administrative, or Government
Accountability Office report, hearing, audit, or
investigation, and to use such information, or to impart such
information with the intent to assist another person,
directly or indirectly, to use such information to enter
into, or offer to enter into--
``(i) a contract of sale of a commodity for future delivery
(or option on such a contract);
``(ii) an option (other than an option executed or traded
on a national securities exchange registered pursuant to
section 6(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78f(a)); or
``(iii) a non-security-based swap.

Provided, however, that nothing in this subparagraph shall
preclude a person that has provided information concerning,
or generated by, the person, its operations or activities, to
any employee or agent of any department or agency of the
Federal Government, voluntarily or as required by law, from
using such information to enter into, or offer to enter into,
a contract of sale, option, or non-security-based swap
described in clauses (i), (ii), or (iii).''.

SEC. 743. CONFORMING AMENDMENTS.

(a) Section 2(c)(1) of the Commodity Exchange Act (7 U.S.C.
2(c)(1)) is amended, in the matter preceding subparagraph
(A), by striking ``5a (to the extent provided in section
5a(g)),''.
(b) Section 4d of the Commodity Exchange Act (7 U.S.C. 6d)
(as amended by section 724) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1)--
(i) by striking ``engage as'' and inserting ``be a''; and
(ii) by striking ``or introducing broker'' and all that
follows through ``or derivatives transaction execution
facility'';
(B) in paragraph (1), by striking ``or introducing
broker''; and
(C) in paragraph (2), by striking ``if a futures commission
merchant,''; and
(2) by adding at the end the following:
``(g) It shall be unlawful for any person to be an
introducing broker unless such person shall have registered
under this Act with the Commission as an introducing broker
and such registration shall not have expired nor been
suspended nor revoked.''.
(c) Section 5c of the Commodity Exchange Act (7 U.S.C. 7a-
2) is amended--
(1) in subsection (a)(1)--
(A) by striking ``, 5a(d),''; and
(B) by striking ``and section (2)(h)(7) with respect to
significant price discovery contracts,''; and
(2) in subsection (f)(1), by striking ``section 4d(c) of
this Act'' and inserting ``section 4d(e)''.
(d) Section 5e of the Commodity Exchange Act (7 U.S.C. 7b)
is amended by striking ``or revocation of the right of an
electronic trading facility to rely on the exemption set
forth in section 2(h)(3) with respect to a significant price
discovery contract,''.
(e) Section 6(b) of the Commodity Exchange Act (7 U.S.C.
8(b)) is amended in the first sentence by striking ``, or to
revoke the right of an electronic trading facility to rely on
the exemption set forth in section 2(h)(3) with respect to a
significant price discovery contract,''.
(f) Section 12(e)(2)(B) of the Commodity Exchange Act (7
U.S.C. 16(e)(2)(B)) is amended--
(1) by striking ``section 2(c), 2(d), 2(f), or 2(g) of this
Act'' and inserting ``section 2(c), 2(f), or 2(i) of this
Act''; and
(2) by striking ``2(h) or''.
(g) Section 17(r)(1) of the Commodity Exchange Act (7
U.S.C. 21(r)(1)) is amended by striking ``section 4d(c) of
this Act'' and inserting ``section 4d(e)''.
(h) Section 22(b)(1)(A) of the Commodity Exchange Act (7
U.S.C. 25(b)(1)(A)) is amended by striking ``section 2(h)(7)
or''.
(i) Section 408(2)(C) of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 4421(2)(C)) is
amended--
(1) by striking ``section 2(c), 2(d), 2(f), or (2)(g) of
such Act'' and inserting ``section 2(c), 2(f), or 2(i) of
that Act''; and
(2) by striking ``2(h) or''.

Subtitle C--Regulation of Security-Based Swap Markets

SEC. 761. DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF
1934.

(a) Definitions.--Section 3(a) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)) is amended--
(1) in paragraph (13), by adding at the end the following:
``For security-based swaps, such terms include the execution,
termination (prior to its scheduled maturity date),
assignment, exchange, or similar transfer or conveyance of,
or extinguishing of rights or obligations under, a security-
based swap, as the context may require.'';
(2) in paragraph (14), by adding at the end the following:
``For security-based swaps, such terms include the execution,
termination (prior to its scheduled maturity date),
assignment, exchange, or similar transfer or conveyance of,
or extinguishing of rights or obligations under, a security-
based swap, as the context may require.'';
(3) in paragraph (39)--
(A) in subparagraph (B)(i)(I), by striking ``or government
securities dealer'' and inserting ``government securities
dealer, or swap participant'';
(B) in subparagraph (B)(i)(II), by inserting ``swap
participant,'' after ``government securities dealer,'';
(C) in subparagraph (C), by striking ``or government
securities dealer'' and inserting ``government securities
dealer, or swap participant''; and
(D) in subparagraph (D), by inserting ``swap participant,''
after ``government securities dealer,''; and
(4) by adding at the end the following:
``(65) Eligible contract participant.--The term `eligible
contract participant' has the same meaning as in section 1a
of the Commodity Exchange Act (7 U.S.C. 1a).
``(66) Swap participant.--The term `swap participant' has
the same meaning as in section 1a of the Commodity Exchange
Act (7 U.S.C. 1a).

[[Page S3189]]

``(67) Security-based swap.--The term `security-based swap'
means--
``(A) an instrument that is not a security; and
``(B) a swap, of which 1 or more material terms--
``(i) is based on the price, yield, value, or volatility
of--

``(I) any single security, any narrow-based group or
narrow-based index of securities, or any interest therein; or
``(II) any single loan, any narrow-based group or narrow-
based index of loans, or any interest therein;

``(ii) is dependent on the occurrence, non-occurrence, or
the extent of the occurrence of an event or contingency
associated with a potential financial, economic, or
commercial consequence that is related to or based on--

``(I) a single security, an interest in a security, an
issuer of a security, or narrow-based group or narrow-based
index of securities, or interests in securities or issuers of
securities; or
``(II) a single loan, an interest in a loan, a recipient of
a loan, or narrow-based group or narrow-based index of loans,
or interests in loans or recipients of loans;

``(iii) provides for the purchase or sale of no more than 9
securities or loans on a contingent basis, whether physically
or cash settled, if such agreement, contract, or transaction
predicates such purchase or sale (or a net cash payment in
lieu thereof) on the occurrence of a bona fide contingency
that might reasonably be expected to affect or be affected by
the creditworthiness of 1 or more reference entities; or
``(iv) allows for payment, settlement, termination,
fulfillment, or extinguishment of the swap or delivery on the
swap, by means of the transfer or receipt of no more than 9
securities or loans, including any narrow-based group or
narrow-based index of securities or loans.
``(68) Cleared swap.--The term `cleared swap' means any
swap that is, directly or indirectly, submitted to and
cleared by a derivatives clearing organization registered
with the Commodity Futures Trading Commission or a clearing
agency registered with the Commission.
``(69) Swap.--The term `swap' has the same meaning as in
section 1a of the Commodity Exchange Act (7 U.S.C. 1a).
``(70) Associated person of a swap participant.--
``(A) In general.--The term `associated person of a swap
participant' means--
``(i) any partner, officer, director, or branch manager of
a swap participant (including any individual who holds a
similar status or performs a similar function with respect to
any partner, officer, director, or branch manager of a swap
participant);
``(ii) any person that directly or indirectly controls, is
controlled by, or is under common control with, a swap
participant; and
``(iii) any employee of a swap participant.
``(B) Exclusion.--The term `associated person of a swap
participant' does not include any person associated with a
swap participant the functions of which are solely clerical
or ministerial.
``(71) Appropriate federal banking agency.--The term
`appropriate Federal banking agency' has the same meaning as
in section 3(q) of the Federal Deposit Insurance Act (12
U.S.C. 1813(q)).
``(72) Board.--The term `Board' means the Board of
Governors of the Federal Reserve System.
``(73) Prudential regulator.--The term `prudential
regulator' has the same meaning as in section 1a of the
Commodity Exchange Act (7 U.S.C. 1a).
``(74) Security-based swap data repository.--The term
`security-based swap data repository' means any person that
collects, calculates, prepares, or maintains information or
records with respect to transactions or positions in, or the
terms and conditions of, security-based swaps entered into by
third parties.
``(75) Swap end user.--The term `swap end user' has the
same meaning as in section 1a of the Commodity Exchange Act
(7 U.S.C. 1a).
``(76) Broad-based security index.--The term `broad-based
security index' has the same meaning as in section 1a of the
Commodity Exchange Act (7 U.S.C. la).''.
(b) Definitions Under the Securities Act of 1933.--Section
2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)) is
amended--
(1) in paragraph (3), by adding at the end the following:
``Any offer or sale of a security-based swap by or on behalf
of the issuer of the securities upon which such security-
based swap is based or which it references, an affiliate of
the issuer, or an underwriter, shall constitute a contract
for sale of, sale of, offer for sale, or offer to sell such
securities.''; and
(2) by adding at the end the following:
``(17) The terms `security-based swap', and `swap', have
the same meanings as in paragraphs (67) and (69),
respectively, of section 3(a) of the Securities Exchange Act
of 1934.
``(18) The terms `purchase' or `sale' of a security-based
swap, shall be deemed to mean the execution, termination
(prior to its scheduled maturity date), assignment, exchange,
novation, or similar transfer or conveyance of, or
extinguishment (prior to its scheduled extinguishment date)
of material rights or obligations under, a security-based
swap, as the context may require.''.

SEC. 762. REPEAL OF PROHIBITION ON REGULATION OF SWAPS.

(a) Repeal of Law.--The following provisions of law are
repealed:
(1) Sections 206A, 206B, and 206C of the Gramm-Leach-Bliley
Act (15 U.S.C. 78c note).
(2) Section 2A of the Securities Act of 1933 (15 U.S.C.
77b-1).
(3) Section 17(d) of the Securities Act of 1933 (15 U.S.C.
77q(d)).
(4) Section 3A of the Securities Exchange Act of 1934 (15
U.S.C. 78c-1).
(5) Section 9(i) of the Securities Exchange Act of 1934 (15
U.S.C. 78i(i)).
(6) Section 15(i) of the Securities Exchange Act of 1934
(15 U.S.C. 78o(i)), as added by section 303(f) of the
Commodity Futures Modernization Act of 2000 (Public Law 106-
554; 114 Stat. 2763A-455).
(7) Section 16(g) of the Securities Exchange Act of 1934
(15 U.S.C. 78p(g)).
(8) Section 20(f) of the Securities Exchange Act of 1934
(15 U.S.C. 78t(f)).
(9) Section 21A(g) of the Securities Exchange Act of 1934
(15 U.S.C. 78u-1(g)).
(b) Conforming Amendment to the Securities Act of 1933.--
Section 17(a) of the Securities Act of 1933 (15 U.S.C.
77q(a)) is amended by striking ``agreement (as defined in
section 206B of the Gramm-Leach-Bliley Act)'' and inserting
``(as defined in section 3(a)(67) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(67))''.
(c) Conforming and Other Amendments to the Securities
Exchange Act of 1934.--The Securities Exchange Act of 1934
(15 U.S.C. 78a et seq.) is amended--
(1) in section 9(a) (15 U.S.C. 78i(a)), by striking
paragraphs (2) through (5) and inserting the following:
``(2) To effect, alone or with 1 or more other persons, a
series of transactions in any security registered on a
national securities exchange, any security not so registered,
or in connection with any swap with respect to such security
creating actual or apparent active trading in such security,
or raising or depressing the price of such security, for the
purpose of inducing the purchase or sale of such security by
others.
``(3) If a dealer or broker, or other person selling or
offering for sale or purchasing or offering to purchase the
security to induce the purchase or sale of any security
registered on a national securities exchange, any security
not so registered, or any swap with respect to such security
by the circulation or dissemination in the ordinary course of
business of information to the effect that the price of any
such security will or is likely to rise or fall because of
market operations of any 1 or more persons conducted for the
purpose of raising or depressing the price of such security.
``(4) If a dealer or broker, or the person selling or
offering for sale or purchasing or offering to purchase the
security, to make, regarding any security registered on a
national securities exchange, any security not so registered,
or any swap with respect to such security, for the purpose of
inducing the purchase or sale of such security or such swap,
any statement which was at the time and in the light of the
circumstances under which it was made, false or misleading
with respect to any material fact, and which he knew or had
reasonable ground to believe was so false or misleading.
``(5) For a consideration, received directly or indirectly
from a dealer or broker, or other person selling or offering
for sale or purchasing or offering to purchase the security,
to induce the purchase of any security registered on a
national securities exchange, any security not so registered,
or any swap with respect to such security by the circulation
or dissemination of information to the effect that the price
of any such security will or is likely to rise or fall
because of the market operations of any 1 or more persons
conducted for the purpose of raising or depressing the price
of such security.'';
(2) in section 10 (15 U.S.C. 78j)--
(A) by striking ``agreement (as defined in section 206B of
the Gramm-Leach-Bliley Act)''; and
(B) by striking ``agreements (as defined in section 206B of
the Gramm-Leach-Bliley Act)'' each place that term appears;
(3) in section 15(c) (15 U.S.C. 78o(c)), by striking
``agreement (as defined in section 206B of the Gramm-Leach-
Bliley Act)'' each place that term appears;
(4) in section 16 (15 U.S.C. 78p)--
(A) in subsection (a)(2)(C), by striking ``agreement (as
defined in section 206(b) of the Gramm-Leach-Bliley Act)'';
(B) in subsection (a)(3)(B), by striking ``agreement (as
defined in section 206B of the Gramm-Leach-Bliley Act)''; and
(C) in subsection (b), by striking ``agreement (as defined
in section 206B of the Gramm-Leach-Bliley Act)'' each place
that the term appears;
(5) in section 20(d) (15 U.S.C. 78t(d)), by striking
``agreement (as defined in section 206B of the Gramm-Leach-
Bliley Act)''; and
(6) in section 21A(a)(1) (15 U.S.C. 78u-1), by striking
``agreement (as defined in section 206B of the Gramm-Leach-
Bliley Act)''.

SEC. 763. CLEARING.

(a) Registered Clearing Agencies.--Section 17A(b)(3) of the
Securities Exchange Act of 1934 (15 U.S.C. 78q-1) is amended
by adding at the end the following:
``(J) The Commission shall require clearing agencies to
provide information collected related to the clearing of
security-based swaps by such agencies to any of the following
regulatory authorities that requests such information:
``(i) The Board.
``(ii) The Commodity Futures Trading Commission.
``(iii) Each appropriate prudential regulator.

[[Page S3190]]

``(iv) The Financial Stability Oversight Council.
``(v) The Department of Justice.
``(vi) Any other person that the Commission determines to
be appropriate, including--

``(I) foreign financial supervisors (including foreign
futures authorities);
``(II) foreign central banks; and
``(III) foreign ministries.

``(K) A person that is required to be registered as a
clearing agency under this section shall register with the
Commission regardless of whether the person is also licensed
as a bank or a derivatives clearing organization registered
with the Commodity Futures Trading Commission under the
Commodity Exchange Act (7 U.S.C. 7a-1).''.
(b) Required Clearing.--The Securities Exchange Act of 1934
(15 U.S.C. 78a et seq.) is amended by inserting after section
17C, as added by this subtitle, the following:

``SEC. 17D. CLEARING OF SECURITY-BASED SWAP TRANSACTIONS.

``(a) Clearing Requirement.--
``(1) Swaps subject to mandatory clearing requirement.--In
accordance with paragraph (2), the Commission shall, jointly
with the Commodity Futures Trading Commission and the Board,
adopt rules to establish criteria for determining that a
swap, or any group, category, type, or class of swap is
required to be cleared.
``(2) Factors.--In carrying out paragraph (1), the
following factors shall be considered--
``(A) whether 1 or more derivatives clearing organizations
or clearing agencies accepts the swap or the group, category,
type, or class of swap for clearing;
``(B) whether the swap or the group, category, type, or
class of swap is traded pursuant to standard documentation
and terms;
``(C) the liquidity of the swap or the group, category,
type, or class of swap and its underlying commodity,
security, security of a reference entity, or group or index
thereof;
``(D) the ability to value the swap or the group, category,
type, or class of swap and its underlying commodity,
security, security of a reference entity, or group or index
thereof consistent with an accepted pricing methodology,
including the availability of intraday prices;
``(E) the size of the market for the swap or the group,
category, type, or class of swap and the available capacity,
operational expertise, and resources of the derivatives
clearing organization or clearing agency that accepts it for
clearing;
``(F) whether a clearing mandate would mitigate risk to the
financial system or whether such a mandate would unduly
concentrate risk in a clearing participant, derivatives
clearing organization, or clearing agency in a manner that
could threaten the solvency of that clearing participant, the
derivatives clearing organization, or the clearing agency;
and
``(G) such other factors as the Commission, the Commodity
Futures Trading Commission, and the Board may jointly
determine are relevant.
``(3) Security-based swaps subject to clearing
requirement.--The Commission--
``(A) shall review each security-based swap, or any group,
category, type, or class of security-based swap that is
currently listed for clearing and those which a clearing
agency notifies the Commission that the clearing agency plans
to list for clearing after the date of enactment of this
subsection;
``(B) may require, pursuant to the rules adopted under
paragraph (1) and through notice-and-comment rulemaking, that
a particular security-based swap or any group, category,
type, or class of security-based swap must be cleared if--
``(i) both counterparties are swap participants;
``(ii) the transaction was entered into on or before the
later of--

``(I) the date of publication of the requirement in the
Federal Register; or
``(II) the effective date of the requirement; and

``(iii) one of the counterparties directly or indirectly
controls, is controlled by, or is under common control with
the other counterparty to the transaction, provided, however,
that the Commission, jointly with the Financial Stability
Oversight Council, may determine, by rule or order, that
transactions between certain parties under common control are
subject to any requirement to clear under this clause; and
``(C) shall rely on economic analysis provided by
economists of the Commission in making any determination
under subparagraph (B), which economic analysis may refer to
any peer-reviewed or other relevant literature conducted by
independent researchers.
``(4) Effect.--
``(A) Nothing in this subsection affects the ability of a
clearing agency to list for permissive clearing any security-
based swap, or group, category, type, or class of security-
based swap.
``(B) The Commission shall not compel a clearing agency to
list a security-based swap or any group, category, type, or
class of security-based swap for clearing if the clearing
agency determines that the security-based swap or the group,
category, type, or class of security-based swap would--
``(i) adversely impact the business operations of the
clearing agency;
``(ii) impair the financial integrity of the clearing
agency; or
``(iii) pose a threat to the financial stability of the
United States.
``(5) Prevention of evasion.--
``(A) In general.--The Commission may prescribe rules, or
issue interpretations of such rules, as necessary to prevent
evasions of any requirement to clear under paragraph (3).
``(B) Considerations.--In issuing rules or interpretations
under subparagraph (A), the Commission shall consider--
``(i) the extent to which the terms of the security-based
swap or any group, category, type, or class of security-based
swap are similar to the terms of other security-based swaps
or other groups, categories, types, or classes of security-
based swaps that are required to be cleared by swap
participants under paragraph (3); and
``(ii) whether there is an economic purpose for any
differences in the terms of the security-based swap or group,
category, type, or class of security-based swap that are
required to be cleared by swap participants under paragraph
(3).
``(6) Elimination of requirement to clear.--The Commission
may, pursuant to the rules adopted under paragraph (1) and
through notice-and-comment rulemaking, rescind a requirement
imposed under paragraph (3) with respect to a security-based
swap or any group, category, type, or class of security-based
swap.
``(7) Petition for rulemaking.--Any person may file a
petition, pursuant to the rules of practice of the
Commission, requesting that the Commission--
``(A) use the authority granted to the Commission under
paragraph (3) to require swap participants to clear a
particular security-based swap or any group, category, type,
or class of security-based swap; or
``(B) use the authority granted to the Commission under
paragraph (6) to rescind a requirement for swap participants
to clear a particular security-based swap or any group,
category, type, or class of security-based swap.
``(8) Option to clear for counterparties that are not swap
participants.--Before entering into a security-based swap
transaction, any counterparty that is not a swap participant
may elect to clear a security-based swap that is subject to a
clearing requirement under paragraph (3). If such
counterparty elects to clear, it shall have the sole right to
select the derivatives clearing organization or clearing
agency at which the security-based swap will be cleared.
``(b) Segregation Requirements for Cleared Security-Based
Swaps.--
``(1) In general.--
``(A) Segregation required.--A swap participant shall treat
and deal with all money, securities, and property of any swap
customer received to margin, guarantee, or secure a security-
based swap cleared by or through a clearing agency (including
money, securities, or property accruing to the swap customer
as the result of such a swap) as belonging to the swap
customer.
``(B) Commingling prohibited.--Money, securities, and
property of a swap customer described in subparagraph (A)--
``(i) shall be separately accounted for; and
``(ii) shall not be--

``(I) commingled with the funds of the swap participant; or
``(II) used to margin, secure, or guarantee any trades or
contracts of any swap customer or person other than the
person for whom the same are held.

``(2) Exceptions.--
``(A) Use of funds.--
``(i) In general.--Notwithstanding paragraph (1), money,
securities, and property of a swap customer of a swap
participant described in paragraph (1) may, for convenience,
be commingled and deposited in the same 1 or more accounts
with any bank or trust company or with a clearing agency.
``(ii) Withdrawal.--Notwithstanding paragraph (1), such
share of the money, securities, and property described in
clause (i) as in the normal course of business shall be
necessary to margin, guarantee, secure, transfer, adjust, or
settle a cleared swap with a clearing agency, or with any
member of the clearing agency, may be withdrawn and applied
to such purposes, including the payment of commissions,
brokerage, interest, taxes, storage, and other charges,
lawfully accruing in connection with the cleared swap.
``(B) Commission action.--Notwithstanding paragraph (1), in
accordance with such terms and conditions as the Commission
may prescribe by rule, regulation, or order, any money,
securities, or property of the swap customer of a swap
participant described in paragraph (1) may be commingled and
deposited as provided in this subsection with any other
money, securities, or property received by the swap
participant and required by the Commission to be separately
accounted for and treated and dealt with as belonging to the
swap customer.
``(3) Permitted investments.--Money described in paragraph
(1) may be invested in obligations of the United States or in
any other investment that has minimal credit, market, and
liquidity risks that the Commission may by rule or regulation
prescribe, and such investments shall be made in accordance
with such rules and regulations and subject to such
conditions as the Commission may prescribe.
``(4) Prohibition.--It shall be unlawful for any person,
including any clearing agency and any depository institution,
that has received any money, securities, or property for
deposit in a separate account or accounts as provided in
paragraph (1) to hold, dispose of,

[[Page S3191]]

or use any such money, securities, or property as belonging
to the depositing swap participant or any person other than
the swap customer of the swap participant.''.

SEC. 764. TRANSPARENCY OF SECURITY-BASED SWAP TRANSACTION
DATA.

(a) Purposes.--The Securities and Exchange Commission is
directed, consistent with the purposes of this subtitle, to
use the authorities granted to it under this title, and the
amendments made by this subtitle, to facilitate the prompt
and accurate collection, calculation, processing or
preparation, and public dissemination of information on
transactions and positions in security-based swaps.
(b) National Trade Reporting of Security-Based Swap
Transactions.--The Securities Exchange Act of 1934 is amended
by inserting after section 17B (15 U.S.C. 78q-2) the
following:

``SEC. 17C. NATIONAL TRADE REPORTING OF SECURITY-BASED SWAP
TRANSACTIONS.

``(a) Mandatory Reporting of Security-Based Swap
Transactions.--
``(1) In general.--
``(A) Transactions in security-based swaps.--Any person
that enters into or effects a transaction in a security-based
swap shall report such transaction through a clearing agency
or a security-based swap data repository registered with the
Commission within the period specified by any rule or
regulation adopted by the Commission under this paragraph.
``(B) Uncleared security-based swaps.--If no registered
security-based swap data repository accepts an uncleared
security-based swap, the person shall report the transaction
to the Commission pursuant to the requirements that the
Commission may by rule or regulation prescribe.
``(C) Mandatory disclosures.--Each transaction report
required under subparagraph (A) shall disclose whether the
transaction is a bona fide hedging swap transaction, as that
term is defined in section 1a of the Commodity Exchange Act
(7 U.S.C. 1a), and any other information that the Commission
has, by rule or regulation, prescribed as necessary or
appropriate in furtherance of the purposes of this section.
``(2) Permissible reporting for a counterparty that is not
a security-based swap participant.--A swap participant may
report a transaction in accordance with this section on
behalf of its counterparty to that transaction provided that
counterparty is not a swap participant.
``(3) Rulemaking required.--Not later than 180 days after
the date of enactment of this section, the Commission shall
by rule or regulation establish a schedule for the reporting
through a clearing agency or registered security-based swap
data repository or to the Commission of each security-based
swap transaction or group, category, type, or class of
security-based swap transactions entered into--
``(A) before the effective date of the Commission's rule or
regulation and still outstanding as of such effective date;
and
``(B) on or after the effective date of the Commission's
rule or regulation.
``(b) Confidentiality of Information Provided.--No non-
public information provided to or obtained by the Commission
under this section may be disclosed to any other person.
Nothing in this subsection shall authorize the Commission to
withhold information from Congress, or prevent the Commission
from complying with a request for information from any other
Federal department or agency or foreign government with which
the Commission has an information sharing arrangement that
requests the information for purposes within the scope of its
jurisdiction, or complying with an order of a court of the
United States in an action brought by the United States or
the Commission.
``(c) Public Dissemination of Certain Information
Provided.--
``(1) In general.--
``(A) Prices and volumes.--Notwithstanding subsection (b),
the Commission is directed to use the authority granted to
the Commission under this title to facilitate the public
dissemination of prices and volumes of completed security-
based swap transactions to provide investors and other market
participants with information about recently executed
transactions for the purposes of helping such investors and
participants to--
``(i) mark existing security-based swap positions to
market;
``(ii) make informed decisions before executing future
transactions; and
``(iii) assess the quality of transactions that such
investors and participants have executed.
``(B) Rulemaking.--For each security-based swap or group,
category, type, or class of security-based swap, the
Commission shall determine by rule the extent to which
individual or aggregated transaction data shall be
disseminated and the timeliness of such disseminations.
``(2) Reliance on economic analysis.--
``(A) In general.--In making determinations under this
subsection, the Commission shall rely on economic analyses
provided by the Chief Economist of the Commission and
independent researchers that empirically evaluate the effects
of increasing price transparency on measures of efficiency,
competition, and market quality, including transaction costs
and liquidity.
``(B) Pilot programs.--To facilitate the empirical analyses
under subparagraph (A), the Commission may design pilot
programs that increase price transparency on selected
security-based swaps.
``(3) Chief economist report.--
``(A) In general.--Whenever the Commission publishes a
release giving notice of a proposed rulemaking under this
subsection, and affords interested persons an opportunity to
comment on such proposed rulemaking or publishes a release
adopting a final rule, such release shall include as a part
thereof a report by the Chief Economist of the Commission.
``(B) Required inclusions.--Each report required under
subparagraph (A) shall--
``(i) describe the economic analysis of the expected
consequences of the proposed or final Commission action;
``(ii) refer to any peer-reviewed or other literature,
including any empirical study undertaken by the staff of the
Commission, that is relevant to the analysis contained in the
report; and
``(iii) describe the extent to which the conclusions of the
report remain subject to uncertainty.
``(4) Protection of proprietary information.--
``(A) Considerations.--In making determinations under this
subsection, the Commission shall consider whether public
dissemination of individual or aggregate transaction data
could result in the dissemination of proprietary information
about the swap transactions, positions, trading strategies,
or the ability of particular market participants to conduct
effective hedging or risk management.
``(B) Required rules.--Any rules adopted by the Commission
under this subsection shall include protections to ensure
that the public dissemination of security-based swap
transaction data does not result in the disclosure of the
proprietary information described in subparagraph (A).
``(5) Registered entities and public reporting.--The
Commission may require clearing agencies and registered
security-based swap data repositories to publicly disseminate
the security-based swap transaction and pricing data required
to be reported under this subsection.
``(6) Quarterly public reporting of aggregate security-
based swap data.--
``(A) In general.--In accordance with subparagraph (B), the
Commission shall issue a written report on a quarterly basis
to make available to the public information relating to--
``(i) the trading and clearing in the major security-based
swap categories; and
``(ii) the market participants and developments in new
products.
``(B) Use; consultation.--In preparing a report under
subparagraph (A), the Commission shall--
``(i) use any information reported directly to the
Commission and information from registered security-based
swap data repositories and clearing agencies; and
``(ii) consult with the Office of the Comptroller of the
Currency, the Bank for International Settlements, and such
other regulatory bodies as may be necessary.
``(d) Registration.--
``(1) In general.--A security-based swap data repository
may register by filing with the Commission an application in
such form as the Commission, by rule or regulation, shall
prescribe containing such information as the Commission, by
rule or regulation, may prescribe as necessary or appropriate
in furtherance of the purposes of this section.
``(2) Inspection and examination.--Each registered
security-based swap data repository shall be subject to
inspection and examination by any representative of the
Commission.
``(3) Sharing of information.--The Commission shall require
each registered security-based swap data repository to
provide information collected related to its functions as a
security-based swap data repository to any of the following
regulatory authorities that requests such information:
``(A) The Board.
``(B) The Commodity Futures Trading Commission.
``(C) Each appropriate prudential regulator.
``(D) The Financial Stability Oversight Council.
``(E) The Department of Justice.
``(F) Any other person that the Commission determines to be
appropriate, including--
``(i) foreign financial supervisors (including foreign
futures authorities);
``(ii) foreign central banks; and
``(iii) foreign ministries.
``(e) Standard Setting.--
``(1) Data identification.--The Commission shall prescribe
standards that specify the data elements for each security-
based swap, including whether the transaction is a bona fide
hedging swap transaction as defined in section 1a of the
Commodity Exchange Act (7 U.S.C. la), that shall be collected
and maintained by each registered security-based swap data
repository.
``(2) Data collection and maintenance.--The Commission
shall prescribe data collection and data maintenance
standards for security-based swap data repositories.
``(3) Comparability.--The standards prescribed by the
Commission under this subsection shall be comparable to the
data standards imposed by the Commission on clearing agencies
in connection with such agencies' clearing of security-based
swaps.
``(f) Duties.--A registered security-based swap data
repository shall--

[[Page S3192]]

``(1) accept data prescribed by the Commission for 1 or
more security-based swap under subsection (b);
``(2) confirm with both counterparties to the security-
based swap the accuracy of the data that was submitted;
``(3) maintain the data described in paragraph (1) in such
form, in such manner, and for such period as may be required
by the Commission;
``(4)(A) provide direct electronic access to the Commission
(or any designee of the Commission, including another
registered entity); and
``(B) provide the information described in paragraph (1) in
such form and at such frequency as the Commission may require
to comply with the public reporting requirements under
subsection (c)(6);
``(5) at the direction of the Commission, establish
automated systems for monitoring, screening, and analyzing
security-based swap data; and
``(6) maintain the confidentiality of security-based swap
transaction information that the registered security-based
swap data repository receives from a counterparty, swap
participant, or any other registered entity in accordance
with the requirements that the Commission shall jointly with
the Commodity Futures Trading Commission prescribe through
notice-and-comment rulemaking.
``(g) Regulatory Requirements Applicable to Registered
Security-Based Swap Data Repositories.--The Commission shall
adopt rules, by notice-and-comment rulemaking, for security-
based swap data repositories that address the following:
``(1) Antitrust considerations.--Unless specifically
reviewed and approved by the Commission for antitrust
purposes, a registered security-based swap data repository
may not--
``(A) adopt any rule or take any action that results in any
unreasonable restraint of trade; or
``(B) impose any material anticompetitive burden on the
trading, clearing, or reporting of transactions.
``(2) Governance arrangements.--Each registered security-
based swap data repository shall establish governance
arrangements--
``(A) that are transparent; and
``(B) that assure fair representation of the participants
of the repository in reasonable proportion to the use of the
repository by such participants in the selection of the
directors of the repository and the administration of the
affairs of the repository.
``(3) Conflicts of interest.--Each registered security-
based swap data repository shall--
``(A) establish and enforce rules to minimize conflicts of
interest in the decision-making process of the security-based
swap data repository; and
``(B) establish a process for resolving conflicts of
interest described in subparagraph (A).
``(4) Non-discriminatory access.--A registered security-
based swap data repository--
``(A) may not mandate directly or indirectly the
substantive terms and conditions of transactions reported to
the repository;
``(B) shall provide for the equitable allocation of
reasonable dues, fees, and other charges among the
participants of the repository and shall not impose any
schedule of prices, or fix rates or other fees, for services
rendered by such participants;
``(C) shall provide for participation in the repository by
any swap participant and any other person or class of persons
as the Commission, by rule or regulation, may determine to be
necessary or appropriate in furtherance of the purposes of
this section; and
``(D) shall not unfairly discriminate in the admission of
participants or among participants in the use of the
repository.''.

SEC. 765. REGISTRATION AND REGULATION OF SWAP PARTICIPANTS.

Section 17 of the Securities Exchange Act of 1934 (15
U.S.C. 78q) is amended by adding at the end the following:
``(l) Registration and Regulation of Swap Participants.--
``(1) Registration.--Swap participants shall register with
the Commission.
``(2) Notice registration.--A swap participant shall be
exempt from registration with the Commission if such
participant files a notice registration with the Commission
in the form and manner that the Commission shall prescribe,
jointly with the Commodity Futures Trading Commission, by
notice-and-comment rulemaking and--
``(A) such participant is exempt pursuant to a rule or
order issued by the Commission, jointly with the Commodity
Futures Trading Commission, to exempt swap participants that
engage primarily in non-security-based swap transactions and
are registered as swap participants with the Commodity
Futures Trading Commission; or
``(B) all of its outstanding swap transactions are cleared
swaps.
``(3) Requirements.--
``(A) In general.--A person shall register as a swap
participant by filing a registration application with the
Commission.
``(B) Contents.--
``(i) In general.--An application for registration under
this subsection shall be made in such form and manner and
contain such information as the Commission, jointly with the
Commodity Futures Trading Commission through notice-and-
comment rulemaking, shall prescribe concerning the swap
activities of the swap participant.
``(ii) Continual reporting.--A registered swap participant
shall continue to submit to the Commission reports that
contain such information pertaining to the swap activities of
the swap participant as the Commission may require.
``(C) Transition.--Rules under this section shall provide
for the registration of swap participants not later than the
date that is 1 year after the date of enactment of the Over-
the-Counter Swaps Markets Transparency and Accountability Act
of 2010.
``(D) Statutory disqualification.--Except to the extent
otherwise specifically provided by rule, regulation, or
order, it shall be unlawful for a swap participant to permit
any person associated with a swap participant who is subject
to a statutory disqualification to effect or be involved in
effecting swaps on behalf of the swap participant, if the
swap participant knew, or in the exercise of reasonable care
should have known, of the statutory disqualification.
``(m) Capital and Margin Requirements.--
``(1) Capital requirements for prudentially regulated swap
participants.--Each swap participant for which there is a
prudential regulator shall meet such minimum capital
requirements as such prudential regulator shall prescribe
pursuant to the authority of the prudential regulator.
``(2) Margin requirements for swap participants for
uncleared security-based swaps.--
``(A) In general.--Except as provided in paragraph (C), the
Commission shall prescribe by rule or regulation the minimum
margin requirements that apply to transactions between swap
participants in any particular uncleared security-based swap
or any group, category, type, or class of security-based
swap, as the Commission deems appropriate for the risk of
that particular uncleared security-based swap or class,
group, category, type of security-based swap, for the
purposes of--
``(i) reducing the risk of losses to counterparties; and
``(ii) preserving the financial integrity of markets
trading security-based swaps.
``(B) Considerations.--The Commission shall not issue rules
under this subsection unless the Commission determines that
such rules--
``(i) would not inappropriately encourage or discourage the
clearing of certain security-based swaps, resulting in an
undue increase in risk to the financial system;
``(ii) are supported by economic analysis provided by the
Chief Economist of the Commission; and
``(iii) would not impose any unnecessary burden on
competition.
``(C) Outstanding security-based swap positions.--The
Commission and the Commodity Futures Trading Commission may
by joint notice-and-comment rulemaking or order exempt any
security-based swap, group, category, type, or class of
security-based swap entered into on or before the date of
enactment of this Act. In determining whether an exemption is
appropriate, the Commission and the Commodity Futures Trading
Commission shall take into account the notional value, the
tenor, and the risk to the financial stability of the United
States posed by the underlying security-based swap, group,
category, type, or class of security-based swap.
``(D) Affiliate transactions.--The Commission shall not
impose minimum margin requirements on security-based swap
transactions in which one counterparty directly or indirectly
controls, is controlled by, or is under common control with
the other counterparty, provided, however, that the
Commission, jointly with the Financial Stability Oversight
Council, may determine, by notice-and-comment rulemaking,
that transactions between certain parties under common
control are subject to the minimum margin requirements
imposed by the Commission under this clause.
``(3) Special margin requirements for uncleared security-
based swap transactions involving a swap participant with a
substantial net uncollateralized security-based swap
position.--If a swap participant has a substantial net
uncollateralized swap position, any subsequent swap
transaction, regardless of whether the swap participant's
counterparty is a swap participant, shall be subject to--
``(A) any applicable clearing requirement under section
17D(a); and
``(B) any applicable margin requirements that the
Commission has prescribed under paragraph (2).
``(4) Substantial net uncollateralized position.--
``(A) In general.--From time to time, the Financial
Stability Oversight Council shall define, by rule or
regulation, the term `substantial net uncollateralized
position' by identifying the level of uncollateralized
positions in swaps that a swap participant can hold without
posing a threat to the financial system stability of the
United States.
``(B) Reliance on economic analysis.--In making
determinations under this subsection, the Commission and the
Board shall rely on economic analysis provided by economists
of the Commission and economists of the Board.
``(n) Reporting and Recordkeeping.--With respect to its
swap business, each swap participant registered with the
Commission--
``(1) shall make such reports as are required by the
Commission, jointly with the Commodity Futures Trading
Commission through notice-and-comment rulemaking;

[[Page S3193]]

``(2)(A) for which there is a prudential regulator, shall
keep books and records in such form and manner and for such
period as may be prescribed by the prudential regulator; and
``(B) for which there is no prudential regulator, shall
keep books and records in such form and manner and for such
period as is be prescribed by the Commission, jointly with
the Commodity Futures Trading Commission through notice-and-
comment rulemaking; and
``(3) shall keep books and records described in paragraph
(2)(B) open to inspection and examination by any
representative of the Commission.
``(o) Business Conduct Standards and Requirements.--With
respect to its swap business, each swap participant--
``(1) for which there is a prudential regulator, shall
comply with such business conduct standards and requirements
as the prudential regulator may impose; and
``(2) for which there is no prudential regulator, shall
comply with such business conduct standards and requirements
as the Commission, jointly with the Commodity Futures Trading
Commission through notice-and-comment rulemaking, shall
prescribe. The business conduct requirements prescribed under
this paragraph shall--
``(A) establish the standard of care required for a swap
participant to verify that any counterparty meets the
eligibility standards for an eligible contract participant;
and
``(B) require disclosure by the swap participant to any
counterparty to the swap (other than a counterparty that is a
swap participant) of--
``(i) information about the material risks and
characteristics of the security-based swap; and
``(ii) any material conflicts of interest that the swap
participant may have in connection with the security-based
swap.
``(p) Documentation and Back Office Standards.--Each swap
participant registered with the Commission--
``(1) for which there is a prudential regulator, shall
comply with such documentation and back office standards as
the prudential regulator may impose; and
``(2) for which there is no prudential regulator, shall
conform with such standards as the Commission, jointly with
the Commodity Futures Trading Commission through notice-and-
comment rulemaking, may prescribe that relate to timely and
accurate confirmation, processing, netting, documentation,
and valuation of all security-based swaps.
``(q) Confidentiality.--
``(1) In general.--Notwithstanding any other provision of
law, the Commission may not be compelled to disclose any
information required by Commission rule or regulation to be
reported to the Commission under this subsection, except that
nothing in this paragraph authorizes the Commission to
withhold information from Congress, or prevent the Commission
from complying with a request for information from any other
Federal department or agency requesting information for
purposes within the scope of its jurisdiction, or complying
with an order of a court of the United States in an action
brought by the United States or the Commission.
``(2) Rule of construction.--For purposes of section 552 of
title 5, United States Code, this subsection shall be
considered a statute described in subsection (b)(3)(B) of
such section 552.
``(r) Segregation Requirements for Initial Margin.--
``(1) Segregation of initial margin.--
``(A) Notification of right to segregate initial margin.--A
swap participant shall notify its counterparty before
entering into a security-based swap transaction of the right
of the counterparty to require segregation of the funds or
other property supplied as initial margin for the purpose of
margining, guaranteeing, or securing the obligations of the
counterparty.
``(B) Segregation and maintenance of initial margin.--At
the request, made before entering into a security-based swap
transaction, of a counterparty that provides funds or other
property as initial margin to a swap participant for the
purpose of margining, guaranteeing, or securing the
obligations of the counterparty, the swap participant shall--
``(i) segregate the funds or other property for the benefit
of the counterparty; and
``(ii) in accordance with such rules and regulations as the
Commission may promulgate jointly with the Commodity Futures
Trading Commission, maintain the funds or other property in a
segregated account separate from the assets and other
interests of the swap participant.
``(C) Notification of excess variation margin.--Pursuant to
rules and regulations adopted by the Commission, a swap
participant who received funds or other property shall notify
any counterparty who provided such funds or other property if
the swap participant is holding excess net variation margin
from that counterparty.
``(2) Applicability.--The requirements described in
paragraph (1) shall--
``(A) apply only to a security-based swap between a
counterparty and a swap participant that is not submitted for
clearing to a clearing agency;
``(B) not apply to variation margin payments; and
``(C) not preclude any commercial arrangement regarding--
``(i) the investment of segregated funds or other property
that may only be invested in such investments as the
Commission may permit by rule or regulation; and
``(ii) the related allocation of gains and losses resulting
from any investment of the segregated funds or other
property.
``(3) Use of independent third-party custodians.--Each
segregated account described in paragraph (1), if requested
by the counterparty, may be--
``(A) carried by an independent third-party custodian; and
``(B) designated as a segregated account for and on behalf
of the counterparty.
``(4) Reporting requirement.--If a counterparty does not
choose to require segregation of the funds or other property
supplied as initial margin for the purpose of margining,
guaranteeing, or securing the obligations of the
counterparty, the swap participant shall report to the
counterparty of the swap participant on a quarterly basis
that the back office procedures of the swap participant
relating to initial margin and collateral requirements are in
compliance with the agreement of the counterparties.''.

SEC. 766. LARGE SECURITY-BASED SWAP TRADER REPORTING.

The Securities Exchange Act of 1934 is amended by inserting
after section 10A (15 U.S.C. 78j-1) the following:

``SEC. 10B. LARGE SECURITY-BASED SWAP TRADER REPORTING.

``(a) In General.--A person that buys or sells a security-
based swap shall file or cause to be filed with the
Commission a report, if--
``(1) such person directly or indirectly buys or sells a
particular security-based swap or class of security-based
swap during any day equal to or in excess of any daily
reporting threshold that has been fixed, by rule or
regulation, with respect to a particular security-based swap
or class of security-based swap by the Commission; or
``(2) such person directly or indirectly has or obtains a
net position in such security-based swap or class of
security-based swap equal to or in excess of any net position
reporting threshold that has been fixed, by rule or
regulation, with respect to that particular security-based
swap or class of security-based swap by the Commission.
``(b) Report.--Each report required under subsection (a)
shall--
``(1) be in such form and be filed at such time as the
Commission shall prescribe, by rule or regulation; and
``(2) contain such information regarding any position or
positions in such security-based swap and any group or index
of securities on which such security-based swap is based or
is referenced, or to which such security-based swap is
related, or as to which the issuer of such security is
referenced and any other instrument relating to such security
or group or index of securities.
``(c) Determination of Reporting Thresholds.--
``(1) Chief economist.--In determining the reporting
thresholds set forth in subsection (a), the Commission shall
rely on economic analysis provided by the Chief Economist of
the Commission.
``(2) Considerations.--The economic analysis provided under
paragraph (1) shall take into account--
``(A) the market oversight benefits and the costs to market
participants from preparing reports; and
``(B) the costs to the Commission from processing
reports.''.

SEC. 767. CERTAIN REPORTING REQUIREMENTS.

(a) Beneficial Ownership Reporting.--Section 13 of the
Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended--
(1) in subsection (d), by adding at the end the following:
``(7) For purposes of this subsection, the Commission may
determine by rule or regulation that a person is deemed to
have acquired beneficial ownership of an equity security upon
the purchase or sale of a swap that results in the person
acquiring voting or control rights equivalent to those
arising from beneficial ownership of the equity security.'';
and
(2) in subsection (g), by adding at the end the following:
``(7) For purposes of this subsection, the Commission may
determine by rule or regulation that a person is deemed to
have acquired beneficial ownership of an equity security upon
the purchase or sale of a swap that results in the person
acquiring voting or control rights equivalent to those
arising from beneficial ownership of the equity security.''.
(b) Institutional Investment Manager Reporting.--Section
13(f)(5) of the Securities Exchange Act of 1934 (15 U.S.C.
78m(f)(5)) is amended by adding at the end the following:
``(C) For purposes of this subsection, an account shall be
deemed to be holding equity securities of a class described
in subsection (d)(1), if the account holds swaps that the
Commission has determined, by rule or regulation, result in
the person acquiring voting or control rights equivalent to
those arising from beneficial ownership of the equity
security.''.

SEC. 768. PROHIBITION OF MARKET MANIPULATION, FRAUD, AND
OTHER MARKET ABUSES.

(a) Rulemaking Authority To Prevent Fraud, Manipulation,
and Deceptive Conduct in Security-Based Swaps.--Section 9 of
the Securities Exchange Act of 1934 (15 U.S.C. 78i) is
amended--

[[Page S3194]]

(1) in the section heading, by inserting ``AND SECURITY-
BASED SWAP'' after ``SECURITY''; and
(2) by adding at the end the following:
``(j) Abuses Related to Security-Based Swaps.--It shall be
unlawful for any person, directly or indirectly, by the use
of any means or instrumentality of interstate commerce or of
the mails, or of any facility of any national securities
exchange, to effect any transaction in, or to induce or
attempt to induce the purchase or sale of, any security-based
swap, in connection with which such person engages in any
fraudulent, deceptive, or manipulative act or practice, makes
any fictitious quotation, or engages in any transaction,
practice, or course of business which operates as a fraud or
deceit upon any person. The Commission shall, for purposes of
this subsection, by rule or regulation, define and prescribe
means reasonably designed to prevent, such transactions,
acts, practices, and courses of business as are fraudulent,
deceptive, or manipulative, and such quotations as are
fictitious.''.
(b) Additions of Swaps to Certain Anti-Manipulation
Provisions.--Section 9(b) of the Securities Exchange Act of
1934 (15 U.S.C. 78i(b)) is amended by striking paragraphs (1)
through (3) and inserting the following:
``(1) any transaction in connection with any security,
whereby any party to such transaction acquires--
``(A) any put, call, straddle, or other option or privilege
of buying the security from or selling the security to
another without being bound to do so;
``(B) any security futures product on the security; or
``(C) any swap involving the security or the issuer of the
security;
``(2) any transaction in connection with any security with
relation to which he has, directly or indirectly, any
interest in any--
``(A) such put, call, straddle, option, or privilege;
``(B) such security futures product; or
``(C) such swap; or
``(3) any transaction in any security for any account that
the person has reason to believe has, and that actually has,
directly or indirectly, any interest in any--
``(A) such put, call, straddle, option, or privilege;
``(B) such security futures product with relation to such
security; or
``(C) any swap involving such security or the issuer of
such security.''.

SEC. 769. STATE GAMING AND BUCKET SHOP LAWS.

Section 28(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78bb(a)) is amended to read as follows:
``(a) Damages Amounts.--
``(1) Actual damages.--Except as provided in subsection
(f), the rights and remedies provided by this title shall be
in addition to any and all other rights and remedies that may
exist at law or in equity, but no person permitted to
maintain a suit for damages under the provisions of this
title shall recover, through satisfaction of judgment in 1 or
more actions, a total amount in excess of the actual damages
to such person on account of the act complained of. Except as
otherwise specifically provided in this title, nothing in
this title shall affect the jurisdiction of the securities
commission (or any agency or officer performing like
functions) of any State over any security or any person,
insofar as it does not conflict with the provisions of this
title or the rules and regulations thereunder.
``(2) Applicability of certain state laws.--No State law
which prohibits or regulates the making or promoting of
wagering or gaming contracts, or the operation of `bucket
shops' or other similar or related activities, shall
invalidate--
``(A) any put, call, straddle, option, privilege, or other
security subject to this title (except any security that has
a pari-mutual payout or otherwise is determined by the
Commission, acting by rule, regulation, or order, to be
appropriately subject to such laws), or apply to any activity
which is incidental or related to the offer, purchase, sale,
exercise, settlement, or closeout of any such security;
``(B) any security-based swap between eligible contract
participants; or
``(C) any security-based swap effected on a national
securities exchange registered pursuant to section 6(b).
``(3) Limitation.--Notwithstanding paragraph (2), no
provision of State law regarding the offer, sale, or
distribution of securities shall apply to any transaction in
a security futures product, except that this paragraph may
not be construed as limiting any State antifraud law of
general applicability.''.

SEC. 770. PROTECTIONS FOR MARKETING SECURITY-BASED SWAPS AND
LISTING STANDARDS.

Section 6 of the Securities Exchange Act of 1934 (15 U.S.C.
78f) is amended by adding at the end the following:
``(l) Trading in Security-Based Swaps.--
``(1) In general.--It shall be unlawful for any person to
effect a transaction in a security-based swap with or for a
person that is not an eligible contract participant, unless
such transaction is effected on a national securities
exchange registered pursuant to subsection (b).
``(2) Listing standards required.--A national securities
exchange or a national securities association registered
pursuant to section 15A(a) may trade security-based swaps
that conform with listing standards that such exchange or
association files with the Commission under section 19(b).''.

SEC. 771. ENFORCEABILITY OF SECURITY-BASED SWAPS.

Section 29(b) of the Securities Exchange Act of 1934 (15
U.S.C. 78cc(b)) is amended by striking ``and (B) that no
contract'' and inserting the following: ``(B) that no
agreement, contract, or transaction that is a security-based
swap shall be void, voidable, or unenforceable by either
party to such security-based swap, and no party thereto shall
be entitled to rescind, or recover any payment made with
respect to, such security-based swap under this section or
any other provision of securities laws based solely on the
failure of either party to the agreement, contract, or
transaction to satisfy its respective obligations under
sections 6(l), 13, 15(b), 17, and 17C of this title with
respect to such security-based swap, and (C) that no
contract''.
______

SA 3817. Mr. WHITEHOUSE 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:

On page 1171, between lines 5 and 6, insert the following:

SEC. 989C. PREVENTING BLANK CHECK BAILOUTS.

(a) Short Title.--This section may be cited as the
``Preventing Blank Check Bailouts Act of 2010''.
(b) Definitions.--In this section:
(1) Covered entity.--The term ``covered entity''--
(A) means a corporation, partnership, association, trust,
firm, joint stock company, or other business entity that--
(i) has outstanding not less than $10,000,000,000 in
Government assistance; or
(ii) receives Government assistance for the protection of
the public; and
(B) does not include a State, a political subdivision of a
State, or an entity owned or controlled by a State or a
political subdivision of a State.
(2) Executive compensation.--The term ``executive
compensation'' includes wages, salary, deferred compensation,
benefits, retirement arrangements, options, bonuses, office
fixtures, goods and other property, travel, entertainment or
vacation expenses, and forms of compensation, obligation, or
expense that are not routinely provided to all other
employees of a covered entity.
(3) Government assistance.--The term ``Government
assistance'' means any grants, gifts, loans, equity or debt
purchases, or other investments by the United States made or
provided to prevent the insolvency of the recipient for the
protection of the public.
(4) Taxpayer protection action.--The term ``taxpayer
protection action'' means a civil action brought under
subsection (c)(1).
(c) Taxpayer Protection Actions.--
(1) In general.--The district courts of the United States
shall have jurisdiction of a civil action brought by the
Attorney General of the United States against a covered
entity seeking the abrogation of contracts of the covered
entity.
(2) Consultation.--The Attorney General shall consult with
the President and the Secretary of the Treasury before
bringing a taxpayer protection action.
(3) Remedies.--
(A) In general.--In a taxpayer protection action, the court
may abrogate contracts of the covered entity, including
contracts relating to executive compensation, in accordance
with subparagraph (B), if the court determines that a covered
entity--
(i) would have become insolvent if the covered entity had
not received the Government assistance outstanding to or in
the covered entity; or
(ii) would become insolvent if the covered entity does not
receive Government assistance.
(B) Contracts to be abrogated.--In evaluating the contracts
of a covered entity under this paragraph, a court shall apply
a standard to the contracts that seeks to approximate the
outcome that would have resulted for the parties to the
contract if the covered entity--
(i) had not received the Government assistance; and
(ii) had filed a petition under chapter 7 of title 11,
United States Code.
(4) Individuals and entities affected.--If the property
rights of an individual or entity will be affected by a
taxpayer protection action, the individual or entity may--
(A) intervene as a matter of right in the taxpayer
protection action; and
(B) upon intervening, assert any claim relating to the
property rights of the individual or entity, including a
claim--
(i) relating to rights protected under the due process
clause of the fifth amendment to the Constitution of the
United States or the due process clause of section 1 of the
14th

[[Page S3195]]

amendment to the Constitution of the United States; or
(ii) that the covered entity is not insolvent or would not
have become insolvent if the covered entity had not received
the Government assistance.
______

SA 3818. Mr. MENENDEZ (for himself and Mr. Merkley), 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:

On page 1068, strike line 10 and all that follows through
page 1069, line 6, and insert the following:

SEC. 955. EMPLOYEE HEDGING PROHIBITED.

Section 12 of the Securities Exchange Act of 1934 (15
U.S.C. 78l) is amended by adding at the end the following:
``(m) Hedging by Officers and Directors Prohibited.--
``(1) Definitions.--In this subsection--
``(A) the term `covered employee' means--
``(i) an officer or director of an issuer of a class of
securities registered under this section; and
``(ii) an employee of an issuer of a class of securities
registered under this section who receives from the issuer
annual wages of $1,000,000 or more;
``(B) the term `related person' means a related person of
an officer, director, or employee described in subparagraph
(A), as defined by the Commission, by rule; and
``(C) the term `wages' has the same meaning as in section
3121(a) of the Internal Revenue Code of 1986, without regard
to paragraph (1) thereof.
``(2) Prohibition.--A covered employee or related person
may not--
``(A) purchase or sell a security (other than a security
beneficially owned by the covered employee that is issued by
the issuer that employs the covered employee or any affiliate
of the issuer), derivative, or other financial product that
in any way hedges or limits the financial exposure of the
covered employee to declines in the market value of any
security beneficially owned by the covered employee that is
issued by the issuer that employs the covered employee or any
affiliate of the issuer; or
``(B) enter into an agreement with any third party in which
a security issued by the issuer that employs the covered
employee is a material term of the agreement, if the
agreement in any way hedges or limits the financial exposure
of the covered employee to declines in the market value of
any security beneficially owned by the covered employee that
is issued by the issuer that employs the covered employee or
any affiliate of the issuer.''.
______

SA 3819. Mr. BROWN of Ohio 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:

On page 191, after line 24, insert the following new
subparagraphs after subparagraph (B) and redesignate the
subsequent subparagraphs:
(C) Wages, salaries, or commissions, including vacation,
severance, and sick leave pay earned by an individual (other
than management responsible for the failed condition of the
covered financial company who have been removed), but only to
the extent of $11,725 for each individual (as indexed for
inflation by regulation of the Corporation) earned within 180
days before the appointment of the Corporation as receiver.
(D) Contributions owed to employee benefit plans arising
from services rendered within 180 days before the appointment
of the Corporation as receiver to the extent of the number of
employees covered by each such plan multiplied by $11,725 (as
indexed for inflation by regulation of the Corporation), less
the aggregate amount paid to such employees under
subparagraph (C) plus the aggregate amount paid by the
receivership on behalf of such employees to any other
employee benefit plan.
______

SA 3820. Mr. BROWN of Ohio 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:

On page 235, between lines 13 and 14, insert the following
new subparagraph after subparagraph (C) and redesignate the
subsequent subparagraph:
(D) Services performed under a collective bargain agreement
after appointment and prior to repudiation.--If, in the case
of any collective bargaining agreement between a labor
organization and a covered financial company, the Corporation
as receiver accepts performance of services subject to such
agreement before making any determination to exercise the
right of repudiation of such collective bargaining agreement
under this section--
(i) the persons covered by such collective bargaining
agreement shall be paid under the terms of such agreement for
the services performed; and
(ii) the amount of such payment shall be treated as an
administrative expense of the receivership.
______

SA 3821. Mr. BROWN of Ohio 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:

On page 1044, between lines 2 and 3, insert the following:

SEC. 939D. EFFECT OF RULE 436(G).

Section 220.436(g) of title 17, Code of Federal
Regulations, commonly referred to as ``Rule 436(g) under the
Securities Act of 1933'', shall have no force or effect.
______

SA 3822. Mr. DODD (for himself and Mr. Shelby) 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:

On page 111, line 7, insert ``(a) In General.--'' before
``In''.
On page 114, line 14, after ``(iii)'' insert ``that is
predominantly engaged in activities that the Board of
Governors has determined are financial in nature or
incidental thereto for purposes of section 4(k) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1843(k))''.
On page 114, line 21, after ``(12 U.S.C. 2001 et seq.)''
insert ``, a governmental entity, or a regulated entity, as
defined under section 1303 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C.
4502(20))''.
On page 115, strike lines 18 through 20, and insert the
following:
(15) Court.--The term ``Court'' means the United States
District Court for the District of Columbia.
On page 115, between lines 22 and 23, insert the following:
(b) Definitional Criteria.--For purpose of the definition
of the term ``financial company'' under subsection (a)(10),
no company shall be deemed to be predominantly engaged in
activities that the Board of Governors has determined are
financial in nature or incidental thereto for purposes of
section 4(k) of the Bank Holding Company Act of 1956 (12
U.S.C. 1843(k)), if the consolidated revenues of such company
from such activities constitute less than 85 percent of the
total consolidated revenues of such company, as the
Corporation, in consultation with the Secretary, shall
establish by regulation. In determining whether a company is
a financial company under this title, the consolidated
revenues derived from the ownership or control of a
depository institution shall be included.
On page 115, line 23, strike ``ORDERLY LIQUIDATION
AUTHORITY PANEL'' and insert ``JUDICIAL REVIEW''.
On page 115, strike line 24 and all that follows through
page 116, line 16.
On page 116, line 17, strike ``(b)'' and insert ``(a)''.
On page 116, strike lines 18 through 20, and insert the
following:
(1) Petition to district court.--
(A) District court review.--
On page 116, strike line 21 and all that follows through
page 117, line 4, and insert the following:
(i) Petition to district court.--Subsequent to a
determination by the Secretary under section 203 that a
financial company satisfies the criteria in section 203(b),
the Secretary shall notify the Corporation and

[[Page S3196]]

the covered financial company. If the board of directors (or
body performing similar functions) of the covered financial
company acquiesces or consents to the appointment of the
Corporation as a receiver, the Secretary shall appoint the
Corporation as a receiver. If the board of directors (or body
performing similar functions) of the covered financial
company does not acquiesce or consent to the appointment of
the Corporation as receiver, the Secretary shall petition the
United States District Court for the District of Columbia for
an order authorizing the Secretary to appoint the Corporation
as a receiver.
On page 117, line 9, strike ``Panel'' and insert ``Court''.
On page 117, line 13, strike ``Panel'' and insert
``Court''.
On page 117, beginning on line 16, strike ``, within 24
hours of receipt of the petition filed by the Secretary,''.
On page 117, line 21, strike ``is supported'' and all that
follows through line 22, and insert ``and satisfies the
definition of a financial company under section 201(10) is
arbitrary and capricious.''.
On page 117, line 24, strike ``Panel'' and insert
``Court''.
On page 118, line 2, insert ``and satisfies the definition
of a financial company under section 201(10)'' after ``danger
of default''.
On page 118, lines 3 and 4, strike ``is supported by
substantial evidence'' and insert ``is not arbitrary and
capricious''.
On page 118, line 4, strike ``Panel'' and insert ``Court''.
On page 118, lines 9 and 10, strike ``is not supported by
substantial evidence'' and insert ``is arbitrary and
capricious''.
On page 118, line 10, strike ``Panel'' and insert
``Court''.
On page 118, between lines 16 and 17, insert the following:
(v) Petition granted by operation of law.--If the Court
does not make a determination within 24 hours of receipt of
the petition--

(I) the petition shall be granted by operation of law;
(II) the Secretary shall appoint the Corporation as
receiver; and
(III) liquidation under this title shall automatically and
without further notice or action be commenced and the
Corporation may immediately take all actions authorized under
this title.

On page 118, line 18, strike ``Panel'' and insert
``Court''.
On page 118, line 23, strike ``Panel'' and insert
``Court''.
On page 119, line 1, strike ``Panel'' and insert ``Court''.
On page 119, line 12, strike ``panel'' and insert
``district court''.
On page 119, line 16, strike ``Third Circuit'' and insert
``District of Columbia Circuit''.
On page 119, line 17, strike ``Panel'' and insert
``Court''.
On page 119, line 23, strike ``Panel'' and insert
``Court''.
On page 120, strike lines 16 through 17 and insert
``default and satisfies the definition of a financial company
under section 201(10) is arbitrary and capricious.''.
On page 121, lines 19 and 20, strike ``is supported by
substantial evidence'' and insert ``and satisfies the
definition of a financial company under section 201(10) is
arbitrary and capricious''.
On page 121, line 21, strike ``(c)'' and insert ``(b)''.
On page 121, line 24, strike ``Panel'' and insert
``Court''.
On page 122, line 5, strike ``subsection (b)(1)'' and all
that follows through line 9, and insert ``subsection
(a)(1).''.
On page 122, strike lines 14 through 16.
On page 122, line 17, strike ``(C)'' and insert ``(A)''.
On page 122, line 19, strike ``(D)'' and insert ``(B)''.
On page 122, line 21, strike ``(E)'' and insert ``(C)''.
On page 122, line 23, strike ``(F)'' and insert ``(D)''.
On page 123, line 1, strike ``(d)'' and insert ``(c)''.
On page 123, between lines 14 and 15, insert the following:
(d) Time Limit on Receivership Authority.--
(1) Baseline period.--Any appointment of the Corporation as
receiver under this section shall terminate at the end of the
3-year period beginning on the date on which such appointment
is made.
(2) Extension of time limit.--The time limit established in
paragraph (1) may be extended by the Corporation for up to 1
additional year, if the Chairperson of the Corporation
determines and certifies in writing to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives that continuation of the receivership is
necessary--
(A) to--
(i) maximize the net present value return from the sale or
other disposition of the assets of the covered financial
company; or
(ii) minimize the amount of loss realized upon the sale or
other disposition of the assets of the covered financial
company; and
(B) to protect the stability of the financial system of the
United States.
(3) Second extension of time limit.--
(A) In general.--The time limit under this subsection, as
extended under paragraph (2), may be extended for up to 1
additional year, if the Chairperson of the Corporation, with
the concurrence of the Secretary, submits the certifications
described in paragraph (2).
(B) Additional report required.--Not later than 30 days
after the date of commencement of the extension under
subparagraph (A), the Corporation shall submit a report to
the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives describing the need for the extension and
the specific plan of the Corporation to conclude the
receivership before the end of the second extension.
(4) Ongoing litigation.--The time limit under this
subsection, as extended under paragraph (3), may be further
extended solely for the purpose of completing ongoing
litigation in which the Corporation as receiver is a party,
provided that the appointment of the Corporation as receiver
shall terminate not later than 90 days after the date of
completion of such litigation, if--
(A) the Council determines that the Corporation used its
best efforts to conclude the receivership in accordance with
its plan before the end of the time limit described in
paragraph (3);
(B) the Council determines that the completion of longer-
term responsibilities in the form of ongoing litigation
justifies the need for an extension; and
(C) the Corporation submits a report approved by the
Council not later than 30 days after the date of the
determinations by the Council under subparagraphs (A) and (B)
to the Committee on Banking, Housing, and Urban Affairs of
the Senate and the Committee on Financial Services of the
House of Representatives, describing--
(i) the ongoing litigation justifying the need for an
extension; and
(ii) the specific plan of the Corporation to complete the
litigation and conclude the receivership.
(5) Regulations.--The Corporation may issue regulations
governing the termination of receiverships under this title.
(6) No liability.--The Corporation and the Deposit
Insurance Fund shall not be liable for unresolved claims
arising from the receivership after the termination of the
receivership.
On page 123, line 21, strike ``Panel'' and insert
``Court''.
On page 124, line 11, strike ``Panel'' and insert
``Court''.
On page 126, between lines 9 and 10, insert the following:
(g) Study of Prompt Corrective Action Implementation by the
Appropriate Federal Agencies.--
(1) Study.--The Comptroller General of the United States
shall conduct a study regarding the implementation of prompt
corrective action by the appropriate Federal banking
agencies.
(2) Issues to be studied.--In conducting the study under
paragraph (1), the Comptroller General shall evaluate--
(A) the effectiveness of implementation of prompt
corrective action by the appropriate Federal banking agencies
and the resolution of insured depository institutions by the
Corporation; and
(B) ways to make prompt corrective action a more effective
tool to resolve the insured depository institutions at the
least possible long-term cost to the Deposit Insurance Fund.
(3) Report to council.--Not later than 1 years after the
date of enactment of this Act, the Comptroller General shall
submit a report to the Council on the results of the study
conducted under this subsection.
(4) Council report of action.--Not later than 6 months
after the date of receipt of the report from the Comptroller
General under paragraph (3), the Council shall submit a
report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives on actions taken in response
to the report, including any recommendations made to the
Federal primary financial regulatory agencies under section
120.
On page 128, line 9, strike ``and''.
On page 128, line 12, strike the period at the end and
insert ``; and''.
On page 128, between lines 12 and 13, insert the following:
(G) an evaluation of whether the company satisfies the
definition of a financial company under section 201.
On page 128, line 16, strike ``202(b)(1)(A)'' and insert
``202(a)(1)(A)''.
On page 129, line 17, strike ``and''.
On page 129, line 21, strike the period at the end and
insert ``; and''.
On page 129, between lines 21 and 22, insert the following:
(7) the company satisfies the definition of a financial
company under section 201.
On page 132, strike lines 3 through 17, and insert the
following:
(A) In general.--Not later than 60 days after the date of
appointment of the Corporation as receiver for a covered
financial company, the Corporation shall file a report with
the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives--
(i) setting forth information on the financial condition of
the covered financial company as of the date of the
appointment, including a description of its assets and
liabilities;
(ii) describing the plan of, and actions taken by, the
Corporation to wind down the covered financial company;

[[Page S3197]]

(iii) explaining each instance in which the Corporation
waived any applicable requirements of part 366 of title 12,
Code of Federal Regulations (or any successor thereto) with
respect to conflicts of interest by any person in the private
sector who was retained to provide services to the
Corporation in connection with such receivership;
(iv) describing the reasons for the provision of any
funding to the receivership out of the Fund;
(v) setting forth the expected costs of the orderly
liquidation of the covered financial company;
(vi) setting forth the identity of any claimant that is
treated in a manner different from other similarly situated
claimants under subsection (b)(4), (d)(4), or (h)(5)(E), the
amount of any additional payment to such claimant under
subsection (d)(4), and the reason for any such action; and
(vii) which report the Corporation shall publish on an
online website maintained by the Corporation, subject to
maintaining appropriate confidentiality.
On page 132, between lines 22 and 23, insert the following:
(C) Congressional testimony.--The Corporation and the
primary financial regulatory agency, if any, of the financial
company for which the Corporation was appointed receiver
under this title shall appear before Congress, if requested,
not later than 30 days after the date on which the
Corporation first files the reports required under
subparagraph (A).
On page 135, line 15, strike ``section 202(b)'' and insert
``section 202(a)''.
On page 136, line 9, strike ``with the strong presumption''
and insert ``so''.
On page 138, line 16, insert after the period the
following: ``All funds provided by the Corporation under this
subsection shall have a priority of claims under subparagraph
(A) or (B) of section 210(b)(1), as applicable, including
funds used for--
``(1) making loans to, or purchasing any debt obligation
of, the covered financial company or any covered subsidiary;
``(2) purchasing or guaranteeing against loss the assets of
the covered financial company or any covered subsidiary,
directly or through an entity established by the Corporation
for such purpose;
``(3) assuming or guaranteeing the obligations of the
covered financial company or any covered subsidiary to 1 or
more third parties;
``(4) taking a lien on any or all assets of the covered
financial company or any covered subsidiary, including a
first priority lien on all unencumbered assets of the covered
financial company or any covered subsidiary to secure
repayment of any transactions conducted under this
subsection;
``(5) selling or transferring all, or any part, of such
acquired assets, liabilities, or obligations of the covered
financial company or any covered subsidiary; and
``(6) making payments pursuant to subsections (b)(4),
(d)(4), and (h)(5)(E) of section 210.''.
On page 138, line 15, strike ``section 210(n)(13)'' and
insert ``section 210(n)(11)''.
On page 147, line 3, insert before the period the
following: ``, and address the potential for conflicts of
interest between or among individual receiverships
established under this title or under the Federal Deposit
Insurance Act''.
On page 187, line 18, strike ``(B), and (C)'' and insert
``(B), (C), and (D)''.
On page 187, line 20, strike ``(D)'' and insert ``(E)''.
On page 192, insert before line 1 the following:
(C) Wages, salaries, or commissions, including vacation,
severance, and sick leave pay earned by an individual (other
than an individual described in subparagraph (G)), but only
to the extent of $11,725 for each individual (as indexed for
inflation, by regulation of the Corporation) earned not later
than 180 days before the date of appointment of the
Corporation as receiver.
(D) Contributions owed to employee benefit plans arising
from services rendered not later than 180 days before the
date of appointment of the Corporation as receiver, to the
extent of the number of employees covered by each such plan,
multiplied by $11,725 (as indexed for inflation, by
regulation of the Corporation), less the aggregate amount
paid to such employees under subparagraph (C), plus the
aggregate amount paid by the receivership on behalf of such
employees to any other employee benefit plan.
On page 192, line 1, strike ``(C)'' and insert ``(E)''.
On page 192, beginning on line 3, strike ``(D) or (E)'' and
insert ``(F), (G), or (H)''.
On page 192, line 5, strike ``(D)'' and insert ``(F)''.
On page 192, between lines 7 and 8, insert the following:
(G) Any wages, salaries, or commissions including vacation,
severance, and sick leave pay earned, owed to senior
executives and directors of the covered financial company.
On page 192, line 7, strike ``subparagraph (E)).'' and
insert ``subparagraph (G) or (H)).''.
On page 192, line 8, strike ``(E)'' and insert ``(H)''.
On page 193, line 18, strike ``(ii)'' and insert the
following:
``(ii) to initiate and continue operations essential to
implementation of the receivership or any bridge financial
company;
``(iii)''.
On page 228, line 17, strike ``5th'' and insert ``3rd''.
On page 236, line 20, strike ``5th'' and insert ``3rd''.
On page 237, line 14, strike ``5th'' and insert ``3rd''.
On page 240, line 8, strike ``section 202(c)(1)'' and
insert ``section 202(a)(1)''.
On page 246, strike line 21 and all the follows through
page 247, line 5, and insert the following:
(B) Limitations.--
(i) Prohibition.--The Corporation shall not make any
payments or credit amounts to any claimant or category of
claimants that would result in any claimant receiving more
than the face value amount of any claim that is proven to the
satisfaction of the Corporation.
(ii) No obligation.--Notwithstanding any other provision of
Federal or State law, or the Constitution of any State, the
Corporation shall not be obligated, as a result of having
made any payment under subparagraph (A) or credited any
amount described in subparagraph (A) to or with respect to,
or for the account, of any claimant or category of claimants,
to make payments to any other claimant or category of
claimants.
On page 254, line 24, strike ``(13)'' and insert ``(11)''.
On page 260, line 4, strike ``subsection (o)(1)(E)(ii))''
and insert ``subsection (o)(1)(D)(ii))''.
On page 263, line 16, strike ``(13)'' and insert ``(11)''.
On page 278, line 5, strike ``(9)'' and insert ``(6)''.
On page 278, line 10, strike ``(9)'' and insert ``(6)''.
On page 278, strike line 18 and all that follows through
page 279, line 20.
On page 279, line 21, strike ``(8)'' and insert ``(4)''.
On page 280, line 5, strike ``(9)'' and insert ``(5)''.
On page 281, line 6, strike the period and insert the
following: ``, plus an interest rate surcharge to be
determined by the Secretary, which shall be greater than the
difference between--
``(i) the current average rate on an index of corporate
obligations of comparable maturity; and
``(ii) the current average rate on outstanding marketable
obligations of the United States of comparable maturity.''.
On page 281, strike line 20 and all that follows through
page 282, line 8, and insert the following:
(6) Maximum obligation limitation.--The Corporation may
not, in connection with the orderly liquidation of a covered
financial company, issue or incur any obligation, if, after
issuing or incurring the obligation, the aggregate amount of
such obligations outstanding under this subsection for each
covered financial company would exceed--
(A) an amount that is equal to 10 percent of the total
consolidated assets of the covered financial company, based
on the most recent financial statement available, during the
30-day period immediately following the date of appointment
of the Corporation as receiver (or a shorter time period if
the Corporation has calculated the amount described under
subparagraph (B)); and
(B) the amount that is equal to 90 percent of the fair
value of the total consolidated assets of each covered
financial company that are available for repayment, after the
time period described in subparagraph (A).
On page 282, line 9, strike ``(11)'' and insert ``(7)''.
On page 282, strike lines 14 through 19.
On page 282, line 20, strike ``(13)'' and insert ``(8)''.
On page 283, strike lines 5 through 14 and insert the
following:
(i) the authorities of the Corporation contained in this
title shall not be used to assist the Deposit Insurance Fund
or to assist any financial company under applicable law other
than this Act;
(ii) the authorities of the Corporation relating to the
Deposit Insurance Fund, or any other responsibilities of the
Corporation under applicable law other than this title, shall
not be used to assist a covered financial company pursuant to
this title; and
(iii) the Deposit Insurance Fund may not be used in any
manner to otherwise circumvent the purposes of this title.
On page 283, line 24, strike ``(14)'' and insert ``(9)''.
On page 284, line 6, insert ``, including taking any
actions specified'' before ``under 204(d)''.
On page 284, line 7, insert before the period ``, and
payments to third parties''.
On page 284, between lines 10 and 11, insert the following:
(10) Implementation expenses.--
(A) In general.--Reasonable implementation expenses of the
Corporation incurred after the date of enactment of this Act
shall be treated as expenses of the Council.
(B) Requests for reimbursement.--The Corporation shall
periodically submit a request for reimbursement for
implementation expenses to the Chairperson of the Council,
who shall arrange for prompt reimbursement to the Corporation
of reasonable implementation expenses.
(C) Definition.--As used in this paragraph, the term
``implementation expenses''--
(i) means costs incurred by the Corporation beginning on
the date of enactment of this Act, as part of its efforts to
implement this title that do not relate to a particular
covered financial company; and
(ii) includes the costs incurred in connection with the
development of policies, procedures, rules, and regulations
and other planning activities of the Corporation consistent
with carrying out this title.

[[Page S3198]]

On page 284, strike line 13 and all that follows through
page 285, line 2.
On page 285, line 3, strike ``(B)'' and insert ``(A)''.
On page 285, line 10, strike ``(C)'' and insert ``(B)''.
On page 285, line 10, strike ``Additional''.
On page 285, line 13, strike ``(E)'' and insert ``(D)''.
On page 285, strike lines 14 through 23.
On page 285, line 24, strike ``(iii)''.
On page 285, line 21, strike ``during the initial
capitalization period''.
On page 286, strike line 11 and all that follows through
page 287, line 2, and insert the following:
(D) Application of assessments.--To meet the requirements
of subparagraph (C), the Corporation shall--
(i) impose assessments, as soon as practicable, on any
claimant that received additional payments or amounts from
the Corporation pursuant to subsection (b)(4), (d)(4), or
(h)(5)(E), except for payments or amounts necessary to
initiate and continue operations essential to implementation
of the receivership or any bridge financial company, to
recover on a cumulative basis, the entire difference
between--

(I) the aggregate value the claimant received from the
Corporation on a claim pursuant to this title (including
pursuant to subsection (b)(4), (d)(4), and (h)(5)(E)), as of
the date on which such value was received; and
(II) the value the claimant was entitled to receive from
the Corporation on such claim solely from the proceeds of the
liquidation of the covered financial company under this
title; and

(ii) if the amounts to be recovered on a cumulative basis
under clause (i) are insufficient to meet the requirements of
subparagraph (C), after taking into account the
considerations set forth in paragraph (4), impose assessments
on--

(I) eligible financial companies; and
(II) financial companies with total consolidated assets
equal to or greater than $50,000,000,000 that are not
eligible financial companies.

(E) Provision of financing.--Payments or amounts necessary
to initiate and continue operations essential to
implementation of the receivership or any bridge financial
company described in subparagraph (E)(i) shall not include
the provision of financing, as defined by rule of the
Corporation, to third parties.
On page 287, strike lines 3 through 10.
On page 289, strike line 25, and insert ``the Corporation,
in consultation with the Secretary, deems appropriate.''.
On page 290, beginning on line 9, strike ``, in
consultation with the Secretary and the Council,''.
On page 290, line 11, insert after the period the
following: ``The Corporation shall consult with the Secretary
in the development and finalization of such regulations.''.
On page 295, between lines 19 and 20, insert the following:
(s) Recoupment of Compensation From Senior Executives and
Directors.--
(1) In general.--The Corporation, as receiver of a covered
financial company, may recover from any current or former
senior executive or director substantially responsible for
the failed condition of the covered financial company any
compensation received during the 2-year period preceding the
date on which the Corporation was appointed as the receiver
of the covered financial company, except that, in the case of
fraud, no time limit shall apply.
(2) Cost considerations.--In seeking to recover any such
compensation, the Corporation shall weigh the financial and
deterrent benefits of such recovery against the cost of
executing the recovery.
(3) Rulemaking.--The Corporation shall promulgate
regulations to implement the requirements of this subsection,
including defining the term ``compensation'' to mean any
financial remuneration, including salary, bonuses,
incentives, benefits, severance, deferred compensation, or
golden parachute benefits, and any profits realized from the
sale of the securities of the covered financial company.
On page 296, between lines 15 and 16, insert the following:
(d) FDIC Inspector General Reviews.--
(1) Scope.--The Inspector General of the Corporation shall
conduct, supervise, and coordinate audits and investigations
of the liquidation of any covered financial company by the
Corporation as receiver under this title, including
collecting and summarizing--
(A) a description of actions taken by the Corporation as
receiver;
(B) a description of any material sales, transfers,
mergers, obligations, purchases, and other material
transactions entered into by the Corporation;
(C) an evaluation of the adequacy of the policies and
procedures of the Corporation under section 203(d) and
orderly liquidation plan under section 210(n)(14);
(D) an evaluation of the utilization by the Corporation of
the private sector in carrying out its functions, including
the adequacy of any conflict-of-interest reviews; and
(E) an evaluation of the overall performance of the
Corporation in liquidating the covered financial company,
including administrative costs, timeliness of liquidation
process, and impact on the financial system.
(2) Frequency.--Not later than 6 months after the date of
appointment of the Corporation as receiver under this title
and every 6 months thereafter, the Inspector General of the
Corporation shall conduct the audit and investigation
described in paragraph (1).
(3) Reports and testimony.--The Inspector General of the
Corporation shall include in the semiannual reports required
by section 5(a) of the Inspector General Act of 1978 (5
U.S.C. App.), a summary of the findings and evaluations under
paragraph (1), and shall appear before the appropriate
committees of Congress, if requested, to present each such
report.
(4) Funding.--
(A) Initial funding.--The expenses of the Inspector General
of the Corporation in carrying out this subsection shall be
considered administrative expenses of the receivership.
(B) Additional funding.--If the maximum amount available to
the Corporation as receiver under this title is insufficient
to enable the Inspector General of the Corporation to carry
out the duties under this subsection, the Corporation shall
pay such additional amounts from assessments imposed under
section 210.
(5) Termination of responsibilities.--The duties and
responsibilities of the Inspector General of the Corporation
under this subsection shall terminate 1 year after the date
of termination of the receivership under this title.
(e) Treasury Inspector General Reviews.--
(1) Scope.--The Inspector General of the Department of the
Treasury shall conduct, supervise, and coordinate audits and
investigations of actions taken by the Secretary related to
the liquidation of any covered financial company under this
title, including collecting and summarizing--
(A) a description of actions taken by the Secretary under
this title;
(B) an analysis of the approval by the Secretary of the
policies and procedures of the Corporation under section 203
and acceptance of the orderly liquidation plan of the
Corporation under section 210; and
(C) an assessment of the terms and conditions underlying
the purchase by the Secretary of obligations of the
Corporation under section 210.
(2) Frequency.--Not later than 6 months after the date of
appointment of the Corporation as receiver under this title
and every 6 months thereafter, the Inspector General of the
Department of the Treasury shall conduct the audit and
investigation described in paragraph (1).
(3) Reports and testimony.--The Inspector General of the
Department of the Treasury shall include in the semiannual
reports required by section 5(a) of the Inspector General Act
of 1978 (5 U.S.C. App.), a summary of the findings and
assessments under paragraph (1), and shall appear before the
appropriate committees of Congress, if requested, to present
each such report.
(4) Termination of responsibilities.--The duties and
responsibilities of the Inspector General of the Department
of the Treasury under this subsection shall terminate 1 year
after the date on which the obligations purchased by the
Secretary from the Corporation under section 210 are fully
redeemed.
(f) Primary Financial Regulatory Agency Inspector General
Reviews.--
(1) Scope.--Upon the appointment of the Corporation as
receiver for a covered financial company supervised by a
Federal primary financial regulatory agency or the Board of
Governors under section 165, the Inspector General of the
agency or the Board of Governors shall make a written report
reviewing the supervision by the agency or the Board of
Governors of the covered financial company, which shall--
(A) evaluate the effectiveness of the agency or the Board
of Governors in carrying out its supervisory responsibilities
with respect to the covered financial company;
(B) identify any acts or omissions on the part of agency or
Board of Governors officials that contributed to the covered
financial company being in default or in danger of default;
(C) identify any actions that could have been taken by the
agency or the Board of Governors that would have prevented
the company from being in default or in danger of default;
and
(D) recommend appropriate administrative or legislative
action.
(2) Reports and testimony.--Not later than 1 year after the
date of appointment of the Corporation as receiver under this
title, the Inspector General of the Federal primary financial
regulatory agency or the Board of Governors shall provide the
report required by paragraph (1) to such agency or the Board
of Governors, and along with such agency or the Board of
Governors, as applicable, shall appear before the appropriate
committees of Congress, if requested, to present the report
required by paragraph (1). Not later than 90 days after the
date of receipt of the report required by paragraph (1), such
agency or the Board of Governors, as applicable, shall
provide a written report to Congress describing any actions
taken in response to the recommendations in the report, and
if no such actions were taken, describing the reasons why no
actions were taken.

SEC. 212. PROHIBITION OF CIRCUMVENTION AND PREVENTION OF
CONFLICTS OF INTEREST.

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

[[Page S3199]]

(c) Conflict of Interest.--In the event that the
Corporation is appointed receiver for more than 1 covered
financial company or is appointed receiver for a covered
financial company and receiver for any insured depository
institution that is an affiliate of such covered financial
company, the Corporation shall take appropriate action, as
necessary to avoid any conflicts of interest that may arise
in connection with multiple receiverships.

SEC. 213. BAN ON SENIOR EXECUTIVES AND DIRECTORS.

(a) Prohibition Authority.--The Board of Governors or, if
the covered financial company was not supervised by the Board
of Governors, the Corporation, may exercise the authority
provided by this section.
(b) Authority To Issue Order.--The appropriate agency
described in subsection (a) may take any action authorized by
subsection (c), if the agency determines that--
(1) a senior executive or a director of the covered
financial company, prior to the appointment of the
Corporation as receiver, has, directly or indirectly--
(A) violated--
(i) any law or regulation;
(ii) any cease-and-desist order which has become final;
(iii) any condition imposed in writing by a Federal agency
in connection with any action on any application, notice, or
request by such company or senior executive; or
(iv) any written agreement between such company and such
agency;
(B) engaged or participated in any unsafe or unsound
practice in connection with any financial company; or
(C) committed or engaged in any act, omission, or practice
which constitutes a breach of the fiduciary duty of such
senior executive or director;
(2) by reason of the violation, practice, or breach
described in any clause of paragraph (1), such senior
executive or director has received financial gain or other
benefit by reason of such violation, practice, or breach and
such violation, practice, or breach contributed to the
failure of the company; and
(3) such violation, practice, or breach--
(A) involves personal dishonesty on the part of such senior
executive or director; or
(B) demonstrates willful or continuing disregard by such
senior executive or director for the safety or soundness of
such company.
(c) Authorized Actions.--
(1) In general.--The appropriate agency for a financial
company, as described in subsection (a), may serve upon a
senior executive or director described in subsection (b) a
written notice of the intention of the agency to prohibit any
further participation by such person, in any manner, in the
conduct of the affairs of any financial company for a period
of time determined by the appropriate agency to be
commensurate with such violation, practice, or breach,
provided such period shall be not less than 2 years.
(2) Procedures.--The due process requirements and other
procedures under section 8(e) of the Federal Deposit
Insurance Act shall apply to actions under this section as if
the covered financial company were an insured depository
institution and the senior executive or director were an
institution-affiliated party, as those terms are defined in
that Act.
(d) Regulations.--The Corporation and the Board of
Governors, in consultation with the Council, shall jointly
prescribe rules or regulations to administer and carry out
this section, including rules, regulations, or guidelines to
further define the term senior executive for the purposes of
this section.
On page 1522, line 11, strike ``The third'' and insert the
following:
``(a) Federal Reserve Act.--The third''.
On page 1528, line 3, strike the end quotation marks and
the final period and insert the following:
``(E) If an entity to which a Federal reserve bank has
provided a loan under this paragraph becomes a covered
financial company, as defined in section 203 of the Restoring
American Financial Stability Act of 2010, at any time while
such loan is outstanding, and the Federal reserve bank incurs
a realized net loss on the loan, then the Federal reserve
bank shall have a claim equal to the amount of the net
realized loss against the covered entity, with the same
priority as an obligation to the Secretary of the Treasury
under sections 210(n) and 210(o) of the Restoring American
Financial Stability Act of 2010.''.
(b) Conforming Amendment.--Section 507(a)(2) of title 11,
United States Code, is amended by inserting ``claims of any
Federal reserve bank related to loans made through programs
or facilities authorized under the third undesignated
paragraph of the Federal Reserve Act ( 12 U.S.C. 343),''
after ``this title,''.
On page 1523, line 17, strike ``of sufficient quality'' and
insert ``sufficient''.
On page 1523, line 18, insert after the period the
following: ``The policies and procedures established by the
Board shall require that a Federal reserve bank assign,
consistent with sound risk management practices and to ensure
protection for the taxpayer, a lendable value to all
collateral for a loan executed by a Federal reserve bank
under this paragraph in determining whether the loan is
secured satisfactorily for purposes of this paragraph.''.
On page 1523, line 19, strike ``(ii)'' and insert the
following:
``(ii) The Board shall establish procedures to prohibit
borrowing from programs and facilities by borrowers that are
insolvent. Such procedures may include a certification from
the chief executive officer (or other authorized officer) of
the borrower, at the time the borrower initially borrows
under the program or facility (with a duty by the borrower to
update the certification if the information in the
certification materially changes), that the borrower is not
insolvent. A borrower shall be considered insolvent for
purposes of this subparagraph, if the borrower is in
bankruptcy, resolution under title II of the Restoring
American Financial Stability Act of 2010, or any other
Federal or State insolvency proceeding.
``(iii) A program or facility that is structured to remove
assets from the balance sheet of a single and specific
company, or that is established for the purpose of assisting
a single and specific company avoid bankruptcy, resolution
under title II of the Restoring American Financial Stability
Act of 2010, or any other Federal or State insolvency
proceeding, shall not be considered a program or facility
with broad-based eligibility.
``(iv)''.
On page 1523, line 18: insert ``and that any such program
is terminated in a timely and orderly fashion'' before
``losses''.
On page 1524, line 11, strike ``assistance,'' and all that
follows through line 12 and insert ``assistance.''.
On page 1525, strike line 21 and all that follows through
page 1528, line 3, and insert the following:
``(D) The information submitted to Congress under
subparagraph (C) related to--
``(i) the identity of the participants in an emergency
lending program or facility commenced under this paragraph;
``(ii) the amounts borrowed by each participant in any such
program or facility;
``(iii) identifying details concerning the assets or
collateral held by, under, or in connection with such a
program or facility,
shall be kept confidential, upon the written request of the
Chairman of the Board, in which case such information shall
be made available only to the Chairpersons and Ranking
Members of the Committees described in subparagraph (C).''.
On page 1537, line 23, insert before the period the
following: ``and a request for approval of such plan''.
On page 1537, line 23, strike ``Upon'' and all that follows
through page 1538, line 6, and insert the following: ``The
Corporation shall exercise the authority under this section
to issue guarantees up to that specified maximum amount upon
passage of the joint resolution of approval, as provided in
subsection (d). Absent such approval, the Corporation shall
issue no such guarantees.''.

On page 1538, line 16, strike ``Upon'' and all that follows
through page 1547, line 6 and insert the following: ``The
Corporation shall exercise the authority under this section
to issue guarantees up to that specified maximum amount upon
passage of the joint resolution of approval, as provided in
subsection (d). Absent such approval, the Corporation shall
issue no such guarantees.
``(d) Resolution of Approval.--
``(1) Additional debt guarantee authority.--A request by
the President under this section shall be considered granted
by Congress upon adoption of a joint resolution approving
such request. Such joint resolution shall be considered in
the Senate under expedited procedures.
``(2) Fast track consideration in senate.--
``(A) Reconvening.--Upon receipt of a request under
subsection (c), if the Senate has adjourned or recessed for
more than 2 days, the majority leader of the Senate, after
consultation with the minority leader of the Senate, shall
notify the Members of the Senate that, pursuant to this
section, the Senate shall convene not later than the second
calendar day after receipt of such message.
``(B) Placement on calendar.--Upon introduction in the
Senate, the joint resolution shall be placed immediately on
the calendar.
``(C) Floor consideration.--
``(i) In general.--Notwithstanding Rule XXII of the
Standing Rules of the Senate, it is in order at any time
during the period beginning on the 4th day after the date on
which Congress receives a request under subsection (c), and
ending on the 7th day after that date (even though a previous
motion to the same effect has been disagreed to) to move to
proceed to the consideration of the joint resolution, and all
points of order against the joint resolution (and against
consideration of the joint resolution) are waived. The motion
to proceed is not debatable. The motion is not subject to a
motion to postpone. A motion to reconsider the vote by which
the motion is agreed to or disagreed to shall not be in
order. If a motion to proceed to the consideration of the
resolution is agreed to, the joint resolution shall remain
the unfinished business until disposed of.
``(ii) Debate.--Debate on the joint resolution, and on all
debatable motions and appeals in connection therewith, shall
be limited to not more than 10 hours, which shall be divided
equally between the majority and minority leaders or their
designees. A motion further to limit debate is in order and
not debatable. An amendment to, or a motion to postpone, or a
motion to proceed to the consideration of other business, or
a motion to recommit the joint resolution is not in order.
``(iii) Vote on passage.--The vote on passage shall occur
immediately following the

[[Page S3200]]

conclusion of the debate on the joint resolution, and a
single quorum call at the conclusion of the debate if
requested in accordance with the rules of the Senate.
``(iv) Rulings of the chair on procedure.--Appeals from the
decisions of the Chair relating to the application of the
rules of the Senate, as the case may be, to the procedure
relating to a joint resolution shall be decided without
debate.
``(3) Rules.--
``(A) Coordination with action by house of
representatives.--If, before the passage by the Senate of a
joint resolution of the Senate, the Senate receives a joint
resolution, from the House of Representatives, then the
following procedures shall apply:
``(i) The joint resolution of the House of Representatives
shall not be referred to a committee.
``(ii) With respect to a joint resolution of the Senate--

``(I) the procedure in the Senate shall be the same as if
no joint resolution had been received from the other House;
but
``(II) the vote on passage shall be on the joint resolution
of the House of Representatives.

``(B) Treatment of joint resolution of house of
representatives.--If the Senate fails to introduce or
consider a joint resolution under this section, the joint
resolution of the House of Representatives shall be entitled
to expedited floor procedures under this subsection.
``(C) Treatment of companion measures.--If, following
passage of the joint resolution in the Senate, the Senate
then receives the companion measure from the House of
Representatives, the companion measure shall not be
debatable.
``(D) Rules of the senate.--This subsection is enacted by
Congress--
``(i) as an exercise of the rulemaking power of the Senate,
and as such it is deemed a part of the rules of the Senate,
but applicable only with respect to the procedure to be
followed in the Senate in the case of a joint resolution, and
it supersedes other rules, only to the extent that it is
inconsistent with such rules; and
``(ii) with full recognition of the constitutional right of
the Senate to change the rules (so far as relating to the
procedure of the Senate) at any time, in the same manner, and
to the same extent as in the case of any other rule of the
Senate.
``(4) Definition.--As used in this subsection, the term
`joint resolution' means only a joint resolution--
``(A) that is introduced not later than 3 calendar days
after the date on which the request referred to in subsection
(c) is received by Congress;
``(B) that does not have a preamble;
``(C) the title of which is as follows: `Joint resolution
relating to the approval of a plan to guarantee obligations
under section 1155 of the Restoring American Financial
Stability Act of 2010'; and
``(D) the matter after the resolving clause of which is as
follows: `That Congress approves the obligation of any amount
described in section 1155(c) of the Restoring American
Financial Stability Act of 2010.'.''.
On page 1550, strike lines 1 through 12, and insert the
following:
(3) Liquidity event.--The term ``liquidity event'' means--
(A) an exceptional and broad reduction in the general
ability of financial market participants--
(i) to sell financial assets without an unusual and
significant discount; or
(ii) to borrow using financial assets as collateral without
an unusual and significant increase in margin; or
(B) an unusual and significant reduction in the ability of
financial market participants to obtain unsecured credit.
On page 1550, strike line 24 and all that follows through
page 1551, line 3, and insert the following:
(b) Federal Deposit Insurance Act.--Section 13(c)(4)(G) of
the Federal Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G))
is amended--
(1) in clause (i)--
(A) in subclause (I), by inserting ``for which the
Corporation has been appointed receiver'' before ``would have
serious''; and
(B) in the undesignated matter following subclause (II), by
inserting ``for the purpose of winding up the insured
depository institution for which the Corporation has been
appointed receiver'' after ``provide assistance under this
section''; and
(2) in clause (v)(I), by striking ``The'' and inserting
``Not later than 3 days after making a determination under
clause (i), the''.
______

SA 3823. Mr. LEAHY (for himself, Mr. Durbin, Mr. Rockefeller, Mr.
Schumer, Mrs. Feinstein, Mr. Specter, Mr. Whitehouse, Ms. Cantwell, Mr.
Kaufman, Mrs. Gillibrand, Mr. Wyden, Mr. Brown of Ohio, Mr. Lieberman,
Mr. Burris, Mrs. McCaskill, Mr. Franken, Mr. Bennet, Mr. Feingold, Mr.
Lautenberg, Mr. Webb, Mrs. Boxer, and Ms. Landrieu) 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:

At the end of the amendment, insert the following:

SEC. ___. HEALTH INSURANCE INDUSTRY ANTITRUST ENFORCEMENT
ACT.

(a) Short Title.--This section may be cited as the ``Health
Insurance Industry Antitrust Enforcement Act''.
(b) Restoring the Application of Antitrust Laws to Health
Sector Insurers.--
(1) Amendment to mccarran-ferguson act.--Section 3 of the
Act of March 9, 1945 (15 U.S.C. 1013), commonly known as the
McCarran-Ferguson Act, is amended by adding at the end the
following:
``(c) Nothing contained in this Act shall modify, impair,
or supersede the operation of any of the antitrust laws with
respect to the business of health insurance. For purposes of
the preceding sentence, the term `antitrust laws' has the
meaning given it in subsection (a) of the first section of
the Clayton Act, except that such term includes section 5 of
the Federal Trade Commission Act to the extent that such
section 5 applies to unfair methods of competition.''.
(2) Related provision.--For purposes of section 5 of the
Federal Trade Commission Act (15 U.S.C. 45) to the extent
such section applies to unfair methods of competition,
section 3(c) of the McCarran-Ferguson Act shall apply with
respect to the business of health insurance without regard to
whether such business is carried on for profit,
notwithstanding the definition of ``Corporation'' contained
in section 4 of the Federal Trade Commission Act.
______

SA 3824. Mr. SHELBY 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 I and insert the following:

TITLE I--FINANCIAL STABILITY

SEC. 101. SHORT TITLE.

This title may be cited as the ``Financial Stability Act of
2010''.

SEC. 102. DEFINITIONS.

(a) In General.--For purposes of this title, unless the
context otherwise requires, the following definitions shall
apply:
(1) Bank holding company.--The term ``bank holding
company'' has the same meaning as in section 2 of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841). A foreign bank
or company that is treated as a bank holding company for
purposes of the Bank Holding Company Act of 1956, pursuant to
section 8(a) of the International Banking Act of 1978 (12
U.S.C. 3106(a)), shall be treated as a bank holding company
for purposes of this title.
(2) Chairperson.--The term ``Chairperson'' means the
Chairperson of the Council.
(3) Member agency.--The term ``member agency'' means an
agency represented by a voting member of the Council.
(4) Nonbank financial company definitions.--
(A) Foreign nonbank financial company.--The term ``foreign
nonbank financial company'' means a company (other than a
company that is, or is treated in the United States as, a
bank holding company or a subsidiary thereof) that is--
(i) incorporated or organized in a country other than the
United States; and
(ii) substantially engaged in, including through a branch
in the United States, activities in the United States that
are financial in nature (as defined in section 4(k) of the
Bank Holding Company Act of 1956).
(B) U.S. nonbank financial company.--The term ``U.S.
nonbank financial company'' means a company (other than a
bank holding company or a subsidiary thereof, or a Farm
Credit System institution chartered and subject to the
provisions of the Farm Credit Act of 1971 (12 U.S.C. 2001 et.
seq.)) that is--
(i) incorporated or organized under the laws of the United
States or any State; and
(ii) substantially engaged in activities in the United
States that are financial in nature (as defined in section
4(k) of the Bank Holding Company Act of 1956).
(C) Nonbank financial company.--The term ``nonbank
financial company'' means a U.S. nonbank financial company
and a foreign nonbank financial company.
(D) Nonbank financial company supervised by the board of
governors.--The term ``nonbank financial company supervised
by the Board of Governors'' means a nonbank financial company
that the Council has determined under section 113 shall be
supervised by the Board of Governors.
(5) Significant institutions.--The terms ``significant
nonbank financial company'' and ``significant bank holding
company'' have the meanings given those terms by rule of the
Board of Governors.
(b) Definitional Criteria.--The Board of Governors shall
establish, by regulation, the

[[Page S3201]]

criteria to determine whether a company is substantially
engaged in activities in the United States that are financial
in nature (as defined in section 4(k) of the Bank Holding
Company Act of 1956) for purposes of the definitions of the
terms ``U.S. nonbank financial company'' and ``foreign
nonbank financial company'' under subsection (a)(4).
(c) Foreign Nonbank Financial Companies.--For purposes of
the authority of the Board of Governors under this title with
respect to foreign nonbank financial companies, references in
this title to ``company'' or ``subsidiary'' include only the
United States activities and subsidiaries of such foreign
company.

Subtitle A--Financial Stability Oversight Council

SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ESTABLISHED.

(a) Establishment.--Effective on the date of enactment of
this Act, there is established the Financial Stability
Oversight Council.
(b) Membership.--The Council shall consist of the following
members, who shall each have 1 vote on the Council shall be:
(1) The Secretary of the Treasury, who shall serve as
Chairperson of the Council.
(2) The Chairman of the Board of Governors.
(3) The Comptroller of the Currency.
(4) The Director of the Bureau.
(5) The Chairman of the Commission.
(6) The Chairperson of the Corporation.
(7) The Chairperson of the Commodity Futures Trading
Commission.
(8) The Director of the Federal Housing Finance Agency.
(9) An independent member appointed by the President, by
and with the advice and consent of the Senate, having
insurance expertise.
(c) Terms; Vacancy.--
(1) Terms.--The independent member of the Council shall
serve for a term of 6 years.
(2) Vacancy.--Any vacancy on the Council shall be filled in
the manner in which the original appointment was made.
(3) Acting officials may serve.--In the event of a vacancy
in the office of the head of a member agency or department,
and pending the appointment of a successor, or during the
absence or disability of the head of a member agency or
department, the acting head of the member agency or
department shall serve as a member of the Council in the
place of that agency or department head.
(d) Technical and Professional Advisory Committees.--The
Council may appoint such special advisory, technical, or
professional committees as may be useful in carrying out the
functions of the Council, including an advisory committee
consisting of State regulators, and the members of such
committees may be members of the Council, or other persons,
or both.
(e) Meetings.--
(1) Timing.--The Council shall meet at the call of the
Chairperson or a majority of the members then serving, but
not less frequently than quarterly.
(2) Rules for conducting business.--The Council shall adopt
such rules as may be necessary for the conduct of the
business of the Council. Such rules shall be rules of agency
organization, procedure, or practice for purposes of section
553 of title 5, United States Code.
(f) Voting.--Unless otherwise specified, the Council shall
make all decisions that it is authorized or required to make
by a majority vote of the members then serving.
(g) Nonapplicability of FACA.--The Federal Advisory
Committee Act (5 U.S.C. App.) shall not apply to the Council,
or to any special advisory, technical, or professional
committee appointed by the Council, except that, if an
advisory, technical, or professional committee has one or
more members who are not employees of or affiliated with the
United States Government, the Council shall publish a list of
the names of the members of such committee.
(h) Assistance From Federal Agencies.--Any department or
agency of the United States may provide to the Council and
any special advisory, technical, or professional committee
appointed by the Council, such services, funds, facilities,
staff, and other support services as the Council may
determine advisable.
(i) Compensation of Members.--
(1) Federal employee members.--All members of the Council
who are officers or employees of the United States shall
serve without compensation in addition to that received for
their services as officers or employees of the United States.
(2) Compensation for non-federal member.--Section 5314 of
title 5, United States Code, is amended by adding at the end
the following:
``Independent Member of the Financial Stability Oversight
Council (1).''.
(j) Detail of Government Employees.--Any employee of the
Federal Government may be detailed to the Council without
reimbursement, and such detail shall be without interruption
or loss of civil service status or privilege. An employee of
the Federal Government detailed to the Council shall report
to and be subject to oversight by the Council during the
assignment to the Council, and shall be compensated by the
department or agency from which the employee was detailed.

SEC. 112. COUNCIL AUTHORITY.

(a) Purposes and Duties of the Council.--
(1) In general.--The purposes of the Council are--
(A) to identify risks to the financial stability of the
United States that could arise from the material financial
distress or failure of large, interconnected bank holding
companies or nonbank financial companies;
(B) to promote market discipline, by eliminating
expectations on the part of shareholders, creditors, and
counterparties of such companies that the Government will
shield them from losses in the event of failure; and
(C) to respond to emerging threats to the stability of the
United States financial markets.
(2) Duties.--The Council shall, in accordance with this
title--
(A) collect information from member agencies and other
Federal and State financial regulatory agencies to assess
risks to the United States financial system;
(B) monitor the financial services marketplace in order to
identify potential threats to the financial stability of the
United States;
(C) facilitate information sharing and coordination among
the member agencies and other Federal and State agencies
regarding domestic financial services policy development,
rulemaking, examinations, reporting requirements, and
enforcement actions;
(D) recommend to the member agencies general supervisory
priorities and principles reflecting the outcome of
discussions among the member agencies;
(E) identify gaps in regulation that could pose risks to
the financial stability of the United States;
(F) require supervision by the Board of Governors for
nonbank financial companies that may pose risks to the
financial stability of the United States in the event of
their material financial distress or failure, pursuant to
section 113;
(G) make recommendations to the Board of Governors
concerning the establishment of heightened prudential
standards for risk-based capital, leverage, liquidity,
contingent capital, resolution plans and credit exposure
reports, concentration limits, enhanced public disclosures,
and overall risk management for nonbank financial companies
and large, interconnected bank holding companies supervised
by the Board of Governors;
(H) identify systemically important financial market
utilities and payment, clearing, and settlement activities
(as that term is defined in title VIII), and require such
utilities and activities to be subject to standards
established by the Board of Governors;
(I) make recommendations to primary financial regulatory
agencies to apply new or heightened standards and safeguards
for financial activities or practices that could create or
increase risks of significant liquidity, credit, or other
problems spreading among bank holding companies, nonbank
financial companies, and United States financial markets;
(J) make determinations regarding exemptions in title VII,
where necessary;
(K) provide a forum for--
(i) discussion and analysis of emerging market developments
and financial regulatory issues; and
(ii) resolution of jurisdictional disputes among the
members of the Council; and
(L) annually report to and testify before Congress on--
(i) the activities of the Council;
(ii) significant financial market developments and
potential emerging threats to the financial stability of the
United States;
(iii) all determinations made under section 113 or title
VIII, and the basis for such determinations; and
(iv) recommendations--

(I) to enhance the integrity, efficiency, competitiveness,
and stability of United States financial markets;
(II) to promote market discipline; and
(III) to maintain investor confidence.

(b) Authority To Obtain Information.--
(1) In general.--The Council may receive, and may request
the submission of, any data or information from member
agencies, as necessary to monitor the financial services
marketplace to identify potential risks to the financial
stability of the United States.
(2) Submissions by the office and member agencies.--
Notwithstanding any other provision of law any member
agencies are authorized to submit information to the Council.
(3) Back-up examination by the board of governors.--If the
Council is unable to determine whether the financial
activities of a nonbank financial company pose a threat to
the financial stability of the United States, based on
discussions with management and publicly available
information, the Council may request the Board of Governors,
and the Board of Governors is authorized, to conduct an
examination of the nonbank financial company for the sole
purpose of determining whether the nonbank financial company
should be supervised by the Board of Governors for purposes
of this title.
(4) Confidentiality.--
(A) In general.--The Council and the member agencies shall
maintain the confidentiality of any data, information, and
reports submitted under this subsection and subtitle B.
(B) Retention of privilege.--The submission of any
nonpublicly available data or information under this
subsection shall not constitute a waiver of, or otherwise
affect, any privilege arising under Federal or State law
(including the rules of any Federal or State court) to which
the data or information is otherwise subject.
(C) Freedom of information act.--Section 552 of title 5,
United States Code, including the exceptions thereunder,
shall apply to any

[[Page S3202]]

data or information submitted under this subsection and
subtitle B.

SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REGULATION OF
CERTAIN NONBANK FINANCIAL COMPANIES.

(a) U.S. Nonbank Financial Companies Supervised by the
Board of Governors.--
(1) Determination.--The Council, on a nondelegable basis
and by a vote of not fewer than \2/3\ of the members then
serving, including an affirmative vote by the Chairperson,
may determine that a U.S. nonbank financial company shall be
supervised by the Board of Governors and shall be subject to
prudential standards, in accordance with this title, if the
Council determines that material financial distress at the
U.S. nonbank financial company would pose a threat to the
financial stability of the United States.
(2) Considerations.--Each determination under paragraph (1)
shall be based on a consideration by the Council of--
(A) the degree of leverage of the company;
(B) the amount and nature of the financial assets of the
company;
(C) the amount and types of the liabilities of the company,
including the degree of reliance on short-term funding;
(D) the extent and types of the off-balance-sheet exposures
of the company;
(E) the extent and types of the transactions and
relationships of the company with other significant nonbank
financial companies and significant bank holding companies;
(F) the importance of the company as a source of credit for
households, businesses, and State and local governments and
as a source of liquidity for the United States financial
system;
(G) the recommendation, if any, of a member of the Council;
(H) the operation of, or ownership interest in, any
clearing, settlement, or payment business of the company;
(I) the extent to which--
(i) assets are managed rather than owned by the company;
and
(ii) ownership of assets under management is diffuse; and
(J) any other factors that the Council deems appropriate.
(b) Foreign Nonbank Financial Companies Supervised by the
Board of Governors.--
(1) Determination.--The Council, on a nondelegable basis
and by a vote of not fewer than \2/3\ of the members then
serving, including an affirmative vote by the Chairperson,
may determine that a foreign nonbank financial company that
has substantial assets or operations in the United States
shall be supervised by the Board of Governors and shall be
subject to prudential standards in accordance with this
title, if the Council determines that material financial
distress at the foreign nonbank financial company would pose
a threat to the financial stability of the United States.
(2) Considerations.--Each determination under paragraph (1)
shall be based on a consideration by the Council of--
(A) the degree of leverage of the company;
(B) the amount and nature of the United States financial
assets of the company;
(C) the amount and types of the liabilities of the company
used to fund activities and operations in the United States,
including the degree of reliance on short-term funding;
(D) the extent of the United States-related off-balance-
sheet exposure of the company;
(E) the extent and type of the transactions and
relationships of the company with other significant nonbank
financial companies and bank holding companies;
(F) the importance of the company as a source of credit for
United States households, businesses, and State and local
governments, and as a source of liquidity for the United
States financial system;
(G) the recommendation, if any, of a member of the Council;
(H) the extent to which--
(i) assets are managed rather than owned by the company;
and
(ii) ownership of assets under management is diffuse; and
(I) any other factors that the Council deems appropriate.
(c) Reevaluation and Rescission.--The Council shall--
(1) not less frequently than annually, reevaluate each
determination made under subsections (a) and (b) with respect
to each nonbank financial company supervised by the Board of
Governors; and
(2) rescind any such determination, if the Council, by a
vote of not fewer than \2/3\ of the members then serving,
including an affirmative vote by the Chairperson, determines
that the nonbank financial company no longer meets the
standards under subsection (a) or (b), as applicable.
(d) Notice and Opportunity for Hearing and Final
Determination.--
(1) In general.--The Council shall provide to a nonbank
financial company written notice of a proposed determination
of the Council, including an explanation of the basis of the
proposed determination of the Council, that such nonbank
financial company shall be supervised by the Board of
Governors and shall be subject to prudential standards in
accordance with this title.
(2) Hearing.--Not later than 30 days after the date of
receipt of any notice of a proposed determination under
paragraph (1), the nonbank financial company may request, in
writing, an opportunity for a written or oral hearing before
the Council to contest the proposed determination. Upon
receipt of a timely request, the Council shall fix a time
(not later than 30 days after the date of receipt of the
request) and place at which such company may appear,
personally or through counsel, to submit written materials
(or, at the sole discretion of the Council, oral testimony
and oral argument).
(3) Final determination.--Not later than 60 days after the
date of a hearing under paragraph (2), the Council shall
notify the nonbank financial company of the final
determination of the Council, which shall contain a statement
of the basis for the decision of the Council.
(4) No hearing requested.--If a nonbank financial company
does not make a timely request for a hearing, the Council
shall notify the nonbank financial company, in writing, of
the final determination of the Council under subsection (a)
or (b), as applicable, not later than 10 days after the date
by which the company may request a hearing under paragraph
(2).
(e) Emergency Exception.--
(1) In general.--The Council may waive or modify the
requirements of subsection (d) with respect to a nonbank
financial company, if the Council determines, by a vote of
not fewer than \2/3\ of the members then serving, including
an affirmative vote by the Chairperson, that such waiver or
modification is necessary or appropriate to prevent or
mitigate threats posed by the nonbank financial company to
the financial stability of the United States.
(2) Notice.--The Council shall provide notice of a waiver
or modification under this paragraph to the nonbank financial
company concerned as soon as practicable, but not later than
24 hours after the waiver or modification is granted.
(3) Opportunity for hearing.--The Council shall allow a
nonbank financial company to request, in writing, an
opportunity for a written or oral hearing before the Council
to contest a waiver or modification under this paragraph, not
later than 10 days after the date of receipt of notice of the
waiver or modification by the company. Upon receipt of a
timely request, the Council shall fix a time (not later than
15 days after the date of receipt of the request) and place
at which the nonbank financial company may appear, personally
or through counsel, to submit written materials (or, at the
sole discretion of the Council, oral testimony and oral
argument).
(4) Notice of final determination.--Not later than 30 days
after the date of any hearing under paragraph (3), the
Council shall notify the subject nonbank financial company of
the final determination of the Council under this paragraph,
which shall contain a statement of the basis for the decision
of the Council.
(f) Consultation.--The Council shall consult with the
primary financial regulatory agency, if any, for each nonbank
financial company or subsidiary of a nonbank financial
company that is being considered for supervision by the Board
of Governors under this section before the Council makes any
final determination with respect to such nonbank financial
company under subsection (a), (b), or (c).
(g) Judicial Review.--If the Council makes a final
determination under this section with respect to a nonbank
financial company, such nonbank financial company may, not
later than 30 days after the date of receipt of the notice of
final determination under subsection (d)(3) or (e)(4), bring
an action in the United States district court for the
judicial district in which the home office of such nonbank
financial company is located, or in the United States
District Court for the District of Columbia, for an order
requiring that the final determination be rescinded, and the
court shall, upon review, dismiss such action or direct the
final determination to be rescinded. Review of such an action
shall be limited to whether the final determination made
under this section was arbitrary and capricious.

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

Not later than 180 days after the date of a final Council
determination under section 113 that a nonbank financial
company is to be supervised by the Board of Governors, such
company shall register with the Board of Governors, on forms
prescribed by the Board of Governors, which shall include
such information as the Board of Governors, in consultation
with the Council, may deem necessary or appropriate to carry
out this title.

SEC. 115. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR
NONBANK FINANCIAL COMPANIES SUPERVISED BY THE
BOARD OF GOVERNORS AND CERTAIN BANK HOLDING
COMPANIES.

(a) In General.--
(1) Purpose.--In order to prevent or mitigate risks to the
financial stability of the United States that could arise
from the material financial distress or failure of large,
interconnected financial institutions, the Council may make
recommendations to the Board of Governors concerning the
establishment and refinement of prudential standards and
reporting and disclosure requirements applicable to nonbank
financial companies supervised by the Board of Governors and
large, interconnected bank holding companies, that--
(A) are more stringent than those applicable to other
nonbank financial companies and bank holding companies that
do not present similar risks to the financial stability of
the United States; and

[[Page S3203]]

(B) increase in stringency, based on the considerations
identified in subsection (b)(3).
(2) Limitation on bank holding companies.--Any standards
recommended under subsections (b) through (f) shall not apply
to any bank holding company with total consolidated assets of
less than $50,000,000,000. The Council may recommend an asset
threshold greater than $50,000,000,000 for the applicability
of any particular standard under those subsections.
(b) Development of Prudential Standards.--
(1) In general.--The recommendations of the Council under
subsection (a) may include--
(A) risk-based capital requirements;
(B) leverage limits;
(C) liquidity requirements;
(D) resolution plan and credit exposure report
requirements;
(E) concentration limits;
(F) a contingent capital requirement;
(G) enhanced public disclosures; and
(H) overall risk management requirements.
(2) Prudential standards for foreign financial companies.--
In making recommendations concerning the standards set forth
in paragraph (1) that would apply to foreign nonbank
financial companies supervised by the Board of Governors or
foreign-based bank holding companies, the Council shall give
due regard to the principle of national treatment and
competitive equity.
(3) Considerations.--In making recommendations concerning
prudential standards under paragraph (1), the Council shall--
(A) take into account differences among nonbank financial
companies supervised by the Board of Governors and bank
holding companies described in subsection (a), based on--
(i) the factors described in subsections (a) and (b) of
section 113;
(ii) whether the company owns an insured depository
institution;
(iii) nonfinancial activities and affiliations of the
company; and
(iv) any other factors that the Council determines
appropriate; and
(B) to the extent possible, ensure that small changes in
the factors listed in subsections (a) and (b) of section 113
would not result in sharp, discontinuous changes in the
prudential standards established under paragraph (1).
(c) Contingent Capital.--
(1) Study required.--The Council shall conduct a study of
the feasibility, benefits, costs, and structure of a
contingent capital requirement for nonbank financial
companies supervised by the Board of Governors and bank
holding companies described in subsection (a), which study
shall include--
(A) an evaluation of the degree to which such requirement
would enhance the safety and soundness of companies subject
to the requirement, promote the financial stability of the
United States, and reduce risks to United States taxpayers;
(B) an evaluation of the characteristics and amounts of
convertible debt that should be required;
(C) an analysis of potential prudential standards that
should be used to determine whether the contingent capital of
a company would be converted to equity in times of financial
stress;
(D) an evaluation of the costs to companies, the effects on
the structure and operation of credit and other financial
markets, and other economic effects of requiring contingent
capital;
(E) an evaluation of the effects of such requirement on the
international competitiveness of companies subject to the
requirement and the prospects for international coordination
in establishing such requirement; and
(F) recommendations for implementing regulations.
(2) Report.--The Council shall submit a report to Congress
regarding the study required by paragraph (1) not later than
2 years after the date of enactment of this Act.
(3) Recommendations.--
(A) In general.--Subsequent to submitting a report to
Congress under paragraph (2), the Council may make
recommendations to the Board of Governors to require any
nonbank financial company supervised by the Board of
Governors and any bank holding company described in
subsection (a) to maintain a minimum amount of long-term
hybrid debt that is convertible to equity in times of
financial stress.
(B) Factors to consider.--In making recommendations under
this subsection, the Council shall consider--
(i) an appropriate transition period for implementation of
a conversion under this subsection;
(ii) the factors described in subsection (b)(3);
(iii) capital requirements applicable to a nonbank
financial company supervised by the Board of Governors or a
bank holding company described in subsection (a), and
subsidiaries thereof;
(iv) results of the study required by paragraph (1); and
(v) any other factor that the Council deems appropriate.
(d) Resolution Plan and Credit Exposure Reports.--
(1) Resolution plan.--The Council may make recommendations
to the Board of Governors concerning the requirement that
each nonbank financial company supervised by the Board of
Governors and each bank holding company described in
subsection (a) report periodically to the Council, the Board
of Governors, and the Corporation, the plan of such company
for rapid and orderly resolution in the event of material
financial distress or failure.
(2) Credit exposure report.--The Council may make
recommendations to the Board of Governors concerning the
advisability of requiring each nonbank financial company
supervised by the Board of Governors and bank holding company
described in subsection (a) to report periodically to the
Council, the Board of Governors, and the Corporation on--
(A) the nature and extent to which the company has credit
exposure to other significant nonbank financial companies and
significant bank holding companies; and
(B) the nature and extent to which other such significant
nonbank financial companies and significant bank holding
companies have credit exposure to that company.
(e) Concentration Limits.--In order to limit the risks that
the failure of any individual company could pose to nonbank
financial companies supervised by the Board of Governors or
bank holding companies described in subsection (a), the
Council may make recommendations to the Board of Governors to
prescribe standards to limit such risks, as set forth in
section 165.
(f) Enhanced Public Disclosures.--The Council may make
recommendations to the Board of Governors to require periodic
public disclosures by bank holding companies described in
subsection (a) and by nonbank financial companies supervised
by the Board of Governors, in order to support market
evaluation of the risk profile, capital adequacy, and risk
management capabilities thereof.

SEC. 116. REPORTS.

(a) In General.--Subject to subsection (b), the Council may
require a bank holding company with total consolidated assets
of $50,000,000,000 or greater or a nonbank financial company
supervised by the Board of Governors, and any subsidiary
thereof, to submit certified reports to keep the Council
informed as to--
(1) the financial condition of the company;
(2) systems for monitoring and controlling financial,
operating, and other risks;
(3) transactions with any subsidiary that is a depository
institution; and
(4) the extent to which the activities and operations of
the company and any subsidiary thereof, could, under adverse
circumstances, have the potential to disrupt financial
markets or affect the overall financial stability of the
United States.
(b) Use of Existing Reports.--
(1) In general.--For purposes of compliance with subsection
(a), the Council shall, to the fullest extent possible, use--
(A) reports that a bank holding company, nonbank financial
company supervised by the Board of Governors, or any
functionally regulated subsidiary of such company has been
required to provide to other Federal or State regulatory
agencies;
(B) information that is otherwise required to be reported
publicly; and
(C) externally audited financial statements.
(2) Availability.--Each bank holding company described in
subsection (a) and nonbank financial company supervised by
the Board of Governors, and any subsidiary thereof, shall
provide to the Council, at the request of the Council, copies
of all reports referred to in paragraph (1).
(3) Confidentiality.--The Council shall maintain the
confidentiality of the reports obtained under subsection (a)
and paragraph (1)(A) of this subsection.

SEC. 117. TREATMENT OF CERTAIN COMPANIES THAT CEASE TO BE
BANK HOLDING COMPANIES.

(a) Applicability.--This section shall apply to any entity
or a successor entity that--
(1) was a bank holding company having total consolidated
assets equal to or greater than $50,000,000,000 as of January
1, 2010; and
(2) received financial assistance under or participated in
the Capital Purchase Program established under the Troubled
Asset Relief Program authorized by the Emergency Economic
Stabilization Act of 2008.
(b) Treatment.--If an entity described in subsection (a)
ceases to be a bank holding company at any time after January
1, 2010, then such entity shall be treated as a nonbank
financial company supervised by the Board of Governors, as if
the Council had made a determination under section 113 with
respect to that entity.
(c) Appeal.--
(1) Request for hearing.--An entity may request, in
writing, an opportunity for a written or oral hearing before
the Council to appeal its treatment as a nonbank financial
company supervised by the Board of Governors in accordance
with this section. Upon receipt of the request, the Council
shall fix a time (not later than 30 days after the date of
receipt of the request) and place at which such entity may
appear, personally or through counsel, to submit written
materials (or, at the sole discretion of the Council, oral
testimony and oral argument).
(2) Decision.--
(A) Proposed decision.--Not later than 60 days after the
date of a hearing under paragraph (1), the Council shall
submit a report to, and may testify before, the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives on

[[Page S3204]]

the proposed decision of the Council regarding an appeal
under paragraph (1), which report shall include a statement
of the basis for the proposed decision of the Council.
(B) Notice of final decision.--The Council shall notify the
subject entity of the final decision of the Council regarding
an appeal under paragraph (1), which notice shall contain a
statement of the basis for the final decision of the Council,
not later than 60 days after the later of--
(i) the date of the submission of the report under
subparagraph (A); or
(ii) if the Committee on Banking, Housing, and Urban
Affairs of the Senate or the Committee on Financial Services
of the House of Representatives holds one or more hearings
regarding such report, the date of the last such hearing.
(C) Considerations.--In making a decision regarding an
appeal under paragraph (1), the Council shall consider
whether the company meets the standards under section 113(a)
or 113(b), as applicable, and the definition of the term
``nonbank financial company'' under section 102. The decision
of the Council shall be final, subject to the review under
paragraph (3).
(3) Review.--If the Council denies an appeal under this
subsection, the Council shall, not less frequently than
annually, review and reevaluate the decision.

SEC. 118. COUNCIL FUNDING.

Any expenses of the Council shall be treated as expenses
of, and paid by, the Department of the Treasury.

SEC. 119. RESOLUTION OF SUPERVISORY JURISDICTIONAL DISPUTES
AMONG MEMBER AGENCIES.

(a) Request for Dispute Resolution.--The Council shall
resolve a dispute among 2 or more member agencies, if--
(1) a member agency has a dispute with another member
agency about the respective jurisdiction over a particular
bank holding company, nonbank financial company, or financial
activity or product (excluding matters for which another
dispute mechanism specifically has been provided under
Federal law);
(2) the Council determines that the disputing agencies
cannot, after a demonstrated good faith effort, resolve the
dispute without the intervention of the Council; and
(3) any of the member agencies involved in the dispute--
(A) provides all other disputants prior notice of the
intent to request dispute resolution by the Council; and
(B) requests in writing, not earlier than 14 days after
providing the notice described in subparagraph (A), that the
Council resolve the dispute.
(b) Council Decision.--The Council shall resolve each
dispute described in subsection (a)--
(1) within a reasonable time after receiving the dispute
resolution request;
(2) after consideration of relevant information provided by
each agency party to the dispute; and
(3) by agreeing with 1 of the disputants regarding the
entirety of the matter, or by determining a compromise
position.
(c) Form and Binding Effect.--A Council decision under this
section shall--
(1) be in writing;
(2) include an explanation of the reasons therefor; and
(3) be binding on all Federal agencies that are parties to
the dispute.

SEC. 120. ADDITIONAL STANDARDS APPLICABLE TO ACTIVITIES OR
PRACTICES FOR FINANCIAL STABILITY PURPOSES.

(a) In General.--The Council may issue recommendations to
the primary financial regulatory agencies to apply new or
heightened standards and safeguards, including standards
enumerated in section 115, for a financial activity or
practice conducted by bank holding companies or nonbank
financial companies under their respective jurisdictions, if
the Council determines that the conduct of such activity or
practice could create or increase the risk of significant
liquidity, credit, or other problems spreading among bank
holding companies and nonbank financial companies or the
financial markets of the United States.
(b) Procedure for Recommendations to Regulators.--
(1) Notice and opportunity for comment.--The Council shall
consult with the primary financial regulatory agencies and
provide notice to the public and opportunity for comment for
any proposed recommendation that the primary financial
regulatory agencies apply new or heightened standards and
safeguards for a financial activity or practice.
(2) Criteria.--The new or heightened standards and
safeguards for a financial activity or practice recommended
under paragraph (1)--
(A) shall take costs to long-term economic growth into
account; and
(B) may include prescribing the conduct of the activity or
practice in specific ways (such as by limiting its scope, or
applying particular capital or risk management requirements
to the conduct of the activity) or prohibiting the activity
or practice.
(c) Implementation of Recommended Standards.--
(1) Role of primary financial regulatory agency.--
(A) In general.--Each primary financial regulatory agency
may impose, require reports regarding, examine for compliance
with, and enforce standards in accordance with this section
with respect to those entities for which it is the primary
financial regulatory agency.
(B) Rule of construction.--The authority under this
paragraph is in addition to, and does not limit, any other
authority of a primary financial regulatory agency.
Compliance by an entity with actions taken by a primary
financial regulatory agency under this section shall be
enforceable in accordance with the statutes governing the
respective jurisdiction of the primary financial regulatory
agency over the entity, as if the agency action were taken
under those statutes.
(2) Imposition of standards.--The primary financial
regulatory agency shall impose the standards recommended by
the Council in accordance with subsection (a), or similar
standards that the Council deems acceptable, or shall explain
in writing to the Council, not later than 90 days after the
date on which the Council issues the recommendation, why the
agency has determined not to follow the recommendation of the
Council.
(d) Report to Congress.--The Council shall report to
Congress on--
(1) any recommendations issued by the Council under this
section;
(2) the implementation of, or failure to implement such
recommendation on the part of a primary financial regulatory
agency; and
(3) in any case in which no primary financial regulatory
agency exists for the nonbank financial company conducting
financial activities or practices referred to in subsection
(a), recommendations for legislation that would prevent such
activities or practices from threatening the stability of the
financial system of the United States.
(e) Effect of Rescission of Identification.--
(1) Notice.--The Council may recommend to the relevant
primary financial regulatory agency that a financial activity
or practice no longer requires any standards or safeguards
implemented under this section.
(2) Determination of primary financial regulatory agency to
continue.--
(A) In general.--Upon receipt of a recommendation under
paragraph (1), a primary financial regulatory agency that has
imposed standards under this section shall determine whether
standards that it has imposed under this section should
remain in effect.
(B) Appeal process.--Each primary financial regulatory
agency that has imposed standards under this section shall
promulgate regulations to establish a procedure under which
entities under its jurisdiction may appeal a determination by
such agency under this paragraph that standards imposed under
this section should remain in effect.

SEC. 121. MITIGATION OF RISKS TO FINANCIAL STABILITY.

(a) Mitigatory Actions.--If the Board of Governors
determines that a bank holding company with total
consolidated assets of $50,000,000,000 or more, or a nonbank
financial company supervised by the Board of Governors, poses
a grave threat to the financial stability of the United
States, the Board of Governors, upon an affirmative vote of
not fewer than \2/3\ of the Council members then serving,
shall require the subject company--
(1) to terminate one or more activities;
(2) to impose conditions on the manner in which the company
conducts one or more activities; or
(3) if the Board of Governors determines that such action
is inadequate to mitigate a threat to the financial stability
of the United States in its recommendation, to sell or
otherwise transfer assets or off-balance-sheet items to
unaffiliated entities.
(b) Notice and Hearing.--
(1) In general.--The Board of Governors, in consultation
with the Council, shall provide to a company described in
subsection (a) written notice that such company is being
considered for mitigatory action pursuant to this section,
including an explanation of the basis for, and description
of, the proposed mitigatory action.
(2) Hearing.--Not later than 30 days after the date of
receipt of notice under paragraph (1), the company may
request, in writing, an opportunity for a written or oral
hearing before the Board of Governors to contest the proposed
mitigatory action. Upon receipt of a timely request, the
Board of Governors shall fix a time (not later than 30 days
after the date of receipt of the request) and place at which
such company may appear, personally or through counsel, to
submit written materials (or, at the discretion of the Board
of Governors, in consultation with the Council, oral
testimony and oral argument).
(3) Decision.--Not later than 60 days after the date of a
hearing under paragraph (2), or not later than 60 days after
the provision of a notice under paragraph (1) if no hearing
was held, the Board of Governors shall notify the company of
the final decision of the Board of Governors, including the
results of the vote of the Council, as described in
subsection (a).
(c) Factors for Consideration.--The Board of Governors and
the Council shall take into consideration the factors set
forth in subsection (a) or (b) of section 113, as applicable,
in a determination described in subsection (a) and in a
decision described in subsection (b).
(d) Application to Foreign Financial Companies.--The Board
of Governors may prescribe regulations regarding the
application of this section to foreign nonbank financial
companies supervised by the Board of Governors and foreign-
based bank holding companies, giving due regard to the
principle

[[Page S3205]]

of national treatment and competitive equity.

Subtitle B--Financial Information and Data

SEC. 151. FINANCIAL INFORMATION AND DATA.

(a) Authority To Obtain Information by Regulation.--
(1) In general.--The Council is authorized to receive, and
may request the production of, any information and data from
Council member agencies, as necessary to identify potential
risks to United States financial system stability.
(2) Submission by council members.--Notwithstanding any
other provision of law, any Council member agency, upon
request by the Council, shall provide information and data to
the Council, and the Council shall maintain the
confidentiality of such information and data.
(3) Financial information and data collection.--
(A) In general.--The Council may require, by rule, the
submission of periodic and other reports from any regulated
entity, solely for the purpose of assessing the extent to
which a financial activity or financial market in which the
financial company participates, or the financial company
itself, poses a risk to United States financial system
stability.
(B) Mitigation of report burden.--Before requiring the
submission of reports from an regulated entity, the Council
shall coordinate and shall, whenever possible, rely on
information and data already being collected by or provided
to such agency.
(C) Mitigation of requirements in case of foreign financial
parents.--Before requiring the submission of reports from anY
regulated entity that is affiliated with a holding company or
parent company that is a foreign company, the Council shall,
to the extent appropriate--
(i) coordinate with any appropriate foreign regulator of
such company and any appropriate multilateral organization;
(ii) request information regarding such company from such
foreign regulator; and
(iii) whenever possible, rely on information already being
collected by such foreign regulator or multilateral
organizational.
(D) Voluntary information and data collection from non-
regulated entities.--The Council is authorized to request
information and data from non regulated entities. To the
extent possible, the Council shall minimize information and
data requests from non regulated entities, and in all cases,
such information and data requests shall be limited to
information and data requests relevant to maintaining United
States financial system stability. Nothing in this
subparagraph shall be construed to require the provision of
information or data by any non regulated entity that is not
otherwise required to provide such information or data under
this section or any other provision of law.
(4) Definition.--As used in this subsection, the term
``regulated entity'' means any entity, other than an
individual, that is regulated and supervised by a Council
member agency.
(b) Additional Provisions.--
(1) Information and data sharing.--The Chairperson of the
Council, in consultation with the other members of the
Council, may--
(A) establish procedures, databases, and information
warehouses to share information and data collected by the
Council under this section with the members of the Council;
(B) develop an electronic process for sharing all
information and data collected by the Council with the
Council member agencies;
(C) designate the format in which requested information and
data shall be submitted to the Council, including any
electronic, digital, or other format that facilitates the use
of such information and data by the Council in its analyses.
(2) Applicable privileges not waived.--A Federal financial
regulator, State financial regulator, United States financial
company, foreign financial company operating in the United
States, financial market utility, or other person shall not
be compelled to waive, and shall not be deemed to have
waived, any privilege otherwise applicable to any information
or data by transferring the information or data to, or
permitting that information or data to be used by--
(A) the Council;
(B) any Federal financial regulator or State financial
regulator, in any capacity; or
(C) any other agency of the Federal Government (as defined
in section 6 of title 18, United States Code).
(3) Confidentiality of information.--
(A) Disclosure exemption.--The Council shall maintain the
confidentiality of information received under this subtitle,
and any information obtained by the Council under this
subtitle shall be exempt from the disclosure requirements
under section 552 of title 5, United States Code.
(B) Council confidentiality.--Notwithstanding any other
provision of law, the Council may not be compelled to
disclose any report or information contained therein filed
with the Council under this subtitle, except that nothing in
this subtitle authorizes the Council--
(i) to withhold information from Congress, upon an
agreement of confidentiality; or
(ii) prevent the Council from complying with--

(I) a request for information from any other Federal
department or agency or any self-regulatory organization
requesting the report or information for purposes within the
scope of its jurisdiction; or
(II) an order of a court of the United States in an action
brought by the United States or the Council.

(C) Protection of information and data.--The Council shall
maintain appropriate data security measures and ensure the
protection of any proprietary information or data of any
regulated entity or nonregulated entity.
(4) Consultation with foreign governments.--Under the
supervision of the President, and in a manner consistent with
section 207 of the Foreign Service Act of 1980 (22 U.S.C.
3927), the Chairperson of the Council, in consultation with
the other members of the Council, shall regularly consult
with the financial regulatory entities and other appropriate
organizations of foreign governments or international
organizations on matters relating to risks to United States
financial system stability.

Subtitle C--Additional Board of Governors Authority for Certain Nonbank
Financial Companies and Bank Holding Companies

SEC. 161. REPORTS BY AND EXAMINATIONS OF NONBANK FINANCIAL
COMPANIES BY THE BOARD OF GOVERNORS.

(a) Reports.--
(1) In general.--The Board of Governors may require each
nonbank financial company supervised by the Board of
Governors, and any subsidiary thereof, to submit reports
under oath, to keep the Board of Governors informed as to--
(A) the financial condition of the company or subsidiary,
systems of the company or subsidiary for monitoring and
controlling financial, operating, and other risks, and the
extent to which the activities and operations of the company
or subsidiary pose a threat to the financial stability of the
United States; and
(B) compliance by the company or subsidiary with the
requirements of this subtitle.
(2) Use of existing reports and information.--In carrying
out subsection (a), the Board of Governors shall, to the
fullest extent possible, use--
(A) reports and supervisory information that a nonbank
financial company or subsidiary thereof has been required to
provide to other Federal or State regulatory agencies;
(B) information otherwise obtainable from Federal or State
regulatory agencies;
(C) information that is otherwise required to be reported
publicly; and
(D) externally audited financial statements of such company
or subsidiary.
(3) Availability.--Upon the request of the Board of
Governors, a nonbank financial company supervised by the
Board of Governors, or a subsidiary thereof, shall promptly
provide to the Board of Governors any information described
in paragraph (2).
(b) Examinations.--
(1) In general.--Subject to paragraph (2), the Board of
Governors may examine any nonbank financial company
supervised by the Board of Governors and any subsidiary of
such company, to determine--
(A) the nature of the operations and financial condition of
the company and such subsidiary;
(B) the financial, operational, and other risks within the
company that may pose a threat to the safety and soundness of
such company or to the financial stability of the United
States;
(C) the systems for monitoring and controlling such risks;
and
(D) compliance by the company with the requirements of this
subtitle.
(2) Use of examination reports and information.--For
purposes of this subsection, the Board of Governors shall, to
the fullest extent possible, rely on reports of examination
of any depository institution subsidiary or functionally
regulated subsidiary made by the primary financial regulatory
agency for that subsidiary, and on information described in
subsection (a)(2).
(c) Coordination With Primary Financial Regulatory
Agency.--The Board of Governors shall--
(1) provide to the primary financial regulatory agency for
any company or subsidiary, reasonable notice before requiring
a report, requesting information, or commencing an
examination of such subsidiary under this section; and
(2) avoid duplication of examination activities, reporting
requirements, and requests for information, to the extent
possible.

SEC. 162. ENFORCEMENT.

(a) In General.--Except as provided in subsection (b), a
nonbank financial company supervised by the Board of
Governors and any subsidiaries of such company (other than
any depository institution subsidiary) shall be subject to
the provisions of subsections (b) through (n) of section 8 of
the Federal Deposit Insurance Act (12 U.S.C. 1818), in the
same manner and to the same extent as if the company were a
bank holding company, as provided in section 8(b)(3) of the
Federal Deposit Insurance Act (12 U.S.C. 1818(b)(3)).
(b) Enforcement Authority for Functionally Regulated
Subsidiaries.--
(1) Referral.--If the Board of Governors determines that a
condition, practice, or activity of a depository institution
subsidiary or functionally regulated subsidiary of a nonbank
financial company supervised by the Board of Governors does
not comply with the regulations or orders prescribed by the
Board of Governors under this Act, or otherwise poses a
threat to the financial stability of the United States, the
Board of Governors may recommend, in writing, to the primary

[[Page S3206]]

financial regulatory agency for the subsidiary that such
agency initiate a supervisory action or enforcement
proceeding. The recommendation shall be accompanied by a
written explanation of the concerns giving rise to the
recommendation.
(2) Back-up authority of the board of governors.--If,
during the 60-day period beginning on the date on which the
primary financial regulatory agency receives a recommendation
under paragraph (1), the primary financial regulatory agency
does not take supervisory or enforcement action against a
subsidiary that is acceptable to the Board of Governors, the
Board of Governors (upon a vote of its members) may take the
recommended supervisory or enforcement action, as if the
subsidiary were a bank holding company subject to supervision
by the Board of Governors.

SEC. 163. ACQUISITIONS.

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

SEC. 164. PROHIBITION AGAINST MANAGEMENT INTERLOCKS BETWEEN
CERTAIN FINANCIAL COMPANIES.

A nonbank financial company supervised by the Board of
Governors shall be treated as a bank holding company for
purposes of the Depository Institutions Management Interlocks
Act (12 U.S.C. 3201 et seq.), except that the Board of
Governors shall not exercise the authority provided in
section 7 of that Act (12 U.S.C. 3207) to permit service by a
management official of a nonbank financial company supervised
by the Board of Governors as a management official of any
bank holding company with total consolidated assets equal to
or greater than $50,000,000,000, or other nonaffiliated
nonbank financial company supervised by the Board of
Governors (other than to provide a temporary exemption for
interlocks resulting from a merger, acquisition, or
consolidation).

SEC. 165. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR
NONBANK FINANCIAL COMPANIES SUPERVISED BY THE
BOARD OF GOVERNORS AND CERTAIN BANK HOLDING
COMPANIES.

(a) In General.--
(1) Purpose.--In order to prevent or mitigate risks to the
financial stability of the United States that could arise
from the material financial distress or failure of large,
interconnected financial institutions, the Board of Governors
shall, on its own or pursuant to recommendations by the
Council under section 115, establish prudential standards and
reporting and disclosure requirements applicable to nonbank
financial companies supervised by the Board of Governors and
large, interconnected bank holding companies that--
(A) are more stringent than the standards and requirements
applicable to nonbank financial companies and bank holding
companies that do not present similar risks to the financial
stability of the United States; and
(B) increase in stringency, based on the considerations
identified in subsection (b)(3).
(2) Limitation on bank holding companies.--Any standards
established under subsections (b) through (f) shall not apply
to any bank holding company with total consolidated assets of
less than $50,000,000,000, but the Board of Governors may
establish an asset threshold greater than $50,000,000,000 for
the applicability of any particular standard under
subsections (b) through (f).
(b) Development of Prudential Standards.--
(1) In general.--
(A) Required standards.--The Board of Governors shall, by
regulation or order, establish prudential standards for
nonbank financial companies supervised by the Board of
Governors and bank holding companies described in subsection
(a), that shall include--
(i) risk-based capital requirements;
(ii) leverage limits;
(iii) liquidity requirements;
(iv) resolution plan and credit exposure report
requirements; and
(v) concentration limits.
(B) Additional standards authorized.--The Board of
Governors may, by regulation or order, establish prudential
standards for nonbank financial companies supervised by the
Board of Governors and bank holding companies described in
subsection (a), that include--
(i) a contingent capital requirement;
(ii) enhanced public disclosures; and
(iii) overall risk management requirements.
(2) Prudential standards for foreign financial companies.--
In applying the standards set forth in paragraph (1) to
foreign nonbank financial companies supervised by the Board
of Governors and to foreign-based bank holding companies, the
Board of Governors shall give due regard to the principle of
national treatment and competitive equity.
(3) Considerations.--In prescribing prudential standards
under paragraph (1), the Board of Governors shall--
(A) take into account differences among nonbank financial
companies supervised by the Board of Governors and bank
holding companies described in subsection (a), based on--
(i) the factors described in subsections (a) and (b) of
section 113;
(ii) whether the company owns an insured depository
institution;
(iii) nonfinancial activities and affiliations of the
company; and
(iv) any other factors that the Board of Governors
determines appropriate;
(B) to the extent possible, ensure that small changes in
the factors listed in subsections (a) and (b) of section 113
would not result in sharp, discontinuous changes in the
prudential standards established under paragraph (1) of this
subsection; and
(C) take into account any recommendations of the Council
under section 115.
(4) Report.--The Board of Governors shall submit an annual
report to Congress regarding the implementation of the
prudential standards required pursuant to paragraph (1),
including the use of such standards to mitigate risks to the
financial stability of the United States.
(c) Contingent Capital.--
(1) In general.--Subsequent to submission by the Council of
a report to Congress under section 115(c), the Board of
Governors may promulgate regulations that require each
nonbank financial company supervised by the Board of
Governors and bank holding companies described in subsection
(a) to maintain a minimum amount of long-term hybrid debt
that is convertible to equity in times of financial stress.
(2) Factors to consider.--In establishing regulations under
this subsection, the Board of Governors shall consider--
(A) the results of the study undertaken by the Council, and
any recommendations of the Council, under section 115(c);
(B) an appropriate transition period for implementation of
a conversion under this subsection;
(C) the factors described in subsection (b)(3)(A);
(D) capital requirements applicable to the nonbank
financial company supervised by the Board of Governors or a
bank holding company described in subsection (a), and
subsidiaries thereof; and
(E) any other factor that the Board of Governors deems
appropriate.
(d) Resolution Plan and Credit Exposure Reports.--
(1) Resolution plan.--The Board of Governors shall require
each nonbank financial company supervised by the Board of
Governors and bank holding companies described in subsection
(a) to report periodically to the Board of Governors, the
Council, and the Corporation the plan of such company for
rapid and orderly resolution in the event of material
financial distress or failure.
(2) Credit exposure report.--The Board of Governors shall
require each nonbank financial company supervised by the
Board of Governors and bank holding companies described in
subsection (a) to report periodically to the Board of
Governors, the Council, and the Corporation on--
(A) the nature and extent to which the company has credit
exposure to other significant nonbank financial companies and
significant bank holding companies; and
(B) the nature and extent to which other significant
nonbank financial companies and significant bank holding
companies have credit exposure to that company.
(3) Review.--The Board of Governors and the Corporation
shall review the information provided in accordance with this
section by each nonbank financial company supervised by the
Board of Governors and bank holding company described in
subsection (a).
(4) Notice of deficiencies.--If the Board of Governors and
the Corporation jointly determine, based on their review
under paragraph (3), that the resolution plan of a nonbank
financial company supervised by the Board of

[[Page S3207]]

Governors or a bank holding company described in subsection
(a) is not credible or would not facilitate an orderly
resolution of the company under title 11, United States
Code--
(A) the Board of Governors and the Corporation shall notify
the company, as applicable, of the deficiencies in the
resolution plan; and
(B) the company shall resubmit the resolution plan within a
time frame determined by the Board of Governors and the
Corporation, with revisions demonstrating that the plan is
credible and would result in an orderly resolution under
title 11, United States Code, including any proposed changes
in business operations and corporate structure to facilitate
implementation of the plan.
(5) Failure to resubmit credible plan.--
(A) In general.--If a nonbank financial company supervised
by the Board of Governors or a bank holding company described
in subsection (a) fails to timely resubmit the resolution
plan as required under paragraph (4), with such revisions as
are required under subparagraph (B), the Board of Governors
and the Corporation may jointly impose more stringent
capital, leverage, or liquidity requirements, or restrictions
on the growth, activities, or operations of the company, or
any subsidiary thereof, until such time as the company
resubmits a plan that remedies the deficiencies.
(B) Divestiture.--The Board of Governors and the
Corporation, in consultation with the Council, may direct a
nonbank financial company supervised by the Board of
Governors or a bank holding company described in subsection
(a), by order, to divest certain assets or operations
identified by the Board of Governors and the Corporation, to
facilitate an orderly resolution of such company under title
11, United States Code, in the event of the failure of such
company, in any case in which--
(i) the Board of Governors and the Corporation have jointly
imposed more stringent requirements on the company pursuant
to subparagraph (A); and
(ii) the company has failed, within the 2-year period
beginning on the date of the imposition of such requirements
under subparagraph (A), to resubmit the resolution plan with
such revisions as were required under paragraph (4)(B).
(6) Rules.--Not later than 18 months after the date of
enactment of this Act, the Board of Governors and the
Corporation shall jointly issue final rules implementing this
subsection.
(e) Concentration Limits.--
(1) Standards.--In order to limit the risks that the
failure of any individual company could pose to a nonbank
financial company supervised by the Board of Governors or a
bank holding company described in subsection (a), the Board
of Governors, by regulation, shall prescribe standards that
limit such risks.
(2) Limitation on credit exposure.--The regulations
prescribed by the Board of Governors under paragraph (1)
shall prohibit each nonbank financial company supervised by
the Board of Governors and bank holding company described in
subsection (a) from having credit exposure to any
unaffiliated company that exceeds 25 percent of the capital
stock and surplus (or such lower amount as the Board of
Governors may determine by regulation to be necessary to
mitigate risks to the financial stability of the United
States) of the company.
(3) Credit exposure.--For purposes of paragraph (2),
``credit exposure'' to a company means--
(A) all extensions of credit to the company, including
loans, deposits, and lines of credit;
(B) all repurchase agreements and reverse repurchase
agreements with the company;
(C) all securities borrowing and lending transactions with
the company, to the extent that such transactions create
credit exposure for the nonbank financial company supervised
by the Board of Governors or a bank holding company described
in subsection (a);
(D) all guarantees, acceptances, or letters of credit
(including endorsement or standby letters of credit) issued
on behalf of the company;
(E) all purchases of or investment in securities issued by
the company;
(F) counterparty credit exposure to the company in
connection with a derivative transaction between the nonbank
financial company supervised by the Board of Governors or a
bank holding company described in subsection (a) and the
company; and
(G) any other similar transactions that the Board of
Governors, by regulation, determines to be a credit exposure
for purposes of this section.
(4) Attribution rule.--For purposes of this subsection, any
transaction by a nonbank financial company supervised by the
Board of Governors or a bank holding company described in
subsection (a) with any person is a transaction with a
company, to the extent that the proceeds of the transaction
are used for the benefit of, or transferred to, that company.
(5) Rulemaking.--The Board of Governors may issue such
regulations and orders, including definitions consistent with
this section, as may be necessary to administer and carry out
this subsection.
(6) Exemptions.--The Board of Governors may, by regulation
or order, exempt transactions, in whole or in part, from the
definition of ``credit exposure'' for purposes of this
subsection, if the Board of Governors finds that the
exemption is in the public interest and is consistent with
the purpose of this subsection.
(7) Transition period.--
(A) In general.--This subsection and any regulations and
orders of the Board of Governors under this subsection shall
not be effective until 3 years after the date of enactment of
this Act.
(B) Extension authorized.--The Board of Governors may
extend the period specified in subparagraph (A) for not
longer than an additional 2 years.
(f) Enhanced Public Disclosures.--The Board of Governors
may prescribe, by regulation, periodic public disclosures by
nonbank financial companies supervised by the Board of
Governors and bank holding companies described in subsection
(a) in order to support market evaluation of the risk
profile, capital adequacy, and risk management capabilities
thereof.
(g) Risk Committee.--
(1) Nonbank financial companies supervised by the board of
governors.--The Board of Governors shall require each nonbank
financial company supervised by the Board of Governors that
is a publicly traded company to establish a risk committee,
as set forth in paragraph (3), not later than 1 year after
the date of receipt of a notice of final determination under
section 113(d)(3) with respect to such nonbank financial
company supervised by the Board of Governors.
(2) Certain bank holding companies.--
(A) Mandatory regulations.--The Board of Governors shall
issue regulations requiring each bank holding company that is
a publicly traded company and that has total consolidated
assets of not less than $10,000,000,000 to establish a risk
committee, as set forth in paragraph (3).
(B) Permissive regulations.--The Board of Governors may
require each bank holding company that is a publicly traded
company and that has total consolidated assets of less than
$10,000,000,000 to establish a risk committee, as set forth
in paragraph (3), as determined necessary or appropriate by
the Board of Governors to promote sound risk management
practices.
(3) Risk committee.--A risk committee required by this
subsection shall--
(A) be responsible for the oversight of the enterprise-wide
risk management practices of the nonbank financial company
supervised by the Board of Governors or bank holding company
described in subsection (a), as applicable;
(B) include such number of independent directors as the
Board of Governors may determine appropriate, based on the
nature of operations, size of assets, and other appropriate
criteria related to the nonbank financial company supervised
by the Board of Governors or a bank holding company described
in subsection (a), as applicable; and
(C) include at least 1 risk management expert having
experience in identifying, assessing, and managing risk
exposures of large, complex firms.
(4) Rulemaking.--The Board of Governors shall issue final
rules to carry out this subsection, not later than 1 year
after the transfer date, to take effect not later than 15
months after the transfer date.
(h) Stress Tests.--The Board of Governors shall conduct
analyses in which nonbank financial companies supervised by
the Board of Governors and bank holding companies described
in subsection (a) are subject to evaluation of whether the
companies have the capital, on a total consolidated basis,
necessary to absorb losses as a result of adverse economic
conditions. The Board of Governors may develop and apply such
other analytic techniques as are necessary to identify,
measure, and monitor risks to the financial stability of the
United States.

SEC. 166. EARLY REMEDIATION REQUIREMENTS.

(a) In General.--The Board of Governors, in consultation
with the Council and the Corporation, shall prescribe
regulations establishing requirements to provide for the
early remediation of financial distress of a nonbank
financial company supervised by the Board of Governors or a
bank holding company described in section 165(a), except that
nothing in this subsection authorizes the provision of
financial assistance from the Federal Government.
(b) Purpose of the Early Remediation Requirements.--The
purpose of the early remediation requirements under
subsection (a) shall be to establish a series of specific
remedial actions to be taken by a nonbank financial company
supervised by the Board of Governors or a bank holding
company described in section 165(a) that is experiencing
increasing financial distress, in order to minimize the
probability that the company will become insolvent and the
potential harm of such insolvency to the financial stability
of the United States.
(c) Remediation Requirements.--The regulations prescribed
by the Board of Governors under subsection (a) shall--
(1) define measures of the financial condition of the
company, including regulatory capital, liquidity measures,
and other forward-looking indicators; and
(2) establish requirements that increase in stringency as
the financial condition of the company declines, including--
(A) requirements in the initial stages of financial
decline, including limits on capital distributions,
acquisitions, and asset growth; and
(B) requirements at later stages of financial decline,
including a capital restoration

[[Page S3208]]

plan and capital-raising requirements, limits on transactions
with affiliates, management changes, and asset sales.

SEC. 167. AFFILIATIONS.

(a) Affiliations.--Nothing in this subtitle shall be
construed to require a nonbank financial company supervised
by the Board of Governors, or a company that controls a
nonbank financial company supervised by the Board of
Governors, to conform the activities thereof to the
requirements of section 4 of the Bank Holding Company Act of
1956 (12 U.S.C. 1843).
(b) Requirement.--
(1) In general.--If a nonbank financial company supervised
by the Board of Governors conducts activities other than
those that are determined to be financial in nature or
incidental thereto under section 4(k) of the Bank Holding
Company Act of 1956, the Board of Governors may require such
company to establish and conduct such activities that are
determined to be financial in nature or incidental thereto in
an intermediate holding company established pursuant to
regulation of the Board of Governors, not later than 90 days
after the date on which the nonbank financial company
supervised by the Board of Governors was notified of the
determination under section 113(a).
(2) Internal financial activities.--For purposes of this
subsection, activities that are determined to be financial in
nature or incidental thereto under section 4(k) of the Bank
Holding Company Act of 1956, as described in paragraph (1),
shall not include internal financial activities conducted for
a nonbank financial company supervised by the Board of
Governors or any affiliate, including internal treasury,
investment, and employee benefit functions. With respect to
any internal financial activity of such company during the
year prior to the date of enactment of this Act, such company
may continue to engage in such activity as long as at least
\2/3\ of the assets or \2/3\ of the revenues generated from
the activity are from or attributable to such company,
subject to review by the Board of Governors, to determine
whether engaging in such activity presents undue risk to such
company or to the financial stability of the United States.
(c) Regulations.--The Board of Governors--
(1) shall promulgate regulations to establish the criteria
for determining whether to require a nonbank financial
company supervised by the Board of Governors to establish an
intermediate holding company under subsection (a); and
(2) may promulgate regulations to establish any
restrictions or limitations on transactions between an
intermediate holding company or a nonbank financial company
supervised by the Board of Governors and its affiliates, as
necessary to prevent unsafe and unsound practices in
connection with transactions between such company, or any
subsidiary thereof, and its parent company or affiliates that
are not subsidiaries of such company, except that such
regulations shall not restrict or limit any transaction in
connection with the bona fide acquisition or lease by an
unaffiliated person of assets, goods, or services.

SEC. 168. REGULATIONS.

Except as otherwise specified in this subtitle, not later
than 18 months after the transfer date, the Board of
Governors shall issue final regulations to implement this
subtitle and the amendments made by this subtitle.

SEC. 169. AVOIDING DUPLICATION.

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

SEC. 170. SAFE HARBOR.

(a) Regulations.--The Board of Governors shall promulgate
regulations on behalf of, and in consultation with, the
Council setting forth the criteria for exempting certain
types or classes of U.S. nonbank financial companies or
foreign nonbank financial companies from supervision by the
Board of Governors.
(b) Considerations.--In developing the criteria under
subsection (a), the Board of Governors shall take into
account the factors for consideration described in
subsections (a) and (b) of section 113 in determining whether
a U.S. nonbank financial company or foreign nonbank financial
company shall be supervised by the Board of Governors.
(c) Rule of Construction.--Nothing in this section shall be
construed to require supervision by the Board of Governors of
a U.S. nonbank financial company or foreign nonbank financial
company, if such company does not meet the criteria for
exemption established under subsection (a).
(d) Update.--The Board of Governors shall, in consultation
with the Council, review the regulations promulgated under
subsection (a), not less frequently than every 5 years, and
based upon the review, the Board of Governors may revise such
regulations on behalf of, and in consultation with, the
Council to update as necessary the criteria set forth in such
regulations.
(e) Transition Period.--No revisions under subsection (d)
shall take effect before the end of the 2-year period after
the date of publication of such revisions in final form.
(f) Report.--The Chairperson of the Board of Governors and
the Chairperson of the Council shall submit a joint report to
the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives not later than 30 days after the date of
the issuance in final form of the regulations under
subsection (a), or any subsequent revision to such
regulations under subsection (d), as applicable. Such report
shall include, at a minimum, the rationale for exemption and
empirical evidence to support the criteria for exemption.
______

SA 3825. Mr. SHELBY 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 I and insert the following:

TITLE I--FINANCIAL STABILITY

SEC. 101. SHORT TITLE.

This title may be cited as the ``Financial Stability Act of
2010''.

SEC. 102. DEFINITIONS.

(a) In General.--For purposes of this title, unless the
context otherwise requires, the following definitions shall
apply:
(1) Bank holding company.--The term ``bank holding
company'' has the same meaning as in section 2 of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841). A foreign bank
or company that is treated as a bank holding company for
purposes of the Bank Holding Company Act of 1956, pursuant to
section 8(a) of the International Banking Act of 1978 (12
U.S.C. 3106(a)), shall be treated as a bank holding company
for purposes of this title.
(2) Chairperson.--The term ``Chairperson'' means the
Chairperson of the Council.
(3) Member agency.--The term ``member agency'' means an
agency represented by a voting member of the Council.
(4) Nonbank financial company definitions.--
(A) Foreign nonbank financial company.--The term ``foreign
nonbank financial company'' means a company (other than a
company that is, or is treated in the United States as, a
bank holding company or a subsidiary thereof) that is--
(i) incorporated or organized in a country other than the
United States; and
(ii) substantially engaged in, including through a branch
in the United States, activities in the United States that
are financial in nature (as defined in section 4(k) of the
Bank Holding Company Act of 1956).
(B) U.S. nonbank financial company.--The term ``U.S.
nonbank financial company'' means a company (other than a
bank holding company or a subsidiary thereof, or a Farm
Credit System institution chartered and subject to the
provisions of the Farm Credit Act of 1971 (12 U.S.C. 2001 et.
seq.)) that is--
(i) incorporated or organized under the laws of the United
States or any State; and
(ii) substantially engaged in activities in the United
States that are financial in nature (as defined in section
4(k) of the Bank Holding Company Act of 1956).
(C) Nonbank financial company.--The term ``nonbank
financial company'' means a U.S. nonbank financial company
and a foreign nonbank financial company.
(D) Nonbank financial company supervised by the board of
governors.--The term ``nonbank financial company supervised
by the Board of Governors'' means a nonbank financial company
that the Council has determined under section 113 shall be
supervised by the Board of Governors.
(5) Office of financial research.--The term ``Office of
Financial Research'' means the office established under
section 152.
(6) Significant institutions.--The terms ``significant
nonbank financial company'' and ``significant bank holding
company'' have the meanings given those terms by rule of the
Board of Governors.
(b) Definitional Criteria.--The Board of Governors shall
establish, by regulation, the criteria to determine whether a
company is substantially engaged in activities in the United
States that are financial in nature (as defined in section
4(k) of the Bank Holding Company Act of 1956) for purposes of
the definitions of the terms ``U.S. nonbank financial
company'' and ``foreign nonbank financial company'' under
subsection (a)(4).
(c) Foreign Nonbank Financial Companies.--For purposes of
the authority of the Board of Governors under this title with
respect to foreign nonbank financial companies, references in
this title to ``company'' or ``subsidiary'' include only the
United States activities and subsidiaries of such foreign
company.

Subtitle A--Financial Stability Oversight Council

SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ESTABLISHED.

(a) Establishment.--Effective on the date of enactment of
this Act, there is established the Financial Stability
Oversight Council.
(b) Membership.--The Council shall consist of the following
members:
(1) Voting members.--The voting members, who shall each
have 1 vote on the Council shall be--

[[Page S3209]]

(A) the Secretary of the Treasury, who shall serve as
Chairperson of the Council;
(B) the Chairman of the Board of Governors;
(C) the Comptroller of the Currency;
(D) the Director of the Bureau;
(E) the Chairman of the Commission;
(F) the Chairperson of the Corporation;
(G) the Chairperson of the Commodity Futures Trading
Commission;
(H) the Director of the Federal Housing Finance Agency; and
(I) an independent member appointed by the President, by
and with the advice and consent of the Senate, having
insurance expertise.
(2) Nonvoting members.--The Director of the Office of
Financial Research--
(A) shall serve in an advisory capacity as a nonvoting
member of the Council; and
(B) may not be excluded from any of the proceedings,
meetings, discussions, or deliberations of the Council.
(c) Terms; Vacancy.--
(1) Terms.--The independent member of the Council shall
serve for a term of 6 years.
(2) Vacancy.--Any vacancy on the Council shall be filled in
the manner in which the original appointment was made.
(3) Acting officials may serve.--In the event of a vacancy
in the office of the head of a member agency or department,
and pending the appointment of a successor, or during the
absence or disability of the head of a member agency or
department, the acting head of the member agency or
department shall serve as a member of the Council in the
place of that agency or department head.
(d) Technical and Professional Advisory Committees.--The
Council may appoint such special advisory, technical, or
professional committees as may be useful in carrying out the
functions of the Council, including an advisory committee
consisting of State regulators, and the members of such
committees may be members of the Council, or other persons,
or both.
(e) Meetings.--
(1) Timing.--The Council shall meet at the call of the
Chairperson or a majority of the members then serving, but
not less frequently than quarterly.
(2) Rules for conducting business.--The Council shall adopt
such rules as may be necessary for the conduct of the
business of the Council. Such rules shall be rules of agency
organization, procedure, or practice for purposes of section
553 of title 5, United States Code.
(f) Voting.--Unless otherwise specified, the Council shall
make all decisions that it is authorized or required to make
by a majority vote of the members then serving.
(g) Nonapplicability of FACA.--The Federal Advisory
Committee Act (5 U.S.C. App.) shall not apply to the Council,
or to any special advisory, technical, or professional
committee appointed by the Council, except that, if an
advisory, technical, or professional committee has one or
more members who are not employees of or affiliated with the
United States Government, the Council shall publish a list of
the names of the members of such committee.
(h) Assistance From Federal Agencies.--Any department or
agency of the United States may provide to the Council and
any special advisory, technical, or professional committee
appointed by the Council, such services, funds, facilities,
staff, and other support services as the Council may
determine advisable.
(i) Compensation of Members.--
(1) Federal employee members.--All members of the Council
who are officers or employees of the United States shall
serve without compensation in addition to that received for
their services as officers or employees of the United States.
(2) Compensation for non-federal member.--Section 5314 of
title 5, United States Code, is amended by adding at the end
the following:
``Independent Member of the Financial Stability Oversight
Council (1).''.
(j) Detail of Government Employees.--Any employee of the
Federal Government may be detailed to the Council without
reimbursement, and such detail shall be without interruption
or loss of civil service status or privilege. An employee of
the Federal Government detailed to the Council shall report
to and be subject to oversight by the Council during the
assignment to the Council, and shall be compensated by the
department or agency from which the employee was detailed.

SEC. 112. COUNCIL AUTHORITY.

(a) Purposes and Duties of the Council.--
(1) In general.--The purposes of the Council are--
(A) to identify risks to the financial stability of the
United States that could arise from the material financial
distress or failure of large, interconnected bank holding
companies or nonbank financial companies;
(B) to promote market discipline, by eliminating
expectations on the part of shareholders, creditors, and
counterparties of such companies that the Government will
shield them from losses in the event of failure; and
(C) to respond to emerging threats to the stability of the
United States financial markets.
(2) Duties.--The Council shall, in accordance with this
title--
(A) collect information from member agencies and other
Federal and State financial regulatory agencies and, if
necessary to assess risks to the United States financial
system, direct the Office of Financial Research to collect
information from bank holding companies and nonbank financial
companies;
(B) provide direction to, and request data and analyses
from, the Office of Financial Research to support the work of
the Council;
(C) monitor the financial services marketplace in order to
identify potential threats to the financial stability of the
United States;
(D) facilitate information sharing and coordination among
the member agencies and other Federal and State agencies
regarding domestic financial services policy development,
rulemaking, examinations, reporting requirements, and
enforcement actions;
(E) recommend to the member agencies general supervisory
priorities and principles reflecting the outcome of
discussions among the member agencies;
(F) identify gaps in regulation that could pose risks to
the financial stability of the United States;
(G) require supervision by the Board of Governors for
nonbank financial companies that may pose risks to the
financial stability of the United States in the event of
their material financial distress or failure, pursuant to
section 113;
(H) make recommendations to the Board of Governors
concerning the establishment of heightened prudential
standards for risk-based capital, leverage, liquidity,
contingent capital, resolution plans and credit exposure
reports, concentration limits, enhanced public disclosures,
and overall risk management for nonbank financial companies
and large, interconnected bank holding companies supervised
by the Board of Governors;
(I) identify systemically important financial market
utilities and payment, clearing, and settlement activities
(as that term is defined in title VIII), and require such
utilities and activities to be subject to standards
established by the Board of Governors;
(J) make recommendations to primary financial regulatory
agencies to apply new or heightened standards and safeguards
for financial activities or practices that could create or
increase risks of significant liquidity, credit, or other
problems spreading among bank holding companies, nonbank
financial companies, and United States financial markets;
(K) make determinations regarding exemptions in title VII,
where necessary;
(L) provide a forum for--
(i) discussion and analysis of emerging market developments
and financial regulatory issues; and
(ii) resolution of jurisdictional disputes among the
members of the Council; and
(M) annually report to and testify before Congress on--
(i) the activities of the Council;
(ii) significant financial market developments and
potential emerging threats to the financial stability of the
United States;
(iii) all determinations made under section 113 or title
VIII, and the basis for such determinations; and
(iv) recommendations--

(I) to enhance the integrity, efficiency, competitiveness,
and stability of United States financial markets;
(II) to promote market discipline; and
(III) to maintain investor confidence.

(b) Authority To Obtain Information.--
(1) In general.--The Council may receive, and may request
the submission of, any data or information from the Office of
Financial Research and member agencies, as necessary--
(A) to monitor the financial services marketplace to
identify potential risks to the financial stability of the
United States; or
(B) to otherwise carry out any of the provisions of this
title.
(2) Submissions by the office and member agencies.--
Notwithstanding any other provision of law, the Office of
Financial Research and any member agency are authorized to
submit information to the Council.
(3) Financial data collection.--
(A) In general.--The Council, acting through the Office of
Financial Research, may require the submission of periodic
and other reports from any nonbank financial company
regulated by the Board of Governors or bank holding company
for the purpose of assessing the extent to which a financial
activity or financial market in which the nonbank financial
company or bank holding company participates, or such nonbank
financial company or bank holding company itself, poses a
threat to the financial stability of the United States.
(B) Mitigation of report burden.--Before requiring the
submission of reports from any nonbank financial company or
bank holding company that is regulated by a member agency or
any primary financial regulatory agency, the Council, acting
through the Office of Financial Research, shall coordinate
with such agencies and shall, whenever possible, rely on
information available from the Office of Financial Research
or such agencies.
(4) Back-up examination by the board of governors.--If the
Council is unable to determine whether the financial
activities of a nonbank financial company pose a threat to
the financial stability of the United States, based on
information or reports obtained under paragraph (3),
discussions with management, and publicly available
information, the Council may request the Board of Governors,
and the Board of Governors is authorized, to conduct an
examination of the nonbank financial company for the sole
purpose of determining whether the nonbank financial company
should be supervised by the Board of Governors for purposes
of this title.

[[Page S3210]]

(5) Confidentiality.--
(A) In general.--The Council, the Office of Financial
Research, and the other member agencies shall maintain the
confidentiality of any data, information, and reports
submitted under this subsection and subtitle B.
(B) Retention of privilege.--The submission of any
nonpublicly available data or information under this
subsection and subtitle B shall not constitute a waiver of,
or otherwise affect, any privilege arising under Federal or
State law (including the rules of any Federal or State court)
to which the data or information is otherwise subject.
(C) Freedom of information act.--Section 552 of title 5,
United States Code, including the exceptions thereunder,
shall apply to any data or information submitted under this
subsection and subtitle B.

SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REGULATION OF
CERTAIN NONBANK FINANCIAL COMPANIES.

(a) U.S. Nonbank Financial Companies Supervised by the
Board of Governors.--
(1) Determination.--The Council, on a nondelegable basis
and by a vote of not fewer than \2/3\ of the members then
serving, including an affirmative vote by the Chairperson,
may determine that a U.S. nonbank financial company shall be
supervised by the Board of Governors and shall be subject to
prudential standards, in accordance with this title, if the
Council determines that material financial distress at the
U.S. nonbank financial company would pose a threat to the
financial stability of the United States.
(2) Considerations.--Each determination under paragraph (1)
shall be based on a consideration by the Council of--
(A) the degree of leverage of the company;
(B) the amount and nature of the financial assets of the
company;
(C) the amount and types of the liabilities of the company,
including the degree of reliance on short-term funding;
(D) the extent and types of the off-balance-sheet exposures
of the company;
(E) the extent and types of the transactions and
relationships of the company with other significant nonbank
financial companies and significant bank holding companies;
(F) the importance of the company as a source of credit for
households, businesses, and State and local governments and
as a source of liquidity for the United States financial
system;
(G) the recommendation, if any, of a member of the Council;
(H) the operation of, or ownership interest in, any
clearing, settlement, or payment business of the company;
(I) the extent to which--
(i) assets are managed rather than owned by the company;
and
(ii) ownership of assets under management is diffuse; and
(J) any other factors that the Council deems appropriate.
(b) Foreign Nonbank Financial Companies Supervised by the
Board of Governors.--
(1) Determination.--The Council, on a nondelegable basis
and by a vote of not fewer than \2/3\ of the members then
serving, including an affirmative vote by the Chairperson,
may determine that a foreign nonbank financial company that
has substantial assets or operations in the United States
shall be supervised by the Board of Governors and shall be
subject to prudential standards in accordance with this
title, if the Council determines that material financial
distress at the foreign nonbank financial company would pose
a threat to the financial stability of the United States.
(2) Considerations.--Each determination under paragraph (1)
shall be based on a consideration by the Council of--
(A) the degree of leverage of the company;
(B) the amount and nature of the United States financial
assets of the company;
(C) the amount and types of the liabilities of the company
used to fund activities and operations in the United States,
including the degree of reliance on short-term funding;
(D) the extent of the United States-related off-balance-
sheet exposure of the company;
(E) the extent and type of the transactions and
relationships of the company with other significant nonbank
financial companies and bank holding companies;
(F) the importance of the company as a source of credit for
United States households, businesses, and State and local
governments, and as a source of liquidity for the United
States financial system;
(G) the recommendation, if any, of a member of the Council;
(H) the extent to which--
(i) assets are managed rather than owned by the company;
and
(ii) ownership of assets under management is diffuse; and
(I) any other factors that the Council deems appropriate.
(c) Reevaluation and Rescission.--The Council shall--
(1) not less frequently than annually, reevaluate each
determination made under subsections (a) and (b) with respect
to each nonbank financial company supervised by the Board of
Governors; and
(2) rescind any such determination, if the Council, by a
vote of not fewer than \2/3\ of the members then serving,
including an affirmative vote by the Chairperson, determines
that the nonbank financial company no longer meets the
standards under subsection (a) or (b), as applicable.
(d) Notice and Opportunity for Hearing and Final
Determination.--
(1) In general.--The Council shall provide to a nonbank
financial company written notice of a proposed determination
of the Council, including an explanation of the basis of the
proposed determination of the Council, that such nonbank
financial company shall be supervised by the Board of
Governors and shall be subject to prudential standards in
accordance with this title.
(2) Hearing.--Not later than 30 days after the date of
receipt of any notice of a proposed determination under
paragraph (1), the nonbank financial company may request, in
writing, an opportunity for a written or oral hearing before
the Council to contest the proposed determination. Upon
receipt of a timely request, the Council shall fix a time
(not later than 30 days after the date of receipt of the
request) and place at which such company may appear,
personally or through counsel, to submit written materials
(or, at the sole discretion of the Council, oral testimony
and oral argument).
(3) Final determination.--Not later than 60 days after the
date of a hearing under paragraph (2), the Council shall
notify the nonbank financial company of the final
determination of the Council, which shall contain a statement
of the basis for the decision of the Council.
(4) No hearing requested.--If a nonbank financial company
does not make a timely request for a hearing, the Council
shall notify the nonbank financial company, in writing, of
the final determination of the Council under subsection (a)
or (b), as applicable, not later than 10 days after the date
by which the company may request a hearing under paragraph
(2).
(e) Emergency Exception.--
(1) In general.--The Council may waive or modify the
requirements of subsection (d) with respect to a nonbank
financial company, if the Council determines, by a vote of
not fewer than \2/3\ of the members then serving, including
an affirmative vote by the Chairperson, that such waiver or
modification is necessary or appropriate to prevent or
mitigate threats posed by the nonbank financial company to
the financial stability of the United States.
(2) Notice.--The Council shall provide notice of a waiver
or modification under this paragraph to the nonbank financial
company concerned as soon as practicable, but not later than
24 hours after the waiver or modification is granted.
(3) Opportunity for hearing.--The Council shall allow a
nonbank financial company to request, in writing, an
opportunity for a written or oral hearing before the Council
to contest a waiver or modification under this paragraph, not
later than 10 days after the date of receipt of notice of the
waiver or modification by the company. Upon receipt of a
timely request, the Council shall fix a time (not later than
15 days after the date of receipt of the request) and place
at which the nonbank financial company may appear, personally
or through counsel, to submit written materials (or, at the
sole discretion of the Council, oral testimony and oral
argument).
(4) Notice of final determination.--Not later than 30 days
after the date of any hearing under paragraph (3), the
Council shall notify the subject nonbank financial company of
the final determination of the Council under this paragraph,
which shall contain a statement of the basis for the decision
of the Council.
(f) Consultation.--The Council shall consult with the
primary financial regulatory agency, if any, for each nonbank
financial company or subsidiary of a nonbank financial
company that is being considered for supervision by the Board
of Governors under this section before the Council makes any
final determination with respect to such nonbank financial
company under subsection (a), (b), or (c).
(g) Judicial Review.--If the Council makes a final
determination under this section with respect to a nonbank
financial company, such nonbank financial company may, not
later than 30 days after the date of receipt of the notice of
final determination under subsection (d)(3) or (e)(4), bring
an action in the United States district court for the
judicial district in which the home office of such nonbank
financial company is located, or in the United States
District Court for the District of Columbia, for an order
requiring that the final determination be rescinded, and the
court shall, upon review, dismiss such action or direct the
final determination to be rescinded. Review of such an action
shall be limited to whether the final determination made
under this section was arbitrary and capricious.

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

Not later than 180 days after the date of a final Council
determination under section 113 that a nonbank financial
company is to be supervised by the Board of Governors, such
company shall register with the Board of Governors, on forms
prescribed by the Board of Governors, which shall include
such information as the Board of Governors, in consultation
with the Council, may deem necessary or appropriate to carry
out this title.

SEC. 115. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR
NONBANK FINANCIAL COMPANIES SUPERVISED BY THE
BOARD OF GOVERNORS AND CERTAIN BANK HOLDING
COMPANIES.

(a) In General.--
(1) Purpose.--In order to prevent or mitigate risks to the
financial stability of the

[[Page S3211]]

United States that could arise from the material financial
distress or failure of large, interconnected financial
institutions, the Council may make recommendations to the
Board of Governors concerning the establishment and
refinement of prudential standards and reporting and
disclosure requirements applicable to nonbank financial
companies supervised by the Board of Governors and large,
interconnected bank holding companies, that--
(A) are more stringent than those applicable to other
nonbank financial companies and bank holding companies that
do not present similar risks to the financial stability of
the United States; and
(B) increase in stringency, based on the considerations
identified in subsection (b)(3).
(2) Limitation on bank holding companies.--Any standards
recommended under subsections (b) through (f) shall not apply
to any bank holding company with total consolidated assets of
less than $50,000,000,000. The Council may recommend an asset
threshold greater than $50,000,000,000 for the applicability
of any particular standard under those subsections.
(b) Development of Prudential Standards.--
(1) In general.--The recommendations of the Council under
subsection (a) may include--
(A) risk-based capital requirements;
(B) leverage limits;
(C) liquidity requirements;
(D) resolution plan and credit exposure report
requirements;
(E) concentration limits;
(F) a contingent capital requirement;
(G) enhanced public disclosures; and
(H) overall risk management requirements.
(2) Prudential standards for foreign financial companies.--
In making recommendations concerning the standards set forth
in paragraph (1) that would apply to foreign nonbank
financial companies supervised by the Board of Governors or
foreign-based bank holding companies, the Council shall give
due regard to the principle of national treatment and
competitive equity.
(3) Considerations.--In making recommendations concerning
prudential standards under paragraph (1), the Council shall--
(A) take into account differences among nonbank financial
companies supervised by the Board of Governors and bank
holding companies described in subsection (a), based on--
(i) the factors described in subsections (a) and (b) of
section 113;
(ii) whether the company owns an insured depository
institution;
(iii) nonfinancial activities and affiliations of the
company; and
(iv) any other factors that the Council determines
appropriate; and
(B) to the extent possible, ensure that small changes in
the factors listed in subsections (a) and (b) of section 113
would not result in sharp, discontinuous changes in the
prudential standards established under paragraph (1).
(c) Contingent Capital.--
(1) Study required.--The Council shall conduct a study of
the feasibility, benefits, costs, and structure of a
contingent capital requirement for nonbank financial
companies supervised by the Board of Governors and bank
holding companies described in subsection (a), which study
shall include--
(A) an evaluation of the degree to which such requirement
would enhance the safety and soundness of companies subject
to the requirement, promote the financial stability of the
United States, and reduce risks to United States taxpayers;
(B) an evaluation of the characteristics and amounts of
convertible debt that should be required;
(C) an analysis of potential prudential standards that
should be used to determine whether the contingent capital of
a company would be converted to equity in times of financial
stress;
(D) an evaluation of the costs to companies, the effects on
the structure and operation of credit and other financial
markets, and other economic effects of requiring contingent
capital;
(E) an evaluation of the effects of such requirement on the
international competitiveness of companies subject to the
requirement and the prospects for international coordination
in establishing such requirement; and
(F) recommendations for implementing regulations.
(2) Report.--The Council shall submit a report to Congress
regarding the study required by paragraph (1) not later than
2 years after the date of enactment of this Act.
(3) Recommendations.--
(A) In general.--Subsequent to submitting a report to
Congress under paragraph (2), the Council may make
recommendations to the Board of Governors to require any
nonbank financial company supervised by the Board of
Governors and any bank holding company described in
subsection (a) to maintain a minimum amount of long-term
hybrid debt that is convertible to equity in times of
financial stress.
(B) Factors to consider.--In making recommendations under
this subsection, the Council shall consider--
(i) an appropriate transition period for implementation of
a conversion under this subsection;
(ii) the factors described in subsection (b)(3);
(iii) capital requirements applicable to a nonbank
financial company supervised by the Board of Governors or a
bank holding company described in subsection (a), and
subsidiaries thereof;
(iv) results of the study required by paragraph (1); and
(v) any other factor that the Council deems appropriate.
(d) Resolution Plan and Credit Exposure Reports.--
(1) Resolution plan.--The Council may make recommendations
to the Board of Governors concerning the requirement that
each nonbank financial company supervised by the Board of
Governors and each bank holding company described in
subsection (a) report periodically to the Council, the Board
of Governors, and the Corporation, the plan of such company
for rapid and orderly resolution in the event of material
financial distress or failure.
(2) Credit exposure report.--The Council may make
recommendations to the Board of Governors concerning the
advisability of requiring each nonbank financial company
supervised by the Board of Governors and bank holding company
described in subsection (a) to report periodically to the
Council, the Board of Governors, and the Corporation on--
(A) the nature and extent to which the company has credit
exposure to other significant nonbank financial companies and
significant bank holding companies; and
(B) the nature and extent to which other such significant
nonbank financial companies and significant bank holding
companies have credit exposure to that company.
(e) Concentration Limits.--In order to limit the risks that
the failure of any individual company could pose to nonbank
financial companies supervised by the Board of Governors or
bank holding companies described in subsection (a), the
Council may make recommendations to the Board of Governors to
prescribe standards to limit such risks, as set forth in
section 165.
(f) Enhanced Public Disclosures.--The Council may make
recommendations to the Board of Governors to require periodic
public disclosures by bank holding companies described in
subsection (a) and by nonbank financial companies supervised
by the Board of Governors, in order to support market
evaluation of the risk profile, capital adequacy, and risk
management capabilities thereof.

SEC. 116. REPORTS.

(a) In General.--Subject to subsection (b), the Council,
acting through the Office of Financial Research, may require
a bank holding company with total consolidated assets of
$50,000,000,000 or greater or a nonbank financial company
supervised by the Board of Governors, and any subsidiary
thereof, to submit certified reports to keep the Council
informed as to--
(1) the financial condition of the company;
(2) systems for monitoring and controlling financial,
operating, and other risks;
(3) transactions with any subsidiary that is a depository
institution; and
(4) the extent to which the activities and operations of
the company and any subsidiary thereof, could, under adverse
circumstances, have the potential to disrupt financial
markets or affect the overall financial stability of the
United States.
(b) Use of Existing Reports.--
(1) In general.--For purposes of compliance with subsection
(a), the Council, acting through the Office of Financial
Research, shall, to the fullest extent possible, use--
(A) reports that a bank holding company, nonbank financial
company supervised by the Board of Governors, or any
functionally regulated subsidiary of such company has been
required to provide to other Federal or State regulatory
agencies;
(B) information that is otherwise required to be reported
publicly; and
(C) externally audited financial statements.
(2) Availability.--Each bank holding company described in
subsection (a) and nonbank financial company supervised by
the Board of Governors, and any subsidiary thereof, shall
provide to the Council, at the request of the Council, copies
of all reports referred to in paragraph (1).
(3) Confidentiality.--The Council shall maintain the
confidentiality of the reports obtained under subsection (a)
and paragraph (1)(A) of this subsection.

SEC. 117. TREATMENT OF CERTAIN COMPANIES THAT CEASE TO BE
BANK HOLDING COMPANIES.

(a) Applicability.--This section shall apply to any entity
or a successor entity that--
(1) was a bank holding company having total consolidated
assets equal to or greater than $50,000,000,000 as of January
1, 2010; and
(2) received financial assistance under or participated in
the Capital Purchase Program established under the Troubled
Asset Relief Program authorized by the Emergency Economic
Stabilization Act of 2008.
(b) Treatment.--If an entity described in subsection (a)
ceases to be a bank holding company at any time after January
1, 2010, then such entity shall be treated as a nonbank
financial company supervised by the Board of Governors, as if
the Council had made a determination under section 113 with
respect to that entity.
(c) Appeal.--
(1) Request for hearing.--An entity may request, in
writing, an opportunity for a written or oral hearing before
the Council to

[[Page S3212]]

appeal its treatment as a nonbank financial company
supervised by the Board of Governors in accordance with this
section. Upon receipt of the request, the Council shall fix a
time (not later than 30 days after the date of receipt of the
request) and place at which such entity may appear,
personally or through counsel, to submit written materials
(or, at the sole discretion of the Council, oral testimony
and oral argument).
(2) Decision.--
(A) Proposed decision.--Not later than 60 days after the
date of a hearing under paragraph (1), the Council shall
submit a report to, and may testify before, the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives on the proposed decision of the Council
regarding an appeal under paragraph (1), which report shall
include a statement of the basis for the proposed decision of
the Council.
(B) Notice of final decision.--The Council shall notify the
subject entity of the final decision of the Council regarding
an appeal under paragraph (1), which notice shall contain a
statement of the basis for the final decision of the Council,
not later than 60 days after the later of--
(i) the date of the submission of the report under
subparagraph (A); or
(ii) if the Committee on Banking, Housing, and Urban
Affairs of the Senate or the Committee on Financial Services
of the House of Representatives holds one or more hearings
regarding such report, the date of the last such hearing.
(C) Considerations.--In making a decision regarding an
appeal under paragraph (1), the Council shall consider
whether the company meets the standards under section 113(a)
or 113(b), as applicable, and the definition of the term
``nonbank financial company'' under section 102. The decision
of the Council shall be final, subject to the review under
paragraph (3).
(3) Review.--If the Council denies an appeal under this
subsection, the Council shall, not less frequently than
annually, review and reevaluate the decision.

SEC. 118. COUNCIL FUNDING.

Any expenses of the Council and the Office of Financial
Research shall be treated as expenses of, and paid by, the
Department of the Treasury.

SEC. 119. RESOLUTION OF SUPERVISORY JURISDICTIONAL DISPUTES
AMONG MEMBER AGENCIES.

(a) Request for Dispute Resolution.--The Council shall
resolve a dispute among 2 or more member agencies, if--
(1) a member agency has a dispute with another member
agency about the respective jurisdiction over a particular
bank holding company, nonbank financial company, or financial
activity or product (excluding matters for which another
dispute mechanism specifically has been provided under
Federal law);
(2) the Council determines that the disputing agencies
cannot, after a demonstrated good faith effort, resolve the
dispute without the intervention of the Council; and
(3) any of the member agencies involved in the dispute--
(A) provides all other disputants prior notice of the
intent to request dispute resolution by the Council; and
(B) requests in writing, not earlier than 14 days after
providing the notice described in subparagraph (A), that the
Council resolve the dispute.
(b) Council Decision.--The Council shall resolve each
dispute described in subsection (a)--
(1) within a reasonable time after receiving the dispute
resolution request;
(2) after consideration of relevant information provided by
each agency party to the dispute; and
(3) by agreeing with 1 of the disputants regarding the
entirety of the matter, or by determining a compromise
position.
(c) Form and Binding Effect.--A Council decision under this
section shall--
(1) be in writing;
(2) include an explanation of the reasons therefor; and
(3) be binding on all Federal agencies that are parties to
the dispute.

SEC. 120. ADDITIONAL STANDARDS APPLICABLE TO ACTIVITIES OR
PRACTICES FOR FINANCIAL STABILITY PURPOSES.

(a) In General.--The Council may issue recommendations to
the primary financial regulatory agencies to apply new or
heightened standards and safeguards, including standards
enumerated in section 115, for a financial activity or
practice conducted by bank holding companies or nonbank
financial companies under their respective jurisdictions, if
the Council determines that the conduct of such activity or
practice could create or increase the risk of significant
liquidity, credit, or other problems spreading among bank
holding companies and nonbank financial companies or the
financial markets of the United States.
(b) Procedure for Recommendations to Regulators.--
(1) Notice and opportunity for comment.--The Council shall
consult with the primary financial regulatory agencies and
provide notice to the public and opportunity for comment for
any proposed recommendation that the primary financial
regulatory agencies apply new or heightened standards and
safeguards for a financial activity or practice.
(2) Criteria.--The new or heightened standards and
safeguards for a financial activity or practice recommended
under paragraph (1)--
(A) shall take costs to long-term economic growth into
account; and
(B) may include prescribing the conduct of the activity or
practice in specific ways (such as by limiting its scope, or
applying particular capital or risk management requirements
to the conduct of the activity) or prohibiting the activity
or practice.
(c) Implementation of Recommended Standards.--
(1) Role of primary financial regulatory agency.--
(A) In general.--Each primary financial regulatory agency
may impose, require reports regarding, examine for compliance
with, and enforce standards in accordance with this section
with respect to those entities for which it is the primary
financial regulatory agency.
(B) Rule of construction.--The authority under this
paragraph is in addition to, and does not limit, any other
authority of a primary financial regulatory agency.
Compliance by an entity with actions taken by a primary
financial regulatory agency under this section shall be
enforceable in accordance with the statutes governing the
respective jurisdiction of the primary financial regulatory
agency over the entity, as if the agency action were taken
under those statutes.
(2) Imposition of standards.--The primary financial
regulatory agency shall impose the standards recommended by
the Council in accordance with subsection (a), or similar
standards that the Council deems acceptable, or shall explain
in writing to the Council, not later than 90 days after the
date on which the Council issues the recommendation, why the
agency has determined not to follow the recommendation of the
Council.
(d) Report to Congress.--The Council shall report to
Congress on--
(1) any recommendations issued by the Council under this
section;
(2) the implementation of, or failure to implement such
recommendation on the part of a primary financial regulatory
agency; and
(3) in any case in which no primary financial regulatory
agency exists for the nonbank financial company conducting
financial activities or practices referred to in subsection
(a), recommendations for legislation that would prevent such
activities or practices from threatening the stability of the
financial system of the United States.
(e) Effect of Rescission of Identification.--
(1) Notice.--The Council may recommend to the relevant
primary financial regulatory agency that a financial activity
or practice no longer requires any standards or safeguards
implemented under this section.
(2) Determination of primary financial regulatory agency to
continue.--
(A) In general.--Upon receipt of a recommendation under
paragraph (1), a primary financial regulatory agency that has
imposed standards under this section shall determine whether
standards that it has imposed under this section should
remain in effect.
(B) Appeal process.--Each primary financial regulatory
agency that has imposed standards under this section shall
promulgate regulations to establish a procedure under which
entities under its jurisdiction may appeal a determination by
such agency under this paragraph that standards imposed under
this section should remain in effect.

SEC. 121. MITIGATION OF RISKS TO FINANCIAL STABILITY.

(a) Mitigatory Actions.--If the Board of Governors
determines that a bank holding company with total
consolidated assets of $50,000,000,000 or more, or a nonbank
financial company supervised by the Board of Governors, poses
a grave threat to the financial stability of the United
States, the Board of Governors, upon an affirmative vote of
not fewer than \2/3\ of the Council members then serving,
shall require the subject company--
(1) to terminate one or more activities;
(2) to impose conditions on the manner in which the company
conducts one or more activities; or
(3) if the Board of Governors determines that such action
is inadequate to mitigate a threat to the financial stability
of the United States in its recommendation, to sell or
otherwise transfer assets or off-balance-sheet items to
unaffiliated entities.
(b) Notice and Hearing.--
(1) In general.--The Board of Governors, in consultation
with the Council, shall provide to a company described in
subsection (a) written notice that such company is being
considered for mitigatory action pursuant to this section,
including an explanation of the basis for, and description
of, the proposed mitigatory action.
(2) Hearing.--Not later than 30 days after the date of
receipt of notice under paragraph (1), the company may
request, in writing, an opportunity for a written or oral
hearing before the Board of Governors to contest the proposed
mitigatory action. Upon receipt of a timely request, the
Board of Governors shall fix a time (not later than 30 days
after the date of receipt of the request) and place at which
such company may appear, personally or through counsel, to
submit written materials (or, at the discretion of the Board
of Governors, in consultation with the Council, oral
testimony and oral argument).
(3) Decision.--Not later than 60 days after the date of a
hearing under paragraph (2), or not later than 60 days after
the provision of a notice under paragraph (1) if no hearing

[[Page S3213]]

was held, the Board of Governors shall notify the company of
the final decision of the Board of Governors, including the
results of the vote of the Council, as described in
subsection (a).
(c) Factors for Consideration.--The Board of Governors and
the Council shall take into consideration the factors set
forth in subsection (a) or (b) of section 113, as applicable,
in a determination described in subsection (a) and in a
decision described in subsection (b).
(d) Application to Foreign Financial Companies.--The Board
of Governors may prescribe regulations regarding the
application of this section to foreign nonbank financial
companies supervised by the Board of Governors and foreign-
based bank holding companies, giving due regard to the
principle of national treatment and competitive equity.

Subtitle B--Office of Financial Research

SEC. 151. DEFINITIONS.

For purposes of this subtitle--
(1) the terms ``Office'' and ``Director'' mean the Office
of Financial Research established under this subtitle and the
Director thereof, respectively;
(2) the term ``financial company'' has the same meaning as
in title II, and includes an insured depository institution
and an insurance company;
(3) the term ``Research and Analysis Center'' means the
research and analysis center established under section 154;
(4) the term ``financial transaction data'' means the
structure and legal description of a financial contract, with
sufficient detail to describe the rights and obligations
between counterparties and make possible an independent
valuation;
(5) the term ``position data''--
(A) means data on financial assets or liabilities held on
the balance sheet of a financial company, where positions are
created or changed by the execution of a financial
transaction; and
(B) includes information that identifies counterparties,
the valuation by the financial company of the position, and
information that makes possible an independent valuation of
the position;
(6) the term ``financial contract'' means a legally binding
agreement between 2 or more counterparties, describing rights
and obligations relating to the future delivery of items of
intrinsic or extrinsic value among the counterparties; and
(7) the term ``financial instrument'' means a financial
contract in which the terms and conditions are publicly
available, and the roles of one or more of the counterparties
are assignable without the consent of any of the other
counterparties (including common stock of a publicly traded
company, government bonds, or exchange traded futures and
options contracts).

SEC. 152. OFFICE OF FINANCIAL RESEARCH ESTABLISHED.

(a) Establishment.--There is established within the
Department of the Treasury the Office of Financial Research.
(b) Director.--
(1) In general.--The Office shall be headed by a Director,
who shall be appointed by the President, by and with the
advice and consent of the Senate.
(2) Term of service.--The Director shall serve for a term
of 6 years, except that, in the event that a successor is not
nominated and confirmed by the end of the term of service of
a Director, the Director may continue to serve until such
time as the next Director is appointed and confirmed.
(3) Executive level.--The Director shall be compensated at
level III of the Executive Schedule.
(4) Prohibition on dual service.--The individual serving in
the position of Director may not, during such service, also
serve as the head of any financial regulatory agency.
(5) Responsibilities, duties, and authority.--The Director
shall have sole discretion in the manner in which the
Director fulfills the responsibilities and duties and
exercises the authorities described in this subtitle.
(c) Budget.--The Director, with the approval of the
Chairperson, shall establish the annual budget of the Office.
(d) Office Personnel.--
(1) In general.--The Director, with approval of the
Chairperson, may fix the number of, and appoint and direct,
all employees of the Office.
(2) Compensation.--The Director, in consultation with the
Chairperson, shall fix, adjust, and administer the pay for
all employees of the Office.
(e) Assistance From Federal Agencies.--Any department or
agency of the United States may provide to the Office and any
special advisory, technical, or professional committees
appointed by the Office, such services, funds, facilities,
staff, and other support services as the Office may determine
advisable. Any Federal Government employee may be detailed to
the Office without reimbursement, and such detail shall be
without interruption or loss of civil service status or
privilege.
(f) Non-Compete.--The Director and any staff of the Office
who has had access to the transaction or position data or
other business confidential information about financial
entities required to report to the Office, may not, for a
period of 1 year after last having access to such transaction
or position data or business confidential information, be
employed by or provide advice or consulting services to a
financial company, regardless of whether that entity is
required to report to the Office. For staff whose access to
business confidential information was limited, the Director
may provide, on a case-by-case basis, for a shorter period of
post-employment prohibition, provided that the shorter period
does not compromise business confidential information.
(g) Executive Schedule Compensation.--Section 5314 of title
5, United States Code, is amended by adding at the end the
following new item:
``Director of the Office of Financial Research.''.

SEC. 153. PURPOSE AND DUTIES OF THE OFFICE.

(a) Purpose and Duties.--The purpose of the Office is to
support the Council in fulfilling the purposes and duties of
the Council, as set forth in subtitle A, and to support
member agencies, by--
(1) collecting data on behalf of the Council, and providing
such data to the Council and member agencies;
(2) standardizing the types and formats of data reported
and collected;
(3) performing applied research and essential long-term
research;
(4) developing tools for risk measurement and monitoring;
(5) performing other related services;
(6) making the results of the activities of the Office
available to financial regulatory agencies; and
(7) assisting such member agencies in determining the types
and formats of data authorized by this Act to be collected by
such member agencies.
(b) Administrative Authority.--The Office may share data
and information, including software developed by the Office,
with the Council and member agencies, which shared data,
information, and software--
(1) shall be maintained with at least the same level of
security as is used by the Office; and
(2) may not be shared with any individual or entity.
(c) Guidance.--
(1) Scope.--The Office, in consultation with the
Chairperson, shall issue guidance to carry out the purposes
and duties described in paragraphs (1), (2), and (7) of
subsection (a).
(2) Standardization.--Member agencies, in consultation with
the Office, shall work to standardize the types and formats
of data reported and collected on behalf of the Council, as
described in subsection (a)(2).
(d) Testimony.--The Director of the Office shall report to
and testify before the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives annually on the
activities of the Office, including the work of the Data
Center and the Research and Analysis Center, and the
assessment of the Office of significant financial market
developments and potential emerging threats to the financial
stability of the United States.
(e) Additional Reports.--The Director may, with the
approval of the Chairperson, provide additional reports to
Congress concerning the financial stability of the United
States.

SEC. 154. ORGANIZATIONAL STRUCTURE; RESPONSIBILITIES OF
RESEARCH AND ANALYSIS CENTER.

(a) In General.--There is established within the Office, to
carry out the programmatic responsibilities of the Office,
the Research and Analysis Center.
(b) Research and Analysis Center.--The Research and
Analysis Center, on behalf of the Council, shall develop and
maintain independent analytical capabilities and computing
resources to develop and maintain metrics and reporting
systems for risks to the financial stability of the United
States.
(c) Reporting Responsibilities.--
(1) Required reports.--Not later than 2 years after the
date of enactment of this Act, and not later than 120 days
after the end of each fiscal year thereafter, the Office
shall prepare and submit a report to Congress.
(2) Content.--Each report required by this subsection shall
assess the state of the United States financial system,
including--
(A) an analysis of any threats to the financial stability
of the United States;
(B) the status of the efforts of the Office in meeting the
mission of the Office; and
(C) key findings from the research and analysis of the
financial system by the Office.

SEC. 155. TRANSITION OVERSIGHT.

(a) Purpose.--The purpose of this section is to ensure that
the Office--
(1) has an orderly and organized startup;
(2) attracts and retains a qualified workforce; and
(3) establishes comprehensive employee training and
benefits programs.
(b) Reporting Requirement.--
(1) In general.--The Office shall submit an annual report
to the Committee on Banking, Housing, and Urban Affairs of
the Senate and the Committee on Financial Services of the
House of Representatives that includes the plans described in
paragraph (2).
(2) Plans.--The plans described in this paragraph are as
follows:
(A) Training and workforce development plan.--The Office
shall submit a training and workforce development plan that
includes, to the extent practicable--
(i) identification of skill and technical expertise needs
and actions taken to meet those requirements;
(ii) steps taken to foster innovation and creativity;

[[Page S3214]]

(iii) leadership development and succession planning; and
(iv) effective use of technology by employees.
(B) Recruitment and retention plan.--The Office shall
submit a recruitment and retention plan that includes, to the
extent practicable, provisions relating to--
(i) the steps necessary to target highly qualified
applicant pools with diverse backgrounds;
(ii) streamlined employment application processes;
(iii) the provision of timely notification of the status of
employment applications to applicants; and
(iv) the collection of information to measure indicators of
hiring effectiveness.
(c) Rule of Construction.--Nothing in this section may be
construed to affect--
(1) a collective bargaining agreement, as that term is
defined in section 7103(a)(8) of title 5, United States Code,
that is in effect on the date of enactment of this Act; or
(2) the rights of employees under chapter 71 of title 5,
United States Code.

Subtitle C--Additional Board of Governors Authority for Certain Nonbank
Financial Companies and Bank Holding Companies

SEC. 161. REPORTS BY AND EXAMINATIONS OF NONBANK FINANCIAL
COMPANIES BY THE BOARD OF GOVERNORS.

(a) Reports.--
(1) In general.--The Board of Governors may require each
nonbank financial company supervised by the Board of
Governors, and any subsidiary thereof, to submit reports
under oath, to keep the Board of Governors informed as to--
(A) the financial condition of the company or subsidiary,
systems of the company or subsidiary for monitoring and
controlling financial, operating, and other risks, and the
extent to which the activities and operations of the company
or subsidiary pose a threat to the financial stability of the
United States; and
(B) compliance by the company or subsidiary with the
requirements of this subtitle.
(2) Use of existing reports and information.--In carrying
out subsection (a), the Board of Governors shall, to the
fullest extent possible, use--
(A) reports and supervisory information that a nonbank
financial company or subsidiary thereof has been required to
provide to other Federal or State regulatory agencies;
(B) information otherwise obtainable from Federal or State
regulatory agencies;
(C) information that is otherwise required to be reported
publicly; and
(D) externally audited financial statements of such company
or subsidiary.
(3) Availability.--Upon the request of the Board of
Governors, a nonbank financial company supervised by the
Board of Governors, or a subsidiary thereof, shall promptly
provide to the Board of Governors any information described
in paragraph (2).
(b) Examinations.--
(1) In general.--Subject to paragraph (2), the Board of
Governors may examine any nonbank financial company
supervised by the Board of Governors and any subsidiary of
such company, to determine--
(A) the nature of the operations and financial condition of
the company and such subsidiary;
(B) the financial, operational, and other risks within the
company that may pose a threat to the safety and soundness of
such company or to the financial stability of the United
States;
(C) the systems for monitoring and controlling such risks;
and
(D) compliance by the company with the requirements of this
subtitle.
(2) Use of examination reports and information.--For
purposes of this subsection, the Board of Governors shall, to
the fullest extent possible, rely on reports of examination
of any depository institution subsidiary or functionally
regulated subsidiary made by the primary financial regulatory
agency for that subsidiary, and on information described in
subsection (a)(2).
(c) Coordination With Primary Financial Regulatory
Agency.--The Board of Governors shall--
(1) provide to the primary financial regulatory agency for
any company or subsidiary, reasonable notice before requiring
a report, requesting information, or commencing an
examination of such subsidiary under this section; and
(2) avoid duplication of examination activities, reporting
requirements, and requests for information, to the extent
possible.

SEC. 162. ENFORCEMENT.

(a) In General.--Except as provided in subsection (b), a
nonbank financial company supervised by the Board of
Governors and any subsidiaries of such company (other than
any depository institution subsidiary) shall be subject to
the provisions of subsections (b) through (n) of section 8 of
the Federal Deposit Insurance Act (12 U.S.C. 1818), in the
same manner and to the same extent as if the company were a
bank holding company, as provided in section 8(b)(3) of the
Federal Deposit Insurance Act (12 U.S.C. 1818(b)(3)).
(b) Enforcement Authority for Functionally Regulated
Subsidiaries.--
(1) Referral.--If the Board of Governors determines that a
condition, practice, or activity of a depository institution
subsidiary or functionally regulated subsidiary of a nonbank
financial company supervised by the Board of Governors does
not comply with the regulations or orders prescribed by the
Board of Governors under this Act, or otherwise poses a
threat to the financial stability of the United States, the
Board of Governors may recommend, in writing, to the primary
financial regulatory agency for the subsidiary that such
agency initiate a supervisory action or enforcement
proceeding. The recommendation shall be accompanied by a
written explanation of the concerns giving rise to the
recommendation.
(2) Back-up authority of the board of governors.--If,
during the 60-day period beginning on the date on which the
primary financial regulatory agency receives a recommendation
under paragraph (1), the primary financial regulatory agency
does not take supervisory or enforcement action against a
subsidiary that is acceptable to the Board of Governors, the
Board of Governors (upon a vote of its members) may take the
recommended supervisory or enforcement action, as if the
subsidiary were a bank holding company subject to supervision
by the Board of Governors.

SEC. 163. ACQUISITIONS.

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

SEC. 164. PROHIBITION AGAINST MANAGEMENT INTERLOCKS BETWEEN
CERTAIN FINANCIAL COMPANIES.

A nonbank financial company supervised by the Board of
Governors shall be treated as a bank holding company for
purposes of the Depository Institutions Management Interlocks
Act (12 U.S.C. 3201 et seq.), except that the Board of
Governors shall not exercise the authority provided in
section 7 of that Act (12 U.S.C. 3207) to permit service by a
management official of a nonbank financial company supervised
by the Board of Governors as a management official of any
bank holding company with total consolidated assets equal to
or greater than $50,000,000,000, or other nonaffiliated
nonbank financial company supervised by the Board of
Governors (other than to provide a temporary exemption for
interlocks resulting from a merger, acquisition, or
consolidation).

SEC. 165. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR
NONBANK FINANCIAL COMPANIES SUPERVISED BY THE
BOARD OF GOVERNORS AND CERTAIN BANK HOLDING
COMPANIES.

(a) In General.--
(1) Purpose.--In order to prevent or mitigate risks to the
financial stability of the United States that could arise
from the material financial distress or failure of large,
interconnected financial institutions, the Board of Governors
shall, on its own or pursuant to recommendations by the
Council under section 115, establish prudential standards and
reporting and disclosure requirements applicable to nonbank
financial companies supervised by the Board of Governors and
large, interconnected bank holding companies that--
(A) are more stringent than the standards and requirements
applicable to nonbank financial companies and bank holding
companies that do not present similar risks to the financial
stability of the United States; and
(B) increase in stringency, based on the considerations
identified in subsection (b)(3).
(2) Limitation on bank holding companies.--Any standards
established under subsections (b) through (f) shall not apply
to

[[Page S3215]]

any bank holding company with total consolidated assets of
less than $50,000,000,000, but the Board of Governors may
establish an asset threshold greater than $50,000,000,000 for
the applicability of any particular standard under
subsections (b) through (f).
(b) Development of Prudential Standards.--
(1) In general.--
(A) Required standards.--The Board of Governors shall, by
regulation or order, establish prudential standards for
nonbank financial companies supervised by the Board of
Governors and bank holding companies described in subsection
(a), that shall include--
(i) risk-based capital requirements;
(ii) leverage limits;
(iii) liquidity requirements;
(iv) resolution plan and credit exposure report
requirements; and
(v) concentration limits.
(B) Additional standards authorized.--The Board of
Governors may, by regulation or order, establish prudential
standards for nonbank financial companies supervised by the
Board of Governors and bank holding companies described in
subsection (a), that include--
(i) a contingent capital requirement;
(ii) enhanced public disclosures; and
(iii) overall risk management requirements.
(2) Prudential standards for foreign financial companies.--
In applying the standards set forth in paragraph (1) to
foreign nonbank financial companies supervised by the Board
of Governors and to foreign-based bank holding companies, the
Board of Governors shall give due regard to the principle of
national treatment and competitive equity.
(3) Considerations.--In prescribing prudential standards
under paragraph (1), the Board of Governors shall--
(A) take into account differences among nonbank financial
companies supervised by the Board of Governors and bank
holding companies described in subsection (a), based on--
(i) the factors described in subsections (a) and (b) of
section 113;
(ii) whether the company owns an insured depository
institution;
(iii) nonfinancial activities and affiliations of the
company; and
(iv) any other factors that the Board of Governors
determines appropriate;
(B) to the extent possible, ensure that small changes in
the factors listed in subsections (a) and (b) of section 113
would not result in sharp, discontinuous changes in the
prudential standards established under paragraph (1) of this
subsection; and
(C) take into account any recommendations of the Council
under section 115.
(4) Report.--The Board of Governors shall submit an annual
report to Congress regarding the implementation of the
prudential standards required pursuant to paragraph (1),
including the use of such standards to mitigate risks to the
financial stability of the United States.
(c) Contingent Capital.--
(1) In general.--Subsequent to submission by the Council of
a report to Congress under section 115(c), the Board of
Governors may promulgate regulations that require each
nonbank financial company supervised by the Board of
Governors and bank holding companies described in subsection
(a) to maintain a minimum amount of long-term hybrid debt
that is convertible to equity in times of financial stress.
(2) Factors to consider.--In establishing regulations under
this subsection, the Board of Governors shall consider--
(A) the results of the study undertaken by the Council, and
any recommendations of the Council, under section 115(c);
(B) an appropriate transition period for implementation of
a conversion under this subsection;
(C) the factors described in subsection (b)(3)(A);
(D) capital requirements applicable to the nonbank
financial company supervised by the Board of Governors or a
bank holding company described in subsection (a), and
subsidiaries thereof; and
(E) any other factor that the Board of Governors deems
appropriate.
(d) Resolution Plan and Credit Exposure Reports.--
(1) Resolution plan.--The Board of Governors shall require
each nonbank financial company supervised by the Board of
Governors and bank holding companies described in subsection
(a) to report periodically to the Board of Governors, the
Council, and the Corporation the plan of such company for
rapid and orderly resolution in the event of material
financial distress or failure.
(2) Credit exposure report.--The Board of Governors shall
require each nonbank financial company supervised by the
Board of Governors and bank holding companies described in
subsection (a) to report periodically to the Board of
Governors, the Council, and the Corporation on--
(A) the nature and extent to which the company has credit
exposure to other significant nonbank financial companies and
significant bank holding companies; and
(B) the nature and extent to which other significant
nonbank financial companies and significant bank holding
companies have credit exposure to that company.
(3) Review.--The Board of Governors and the Corporation
shall review the information provided in accordance with this
section by each nonbank financial company supervised by the
Board of Governors and bank holding company described in
subsection (a).
(4) Notice of deficiencies.--If the Board of Governors and
the Corporation jointly determine, based on their review
under paragraph (3), that the resolution plan of a nonbank
financial company supervised by the Board of Governors or a
bank holding company described in subsection (a) is not
credible or would not facilitate an orderly resolution of the
company under title 11, United States Code--
(A) the Board of Governors and the Corporation shall notify
the company, as applicable, of the deficiencies in the
resolution plan; and
(B) the company shall resubmit the resolution plan within a
time frame determined by the Board of Governors and the
Corporation, with revisions demonstrating that the plan is
credible and would result in an orderly resolution under
title 11, United States Code, including any proposed changes
in business operations and corporate structure to facilitate
implementation of the plan.
(5) Failure to resubmit credible plan.--
(A) In general.--If a nonbank financial company supervised
by the Board of Governors or a bank holding company described
in subsection (a) fails to timely resubmit the resolution
plan as required under paragraph (4), with such revisions as
are required under subparagraph (B), the Board of Governors
and the Corporation may jointly impose more stringent
capital, leverage, or liquidity requirements, or restrictions
on the growth, activities, or operations of the company, or
any subsidiary thereof, until such time as the company
resubmits a plan that remedies the deficiencies.
(B) Divestiture.--The Board of Governors and the
Corporation, in consultation with the Council, may direct a
nonbank financial company supervised by the Board of
Governors or a bank holding company described in subsection
(a), by order, to divest certain assets or operations
identified by the Board of Governors and the Corporation, to
facilitate an orderly resolution of such company under title
11, United States Code, in the event of the failure of such
company, in any case in which--
(i) the Board of Governors and the Corporation have jointly
imposed more stringent requirements on the company pursuant
to subparagraph (A); and
(ii) the company has failed, within the 2-year period
beginning on the date of the imposition of such requirements
under subparagraph (A), to resubmit the resolution plan with
such revisions as were required under paragraph (4)(B).
(6) Rules.--Not later than 18 months after the date of
enactment of this Act, the Board of Governors and the
Corporation shall jointly issue final rules implementing this
subsection.
(e) Concentration Limits.--
(1) Standards.--In order to limit the risks that the
failure of any individual company could pose to a nonbank
financial company supervised by the Board of Governors or a
bank holding company described in subsection (a), the Board
of Governors, by regulation, shall prescribe standards that
limit such risks.
(2) Limitation on credit exposure.--The regulations
prescribed by the Board of Governors under paragraph (1)
shall prohibit each nonbank financial company supervised by
the Board of Governors and bank holding company described in
subsection (a) from having credit exposure to any
unaffiliated company that exceeds 25 percent of the capital
stock and surplus (or such lower amount as the Board of
Governors may determine by regulation to be necessary to
mitigate risks to the financial stability of the United
States) of the company.
(3) Credit exposure.--For purposes of paragraph (2),
``credit exposure'' to a company means--
(A) all extensions of credit to the company, including
loans, deposits, and lines of credit;
(B) all repurchase agreements and reverse repurchase
agreements with the company;
(C) all securities borrowing and lending transactions with
the company, to the extent that such transactions create
credit exposure for the nonbank financial company supervised
by the Board of Governors or a bank holding company described
in subsection (a);
(D) all guarantees, acceptances, or letters of credit
(including endorsement or standby letters of credit) issued
on behalf of the company;
(E) all purchases of or investment in securities issued by
the company;
(F) counterparty credit exposure to the company in
connection with a derivative transaction between the nonbank
financial company supervised by the Board of Governors or a
bank holding company described in subsection (a) and the
company; and
(G) any other similar transactions that the Board of
Governors, by regulation, determines to be a credit exposure
for purposes of this section.
(4) Attribution rule.--For purposes of this subsection, any
transaction by a nonbank financial company supervised by the
Board of Governors or a bank holding company described in
subsection (a) with any person is a transaction with a
company, to the extent that the proceeds of the transaction
are used for the benefit of, or transferred to, that company.

[[Page S3216]]

(5) Rulemaking.--The Board of Governors may issue such
regulations and orders, including definitions consistent with
this section, as may be necessary to administer and carry out
this subsection.
(6) Exemptions.--The Board of Governors may, by regulation
or order, exempt transactions, in whole or in part, from the
definition of ``credit exposure'' for purposes of this
subsection, if the Board of Governors finds that the
exemption is in the public interest and is consistent with
the purpose of this subsection.
(7) Transition period.--
(A) In general.--This subsection and any regulations and
orders of the Board of Governors under this subsection shall
not be effective until 3 years after the date of enactment of
this Act.
(B) Extension authorized.--The Board of Governors may
extend the period specified in subparagraph (A) for not
longer than an additional 2 years.
(f) Enhanced Public Disclosures.--The Board of Governors
may prescribe, by regulation, periodic public disclosures by
nonbank financial companies supervised by the Board of
Governors and bank holding companies described in subsection
(a) in order to support market evaluation of the risk
profile, capital adequacy, and risk management capabilities
thereof.
(g) Risk Committee.--
(1) Nonbank financial companies supervised by the board of
governors.--The Board of Governors shall require each nonbank
financial company supervised by the Board of Governors that
is a publicly traded company to establish a risk committee,
as set forth in paragraph (3), not later than 1 year after
the date of receipt of a notice of final determination under
section 113(d)(3) with respect to such nonbank financial
company supervised by the Board of Governors.
(2) Certain bank holding companies.--
(A) Mandatory regulations.--The Board of Governors shall
issue regulations requiring each bank holding company that is
a publicly traded company and that has total consolidated
assets of not less than $10,000,000,000 to establish a risk
committee, as set forth in paragraph (3).
(B) Permissive regulations.--The Board of Governors may
require each bank holding company that is a publicly traded
company and that has total consolidated assets of less than
$10,000,000,000 to establish a risk committee, as set forth
in paragraph (3), as determined necessary or appropriate by
the Board of Governors to promote sound risk management
practices.
(3) Risk committee.--A risk committee required by this
subsection shall--
(A) be responsible for the oversight of the enterprise-wide
risk management practices of the nonbank financial company
supervised by the Board of Governors or bank holding company
described in subsection (a), as applicable;
(B) include such number of independent directors as the
Board of Governors may determine appropriate, based on the
nature of operations, size of assets, and other appropriate
criteria related to the nonbank financial company supervised
by the Board of Governors or a bank holding company described
in subsection (a), as applicable; and
(C) include at least 1 risk management expert having
experience in identifying, assessing, and managing risk
exposures of large, complex firms.
(4) Rulemaking.--The Board of Governors shall issue final
rules to carry out this subsection, not later than 1 year
after the transfer date, to take effect not later than 15
months after the transfer date.
(h) Stress Tests.--The Board of Governors shall conduct
analyses in which nonbank financial companies supervised by
the Board of Governors and bank holding companies described
in subsection (a) are subject to evaluation of whether the
companies have the capital, on a total consolidated basis,
necessary to absorb losses as a result of adverse economic
conditions. The Board of Governors may develop and apply such
other analytic techniques as are necessary to identify,
measure, and monitor risks to the financial stability of the
United States.

SEC. 166. EARLY REMEDIATION REQUIREMENTS.

(a) In General.--The Board of Governors, in consultation
with the Council and the Corporation, shall prescribe
regulations establishing requirements to provide for the
early remediation of financial distress of a nonbank
financial company supervised by the Board of Governors or a
bank holding company described in section 165(a), except that
nothing in this subsection authorizes the provision of
financial assistance from the Federal Government.
(b) Purpose of the Early Remediation Requirements.--The
purpose of the early remediation requirements under
subsection (a) shall be to establish a series of specific
remedial actions to be taken by a nonbank financial company
supervised by the Board of Governors or a bank holding
company described in section 165(a) that is experiencing
increasing financial distress, in order to minimize the
probability that the company will become insolvent and the
potential harm of such insolvency to the financial stability
of the United States.
(c) Remediation Requirements.--The regulations prescribed
by the Board of Governors under subsection (a) shall--
(1) define measures of the financial condition of the
company, including regulatory capital, liquidity measures,
and other forward-looking indicators; and
(2) establish requirements that increase in stringency as
the financial condition of the company declines, including--
(A) requirements in the initial stages of financial
decline, including limits on capital distributions,
acquisitions, and asset growth; and
(B) requirements at later stages of financial decline,
including a capital restoration plan and capital-raising
requirements, limits on transactions with affiliates,
management changes, and asset sales.

SEC. 167. AFFILIATIONS.

(a) Affiliations.--Nothing in this subtitle shall be
construed to require a nonbank financial company supervised
by the Board of Governors, or a company that controls a
nonbank financial company supervised by the Board of
Governors, to conform the activities thereof to the
requirements of section 4 of the Bank Holding Company Act of
1956 (12 U.S.C. 1843).
(b) Requirement.--
(1) In general.--If a nonbank financial company supervised
by the Board of Governors conducts activities other than
those that are determined to be financial in nature or
incidental thereto under section 4(k) of the Bank Holding
Company Act of 1956, the Board of Governors may require such
company to establish and conduct such activities that are
determined to be financial in nature or incidental thereto in
an intermediate holding company established pursuant to
regulation of the Board of Governors, not later than 90 days
after the date on which the nonbank financial company
supervised by the Board of Governors was notified of the
determination under section 113(a).
(2) Internal financial activities.--For purposes of this
subsection, activities that are determined to be financial in
nature or incidental thereto under section 4(k) of the Bank
Holding Company Act of 1956, as described in paragraph (1),
shall not include internal financial activities conducted for
a nonbank financial company supervised by the Board of
Governors or any affiliate, including internal treasury,
investment, and employee benefit functions. With respect to
any internal financial activity of such company during the
year prior to the date of enactment of this Act, such company
may continue to engage in such activity as long as at least
\2/3\ of the assets or \2/3\ of the revenues generated from
the activity are from or attributable to such company,
subject to review by the Board of Governors, to determine
whether engaging in such activity presents undue risk to such
company or to the financial stability of the United States.
(c) Regulations.--The Board of Governors--
(1) shall promulgate regulations to establish the criteria
for determining whether to require a nonbank financial
company supervised by the Board of Governors to establish an
intermediate holding company under subsection (a); and
(2) may promulgate regulations to establish any
restrictions or limitations on transactions between an
intermediate holding company or a nonbank financial company
supervised by the Board of Governors and its affiliates, as
necessary to prevent unsafe and unsound practices in
connection with transactions between such company, or any
subsidiary thereof, and its parent company or affiliates that
are not subsidiaries of such company, except that such
regulations shall not restrict or limit any transaction in
connection with the bona fide acquisition or lease by an
unaffiliated person of assets, goods, or services.

SEC. 168. REGULATIONS.

Except as otherwise specified in this subtitle, not later
than 18 months after the transfer date, the Board of
Governors shall issue final regulations to implement this
subtitle and the amendments made by this subtitle.

SEC. 169. AVOIDING DUPLICATION.

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

SEC. 170. SAFE HARBOR.

(a) Regulations.--The Board of Governors shall promulgate
regulations on behalf of, and in consultation with, the
Council setting forth the criteria for exempting certain
types or classes of U.S. nonbank financial companies or
foreign nonbank financial companies from supervision by the
Board of Governors.
(b) Considerations.--In developing the criteria under
subsection (a), the Board of Governors shall take into
account the factors for consideration described in
subsections (a) and (b) of section 113 in determining whether
a U.S. nonbank financial company or foreign nonbank financial
company shall be supervised by the Board of Governors.
(c) Rule of Construction.--Nothing in this section shall be
construed to require supervision by the Board of Governors of
a U.S. nonbank financial company or foreign nonbank financial
company, if such company does not meet the criteria for
exemption established under subsection (a).
(d) Update.--The Board of Governors shall, in consultation
with the Council, review the regulations promulgated under
subsection (a), not less frequently than every 5 years, and
based upon the review, the Board of Governors may revise such
regulations on behalf

[[Page S3217]]

of, and in consultation with, the Council to update as
necessary the criteria set forth in such regulations.
(e) Transition Period.--No revisions under subsection (d)
shall take effect before the end of the 2-year period after
the date of publication of such revisions in final form.
(f) Report.--The Chairperson of the Board of Governors and
the Chairperson of the Council shall submit a joint report to
the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives not later than 30 days after the date of
the issuance in final form of the regulations under
subsection (a), or any subsequent revision to such
regulations under subsection (d), as applicable. Such report
shall include, at a minimum, the rationale for exemption and
empirical evidence to support the criteria for exemption.
______

SA 3826. Mr. SHELBY (for himself, Mr. McConnell, Mr. Bennett, Mr.
Crapo, Mr. Corker, Mr. Johanns, Mrs. Hutchison, Mr. Vitter, Mr.
Bunning, Mr. Chambliss, Mr. Cornyn, Mr. Bond, Mr. Enzi, and Mr.
Alexander) 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 X and insert the following:

TITLE X--DIVISION FOR CONSUMER FINANCIAL PROTECTION

SEC. 1001. SHORT TITLE.

This title may be cited as the ``Consumer Financial
Protection Act of 2010''.

SEC. 1002. DEFINITIONS.

Except as otherwise provided in this title, for purposes of
this title, the following definitions shall apply:
(1) Covered person.--The term covered person means--
(A) a depository institution; or
(B) a person other than a depository institution that is
subject to one or more of the enumerated consumer protection
statutes.
(2) Designated transfer date.--The term ``designated
transfer date'' means the date established under section
1042.
(3) Division.--The term ``Division'' means the Division for
Consumer Financial Protection.
(4) Enumerated consumer protection statutes.--The term
``enumerated consumer protection statute'' means--
(A) subsections (c) through (f) of section 43 of the
Federal Deposit Insurance Act (12 U.S.C. 1831t);
(B) the Consumer Leasing Act of 1976 (15 U.S.C. 1667 et
seq.);
(C) the Electronic Fund Transfer Act (15 U.S.C. 1693 et
seq.);
(D) the Equal Credit Opportunity Act (15 U.S.C. 1691 et
seq.);
(E) the Fair Credit Billing Act (15 U.S.C. 1666 et seq.);
(F) the Fair Credit Reporting Act (15 U.S.C. 1681 et seq.),
other than sections 615(e) and 628 of that Act (15 U.S.C.
1681m(e), 1681w);
(G) the Homeowners Protection Act of 1998 (12 U.S.C. 4901,
et seq.);
(H) the Fair Debt Collection Practices Act (15 U.S.C. 1692
et seq.);
(I) sections 502 through 509 of the Gramm-Leach-Bliley Act
(15 U.S.C. 6802-6809);
(J) the Home Mortgage Disclosure Act of 1975 (12 U.S.C.
2801 et seq.);
(K) the Home Ownership and Equity Protection Act of 1994
(15 U.S.C. 1601 note);
(L) the Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2601 et seq.);
(M) the S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C.
5101 et seq.);
(N) the Truth in Lending Act (15 U.S.C. 1601 et seq.);
(O) the Truth in Savings Act (12 U.S.C. 4301 et seq.); and
(P) the authority of the Federal Trade Commission, the
Board of Governors, the Office of Thrift Supervision, and the
National Credit Union Administration to prohibit unfair or
deceptive acts or practices under section 18(f) of the
Federal Trade Commission Act (15 U.S.C. 57a(f))--
(i) only to the same extent that the Board of Governors,
the Office of Thrift Supervision, the National Credit Union
Administration, and the Federal Trade Commission could
exercise such authority over covered persons on the day
before the designated transfer date; and
(ii) except that such authority shall not extend to persons
or activities covered under the Fair Credit Reporting Act
that do not meet the definition in section 603(p) of the Fair
Credit Reporting Act (15 U.S.C. 1681a(p)).
(5) Mortgage loan originator.--The term ``mortgage loan
originator'' means any person (other than an individual) that
takes applications for residential mortgage transactions and
offers or negotiates terms of residential mortgage
transactions.
(6) Nondepository covered person.--The term ``nondepository
covered person'' means any entity that--
(A) is not a depository institution;
(B) is not an affiliate or subsidiary of a depository
institution;
(C) is not subject to supervision or enforcement by a
Federal banking regulator; and
(D) is a financial services provider subject to the
enumerated consumer protection statutes.
(7) Person.--The term ``person'' has the same meaning as in
section 103 of the Truth in Lending Act (15 U.S.C. 1602).
(8) Prudential regulator.--The term ``prudential
regulator'' means the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, or the
National Credit Union Administration, as appropriate, with
respect to depository institutions and affiliates of
depository institutions supervised by such agencies.
(9) Residential mortgage transaction.--The term
``residential mortgage transaction'' has the same meaning as
in section 103 of the Truth in Lending Act (15 U.S.C. 1602).

Subtitle A--Division of Consumer Protection

SEC. 1011. ESTABLISHMENT OF THE DIVISION.

(a) Division Established.--There is established within the
Federal Deposit Insurance Corporation the Division for
Consumer Protection, which shall regulate, by rule or order,
consumer financial products and services under the enumerated
consumer protection statutes, and where applicable, as
provided for in section 1024, enforce the enumerated consumer
protection statutes.
(b) Director and Deputy Director.--
(1) Director.--The Division shall be headed by a Director,
who shall be appointed by the President, by and with the
advice and consent of the Senate, to serve for a term of 4
years.
(2) Deputy director.--The Director shall designate a Deputy
Director.
(3) Acting director.--In the event of a vacancy in the
position of the Director or during the absence or disability
of the Director, the Deputy Director shall act as Director.
(4) Compensation.--The Director shall be compensated at a
rate prescribed for level II of the Executive Schedule under
section 5313 of title 5, United States Code.

SEC. 1012. ADMINISTRATION.

(a) Specific Functional Units.--
(1) Research.--The Director shall establish a unit, the
functions of which shall include researching, analyzing, and
reporting on--
(A) developments in markets for consumer financial products
or services, including market areas of alternative consumer
financial products or services with high growth rates and
areas of risk to consumers;
(B) consumer awareness, understanding, and use of
disclosures and communications regarding consumer financial
products or services; and
(C) consumer awareness and understanding of costs, risks,
and benefits of consumer financial products or services.
(2) Collecting and tracking complaints.--
(A) In general.--The Director shall establish a unit, the
functions of which shall include establishing a single, toll-
free telephone number, a website, and database to facilitate
the centralized collection, monitoring, and response to
consumer complaints regarding consumer financial products or
services. The Director shall coordinate with other Federal
agencies to route complaints to other Federal regulators,
where appropriate.
(B) Routing calls to states.--To the extent practicable,
State agencies may receive appropriate complaints from the
systems established under subparagraph (A), if--
(i) the State agency system has the functional capacity to
receive calls or electronic reports routed by the Division
systems; and
(ii) the State agency has satisfied any conditions of
participation in the system that the Division may establish,
including treatment of personally identifiable information
and sharing of information on complaint resolution or related
compliance procedures and resources.
(C) Reports to congress.--The Director shall present an
annual report to Congress, not later than March 31 of each
year on the complaints received by the Division in the prior
year regarding consumer financial products and services. Such
report shall include information and analysis about complaint
numbers, types, and, where applicable, information about
resolution of complaints.
(D) Data sharing required.--To facilitate preparation of
the reports required under subparagraph (C), supervision and
enforcement activities, and monitoring of the market for
consumer financial products and services, the Division shall
share consumer complaint information with prudential
regulators, other Federal agencies, and State agencies,
consistent with Federal law applicable to personally
identifiable information. The prudential regulators and other
Federal agencies shall share data relating to consumer
complaints regarding consumer financial products and services
with the Division, consistent with Federal law applicable to
personally identifiable information.
(b) Office of Financial Literacy.--
(1) Establishment.--The Division shall establish an Office
of Financial Literacy, which shall be responsible for
developing and implementing initiatives intended to educate
and empower consumers to make better informed financial
decisions. The Director shall serve as the Vice Chairperson
on the

[[Page S3218]]

Financial Literacy and Education Commission established under
section 513 of the Financial Literacy and Education
Improvement Act (20 U.S.C. 9702).
(2) Other duties.--The Office of Financial Literacy shall
develop and implement a strategy to improve financial
literacy, consistent with the National Strategy for Financial
Education.
(3) Coordination.--The Office of Financial Literacy shall
coordinate with other units within the Division in carrying
out its functions, including working with the research unit
established by the Director to conduct research related to
consumer financial education and counseling.
(4) Report.--Not later than 24 months after the designated
transfer date, and annually thereafter, the Director shall
submit a report on its financial literacy activities and
strategy to improve financial literacy of consumers to--
(A) the Committee on Banking, Housing, and Urban Affairs of
the Senate; and
(B) the Committee on Financial Services of the House of
Representatives.

SEC. 1013. CONSUMER ADVISORY BOARD.

(a) Establishment Required.--The Director shall establish a
Consumer Advisory Board to advise and consult with the
Division in the exercise of its functions under this title,
the enumerated consumer protection statutes, and to provide
information on emerging practices in the consumer financial
products or services industry, including regional trends,
concerns, and other relevant information.
(b) Membership.--In appointing the members of the Consumer
Advisory Board, the Director shall seek to assemble experts
in consumer protection, financial services, and consumer
financial products or services and seek representation of the
interests of nondepository covered persons and consumers,
without regard to party affiliation. Not fewer than 6 members
shall be appointed upon the recommendation of the regional
Federal Reserve Bank Presidents, on a rotating basis.
(c) Meetings.--The Consumer Advisory Board shall meet from
time to time at the call of the Director, but not less
frequently than twice in each year.
(d) Compensation and Travel Expenses.--Members of the
Consumer Advisory Board who are not full-time employees of
the United States shall be allowed travel expenses, including
transportation and subsistence, while away from their homes
or regular places of business.

SEC. 1014. COORDINATION.

The Director shall coordinate with other Federal agencies
and State regulators, as appropriate, to promote consistent
regulatory treatment of consumer financial and investment
products and services.

SEC. 1015. FUNDING.

(a) Fees and Assessments.--
(1) In general.--The Chairperson shall establish, by rule,
an assessment schedule, including the assessment base and
rates, applicable to covered persons subject to section 1023
to recover the costs of the Corporation in carrying out its
responsibilities described under this title. The Chairperson
may, by rule or other action, impose additional assessments
on insured depository institutions to regulate consumer
financial products and services under the enumerated consumer
protection statutes specified in this title.
(2) Limitation.--The assessments imposed by the Chairperson
by rules established pursuant to paragraph (1) shall not
exceed the costs reasonably necessary to cover the expenses
associated with carrying outs its supervisory and rulemaking
responsibilities under this title.
(b) Fund Established.--
(1) In general.--There is established in the Treasury of
the United States, a separate account, to be known as the
Consumer Financial Protection Fund (referred to in this title
as the ``CFP Fund''). Fees and assessments collected under
subsection (a) shall be deposited into the CFP Fund.
(2) Rule of construction.--Any amounts deposited into the
CFP Fund may not be construed to be Government funds or
appropriated monies.
(3) No apportionment.--Any amounts deposited into the CFP
Fund shall not be subject to apportionment for the purpose of
chapter 15 of title 31, United States Code, or under any
other authority.
(4) Use of funds.--Funds in the CFP Fund shall be
immediately available to the Corporation and under the
control of the Corporation, and shall remain available until
expended, to pay the expenses of the Corporation in carrying
out its duties and responsibilities pursuant to this title.
(c) Conforming Amendments.--Section 11(a)(4)(A) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(a)(4)(A)) is
amended--
(1) in clause (ii), by striking ``and'' at the end;
(2) by redesignating clause (iii) as clause (iv); and
(3) by inserting after clause (ii) the following:
``(iii) to carry out additional duties pursuant to the
Consumer Financial Protection Act of 2010; and''.
(d) Funding.--The Chairperson shall dedicate not less than
10 percent of the annual estimated budget of the Corporation,
excluding any funding provided pursuant to section 11(c) of
the Federal Deposit Insurance Act (12 U.S.C. 1821(c)), to
carry out the requirements specified in this title.

SEC. 1016. APPEARANCES BEFORE AND REPORTS TO CONGRESS.

(a) Appearances Before Congress.--The Director shall appear
before the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the
House of Representatives at semi-annual hearings regarding
the reports required under subsection (b).
(b) Reports Required.--The Director shall, concurrent with
each semi-annual hearing referred to in subsection (a),
prepare and submit to the President and to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives, a report, beginning with the session
following the designated transfer date.
(c) Contents.--The reports required by subsection (b) shall
include--
(1) a discussion of the significant problems faced by
consumers in shopping for or obtaining consumer financial
products or services;
(2) a justification of the budget request of the previous
year;
(3) a list of the significant rules and orders adopted by
the Corporation, as well as other significant initiatives
conducted by the Division, during the preceding year and the
plan of the Division for rules, orders, or other initiatives
to be undertaken during the upcoming period;
(4) an analysis of complaints about consumer financial
products or services that the Division, in consultation with
the Federal Trade Commission has received and collected in
its central database on complaints during the preceding year;
(5) a list, with a brief statement of the issues, of the
public supervisory and enforcement actions to which the
Division was a party during the preceding year; and
(6) the actions taken regarding rules, orders, and
supervisory actions with respect to nondepository covered
persons which are not credit unions or depository
institutions.

SEC. 1017. EFFECTIVE DATE.

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

Subtitle B--General Powers of the Division

SEC. 1021. PURPOSE, OBJECTIVES, AND FUNCTIONS.

(a) Purpose.--The Division shall seek to implement and,
where applicable, enforce the enumerated consumer protection
statutes consistently for the purpose of ensuring that
markets for consumer financial products and services are
fair, transparent, and competitive.
(b) Objectives.--The Division is authorized to exercise its
authorities under the enumerated consumer protection statutes
for the purposes of ensuring that, with respect to consumer
financial products and services--
(1) consumers are provided with timely and understandable
information to make responsible decisions about financial
transactions;
(2) consumers are protected from unfair or deceptive acts
and practices;
(3) outdated, unnecessary, or unduly burdensome regulations
are regularly identified and addressed in order to reduce
unwarranted regulatory burdens; and
(4) enumerated consumer protection statutes are enforced
consistently, without regard to the status of a person as a
depository institution, in order to ensure uniform consumer
protection in the marketplace.
(c) Functions.--The primary functions of the Division are--
(1) issuing rules, orders and guidance implementing the
enumerated consumer protection statutes;
(2) collecting, investigating, and responding to consumer
complaints;
(3) collecting, researching, and publishing information
relevant to the functioning of markets for consumer financial
products and services to identify risks to consumers, and the
proper functioning of such markets;
(4) subject to section 1023, supervising nondepository
covered persons for compliance with the enumerated consumer
protection statutes, and taking appropriate enforcement
action to address violations of the enumerated consumer
protection statutes;
(5) conducting financial education programs; and
(6) performing such support activities as may be necessary
or useful to facilitate the other functions of the Division.

SEC. 1022. RULEMAKING AUTHORITY.

(a) In General.--The Division is authorized to exercise its
authorities under the enumerated consumer protection statutes
to implement the provisions of the enumerated consumer
protection statutes.
(b) Rulemaking, Orders, and Guidance.--
(1) In general.--The Division may prescribe rules and issue
orders and guidance, as may be necessary or appropriate to
enable the Division to administer and carry out the
enumerated consumer protection statutes, and to prevent
evasions thereof.
(2) Exclusive rulemaking authority.--Notwithstanding any
other provisions of Federal law, to the extent that a
provision of the enumerated consumer protection statutes
authorizes the Division and another Federal agency to issue
regulations under that provision of law for purposes of
assuring compliance with the enumerated consumer protection
statutes, the Division shall have the exclusive authority to
prescribe rules pursuant to those provisions of law, with
respect to compliance with those provisions of law by covered
persons.
(3) Corporation approval required.--No rule or regulation
of the Division may become effective with respect to any
person,

[[Page S3219]]

unless approved by majority vote of the members of the Board
of Directors of the Corporation.
(c) Preservation of State Regulation of Insurance.--Nothing
in this title shall abrogate or limit in any way section 2 of
the Act of March 9, 1945 (15 U.S.C. 1012) or otherwise grant
the Division authority over the business of insurance.
(d) Limitation on Authority of Division.--The Division
shall have no authority to issue rules, regulations, orders,
or guidance that affect any underwriting standards of
depository institutions or affiliates thereof.

SEC. 1023. SUPERVISION OF NONDEPOSITORY COVERED PERSONS.

(a) Applicability.--
(1) Covered persons.--
(A) Applicability.--
(i) In general.--Except as provided in paragraph (2), this
section shall apply to any person that is--

(I) a type or category of mortgage loan originator that the
Division, in consultation with the Federal Trade Commission,
determines by rule is subject to the requirements of this
section; or
(II) a nondepository covered person that demonstrates a
pattern or practice of violations of the enumerated consumer
protection statutes, that the Division, in consultation with
the Federal Trade Commission, determines by order, after
notice and opportunity for response, is subject to the
requirements of this section.

(ii) Rule of construction.--On and after the effective date
of this section, the Division may consider violations which
occurred during the previous 3 years in making a
determination that a nondepository covered person shall be
subject to this section.
(B) Factors for consideration.--In determining whether a
mortgage loan originator is subject to the requirements of
this section, the Division shall consider the risks to
consumers created by the provision of such consumer financial
products or services and the probability that supervision can
serve to diminish such risks. In making these determinations,
the Division shall consider--
(i) the total financial assets of the mortgage loan
originator;
(ii) the volume of transactions involving consumer
financial products or service in which the mortgage loan
originator engages;
(iii) the complexity and nature of the financial products
or services offered by the mortgage loan originator; and
(iv) the number and nature of any violations of the
enumerated consumer protections statutes by the mortgage loan
originator.
(C) Rule of construction.--Nothing in this section may be
construed to prohibit the Division from exempting any class
of mortgage loan originator or any specific mortgage loan
originator from the requirements of this section.
(2) Certain persons excluded.--This section shall not apply
to persons described in section 1024.
(b) Supervision.--
(1) In general.--The Division shall require reports and
conduct examinations on a periodic basis of persons described
in subsection (a) for purposes of--
(A) assessing compliance with the requirements of the
enumerated consumer protection statutes;
(B) obtaining information about the activities and
compliance systems or procedures of such person; and
(C) detecting and assessing risks to consumers and to
markets for consumer financial products and services.
(2) Risk-based supervision program.--The Division shall
exercise its authority under paragraph (1) in a manner
designed to ensure that such exercise, with respect to
persons described in subsection (a), is based on the
assessment by the Division of the risks posed to consumers,
and taking into consideration, as applicable--
(A) the volume of transactions involving consumer financial
products or services in which the persons described in
subsection (a) engage;
(B) the number and nature of any violations of the
enumerated consumer protection statutes on the part of the
persons described in subsection (a); and
(C) the extent to which such institutions are subject to
oversight by State authorities for consumer protection.
(3) Coordination.--To minimize regulatory burden, the
Division shall coordinate its supervisory activities with the
supervisory activities conducted by Federal regulators and
the State regulatory authorities, including establishing
their respective schedules for examining persons described in
subsection (a) and requirements regarding reports to be
submitted by such persons.
(4) Use of existing reports.--The Division shall, to the
fullest extent possible, use--
(A) reports pertaining to persons described in subsection
(a) that have been provided to a Federal or State agency; and
(B) information that has been reported publicly.
(5) Preservation of authority.--The authority of the
Chairperson to require reports from persons described in
subsection (a), as permitted under paragraph (1), regarding
information under the control of such person, including the
authority to require reports when such information is
maintained, stored, or processed by another person.
(6) Reports of tax law noncompliance.--The Division shall
provide the Commissioner of Internal Revenue with any report
of examination or related information identifying possible
tax law noncompliance.
(7) Registration, recordkeeping and other requirements for
certain persons.--
(A) In general.--The Division shall prescribe rules to
facilitate supervision of persons described in subsection (a)
and assessment and detection of risks to consumers.
(B) Registration.--
(i) In general.--The Division shall prescribe rules
regarding registration requirements for persons described in
subsection (a).
(ii) Exception for related persons.--The Division may not
impose requirements under this section regarding the
registration of a related person.
(iii) Registration information.--Subject to rules
prescribed by the Division, the Division shall publicly
disclose the registration information about persons described
in subsection (a) to facilitate the ability of consumers to
identify persons described in subsection (a) registered with
the Division.
(C) Recordkeeping.--The Division may require a person
described in subsection (a), to generate, provide, or retain
records for the purposes of facilitating supervision of such
persons and assessing and detecting risks to consumers.
(D) Requirements concerning obligations.--The Division may
prescribe rules regarding a person described in subsection
(a), to ensure that such persons are legitimate entities and
are able to perform their obligations to consumers.
(E) Consultation with state agencies.--In developing and
implementing requirements under this paragraph, the Division
shall consult with State regulatory authorities regarding
requirements or systems (including coordinated or combined
systems for registration), where appropriate.
(c) Primary Enforcement Authority.--
(1) The division to have primary enforcement authority.--To
the extent that a Federal law authorizes the Division and
another Federal agency, other than the Federal Trade
Commission, to enforce an enumerated consumer protection
statute, the Division shall have exclusive authority to
enforce that enumerated consumer protection statute with
respect to any person described in subsection (a)(1)(A).
(2) Referral.--Any Federal agency authorized to enforce an
enumerated consumer protection statute may recommend in
writing to the Division that the Division initiate an
enforcement proceeding, as the Division is authorized by that
statute or by this title.
(3) Coordination with the federal trade commission.--
(A) In general.--The Division and the Federal Trade
Commission shall coordinate enforcement actions for
violations of Federal law regarding the offering or provision
of consumer financial products or services by any person
described in subsection (a)(1)(A), or service providers
thereto. In carrying out this subparagraph, the agencies
shall negotiate an agreement to establish procedures for such
coordination, including procedures for notice to the other
agency, where feasible, prior to initiating a civil action to
enforce a Federal law regarding the offering or provision of
consumer financial products or services.
(B) Civil actions.--Whenever a civil action has been filed
by, or on behalf of, the Division or the Federal Trade
Commission for any violation of any provision of Federal law
described in subparagraph (A), or any regulation prescribed
under such provision of law--
(i) the other agency may not, during the pendency of that
action, institute a civil action under such provision of law
against any defendant named in the complaint in such pending
action for any violation alleged in the complaint; and
(ii) the Division or the Federal Trade Commission may
intervene as a party in any such action brought by the other
agency, and, upon intervening--

(I) be heard on all matters arising in such enforcement
action; and
(II) file petitions for appeal in such actions.

(C) Agreement terms.--The terms of any agreement negotiated
under subparagraph (A) may modify or supersede the provisions
of subparagraph (B).
(D) Deadline.--The agencies shall reach the agreement
required under subparagraph (A) not later than 6 months after
the designated transfer date.
(4) Savings provision.--Except as specifically stated in
this title regarding the enumerated consumer protection
statutes, nothing in this title shall be construed as
modifying, limiting, or otherwise affecting the authority of
the Federal Trade Commission under the Federal Trade
Commission Act, or any other provision of law.
(d) Exclusive Rulemaking and Examination Authority.--To the
extent that Federal law authorizes the Division and another
Federal agency to issue regulations or guidance, conduct
examinations, or require reports from a person described in
subsection (a) under that provision of law for purposes of
assuring compliance with the enumerated consumer protection
statutes and any regulations thereunder, the Division shall
have the exclusive authority to prescribe rules, issue
guidance, conduct examinations, require reports, or issue
exemptions with regard to a person described in subsection
(a), subject to those provisions of law.
(e) Service Providers.--A service provider to a person
described in subsection (a) shall be subject to the authority
of the Division under this section, to the same extent as if

[[Page S3220]]

such service provider were engaged in a service relationship
with a bank, and the Division were an appropriate Federal
banking agency under section 7(c) of the Bank Service Company
Act (12 U.S.C. 1867(c)). For purposes of this subsection, a
service provider shall not include persons described in
section 1024.
(f) Enforcement Authority.--The Division may enforce the
requirements of this title with respect to persons described
in subsection (a) pursuant to section 8 of the Federal
Deposit Insurance Act (12 U.S.C. 1818), as if such person
were an insured depository institution.

SEC. 1024. SUPERVISION AND ENFORCEMENT ON CONSUMER
PROTECTION.

The Division shall have no authority to require reports
from, conduct examinations of, or take enforcement action
against an insured depository institution or any affiliate
thereof. The authorities of the Division and the Director
under this title do not alter or affect the authority of the
prudential regulators to require reports from, conduct
examinations of, or take enforcement action against an
insured depository institution or any affiliate thereof for
purposes of assessing and enforcing compliance by such person
with the requirements of the enumerated consumer protection
statutes and obtaining information about the activities
subject to such law and the associated compliance systems or
procedures of such institution or affiliate.

SEC. 1025. DISCLOSURES.

(a) In General.--To the extent that the enumerated consumer
protection statutes require disclosures to consumers, the
Division shall prescribe rules to ensure that such
disclosures make timely, appropriate, and effective
disclosures to consumers of the costs, benefits, and risks
associated with the product or service.
(b) Model Disclosures.--
(1) In general.--Any final rule prescribed by the Division
under this section requiring disclosures may include a model
form that may be used.
(2) Format.--A model form issued pursuant to paragraph (1)
shall contain a clear and conspicuous disclosure that, at a
minimum--
(A) uses plain language comprehensible to consumers;
(B) contains a clear format and design, such as an easily
readable type font; and
(C) succinctly explains the information that must be
communicated to the consumer.
(3) Consumer testing.--Any model form issued by the
Division shall be validated through consumer testing.
(c) Basis for Rulemaking.--In prescribing disclosure rules,
the Division shall consider available evidence about consumer
awareness, understanding of, and responses to disclosures or
communications about the risks, costs, and benefits of
consumer financial products or services.
(d) Safe Harbor.--Any person that uses a model form issued
by the Division shall be deemed to be in compliance with the
disclosure requirements of this section with respect to such
model form.
(e) Trial Disclosure Programs.--
(1) In general.--The Division may permit a person to
conduct a trial program that is limited in time and scope,
subject to specified standards and procedures, for the
purpose of providing trial disclosures to consumers that are
designed to improve upon any model form issued by the
Division.
(2) Safe harbor.--The standards and procedures issued by
the Division shall be designed to encourage persons to
conduct trial disclosure programs. For the purposes of
administering this subsection, the Division may establish a
limited period during which a person conducting a trial
disclosure program shall be deemed to be in compliance with,
or may be exempted from, a requirement of a rule or an
enumerated consumer protection statute.
(3) Public disclosure.--The rules of the Division shall
provide for public disclosure of trial disclosure programs,
which public disclosure may be limited, to the extent
necessary to encourage nondepository covered persons to
conduct effective trials.

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

SEC. 1041. TRANSFER OF CONSUMER FINANCIAL PROTECTION
FUNCTIONS.

(a) Defined Terms.--For purposes of this subtitle--
(1) the term ``consumer financial protection functions''
means--
(A) the functions and authorities of the Board of Governors
under the enumerated consumer protection statutes, except
those functions retained by the prudential regulators under
section 1024; and
(B) the functions and authorities of the Federal Trade
Commission under the enumerated consumer laws with respect to
persons subject to the jurisdiction of the Division under
section 1023, except that the Federal Trade Commission shall
retain concurrent enforcement jurisdiction under the
enumerated consumer protection statutes over such persons,
consistent with subsection 1023(c); and
(2) the terms ``transferor agency'' and ``transferor
agencies'' mean, respectively the Board of Governors and the
Federal Trade Commission.
(b) In General.--Except as provided in subsection (c),
consumer financial protection functions are transferred as
follows:
(1) Board of governors.--
(A) Transfer of functions.--All consumer financial
protection functions of the Board of Governors are
transferred to the Division.
(B) Board of governors authority.--The Division shall have
all powers and duties that were vested in the Board of
Governors, relating to consumer financial protection
functions, on the day before the designated transfer date.
(2) Federal trade commission.--
(A) Transfer of functions.--All consumer financial
protection functions of the Federal Trade Commission are
transferred to the Division. Nothing in this title shall be
construed to require a mandatory transfer of any employee of
the Federal Trade Commission to the Division.
(B) Commission authority.--The Division shall have all
powers and duties that were vested in the Federal Trade
Commission relating to consumer financial protection
functions on the day before the designated transfer date.
(c) Transfers of Functions Subject to Examination and
Enforcement Authority Remaining With Transferor Agencies.--
The transfers of functions in subsection (b) do not affect
the authority of the prudential regulators from conducting
examinations or initiating and maintaining enforcement
proceedings in accordance with section 1023.
(d) Effective Date.--Subsections (b) and (c) shall become
effective on the designated transfer date.

SEC. 1042. DESIGNATED TRANSFER DATE.

(a) In General.--Not later than 60 days after the date of
enactment of this Act, the Secretary shall--
(1) in consultation with the Chairman of the Board of
Governors, the Chairperson of the Corporation, the Chairman
of the Federal Trade Commission, the Chairman of the National
Credit Union Administration Board, the Comptroller of the
Currency, the Director of the Office of Thrift Supervision,
the Secretary of the Department of Housing and Urban
Development, and the Director of the Office of Management and
Budget, designate a single calendar date for the transfer of
functions to the Division under section 1041; and
(2) publish notice of that designated date in the Federal
Register.
(b) Changing Designation.--The Secretary--
(1) may, in consultation with the Chairman of the Board of
Governors, the Chairperson of the Federal Deposit Insurance
Corporation, the Chairman of the Federal Trade Commission,
the Chairman of the National Credit Union Administration
Board, the Comptroller of the Currency, the Director of the
Office of Thrift Supervision, the Secretary of the Department
of Housing and Urban Development, and the Director of the
Office of Management and Budget, change the date designated
under subsection (a); and
(2) shall publish notice of any changed designated date in
the Federal Register.
(c) Permissible Dates.--
(1) In general.--Except as provided in paragraph (2), any
date designated under this section shall be not earlier than
180 days, nor later than 18 months, after the date of
enactment of this Act.
(2) Extension of time.--The Secretary may designate a date
that is later than 18 months after the date of enactment of
this Act if the Secretary transmits to appropriate committees
of Congress--
(A) a written determination that orderly implementation of
this title is not feasible before the date that is 18 months
after the date of enactment of this Act;
(B) an explanation of why an extension is necessary for the
orderly implementation of this title; and
(C) a description of the steps that will be taken to effect
an orderly and timely implementation of this title within the
extended time period.
(3) Extension limited.--In no case may any date designated
under this section be later than 24 months after the date of
enactment of this Act.

SEC. 1043. SAVINGS PROVISIONS.

(a) Board of Governors.--
(1) Existing rights, duties, and obligations not
affected.--Section 1041(b)(1) does not affect the validity of
any right, duty, or obligation of the United States, the
Board of Governors (or any Federal reserve bank), or any
other person that--
(A) arises under any provision of law relating to any
consumer financial protection function of the Board of
Governors transferred to the Division by this title; and
(B) existed on the day before the designated transfer date.
(2) Continuation of suits.--No provision of this title
shall abate any proceeding commenced by or against the Board
of Governors (or any Federal reserve bank) before the
designated transfer date with respect to any consumer
financial protection function of the Board of Governors (or
any Federal reserve bank) transferred to the Division by this
title, except that the Division, subject to section 1023,
shall be substituted for the Board of Governors (or Federal
reserve bank) as a party to any such proceeding as of the
designated transfer date.
(b) Federal Trade Commission.--
(1) Existing rights, duties, and obligations not
affected.--Section 1041(b)(5) does not affect the validity of
any right, duty, or obligation of the United States, the
Federal Trade Commission, or any other person, that--
(A) arises under any provision of law relating to any
consumer financial protection

[[Page S3221]]

function of the Federal Trade Commission transferred to the
Division by this title; and
(B) existed on the day before the designated transfer date.
(2) Continuation of suits.--No provision of this title
shall abate any proceeding commenced by or against the
Federal Trade Commission before the designated transfer date
with respect to any consumer financial protection function of
the Federal Trade Commission transferred to the Division by
this title, except that the Division, subject to section
1023, shall be substituted for the Federal Trade Commission
as a party to any such proceeding as of the designated
transfer date.
(c) Continuation of Existing Orders, Rules, Determinations,
Agreements, and Resolutions.--All orders, resolutions,
determinations, agreements, and rules that have been issued,
made, prescribed, or allowed to become effective by any
transferor agency or by a court of competent jurisdiction, in
the performance of consumer financial protection functions
that are transferred by this title and that are in effect on
the day before the designated transfer date, shall continue
in effect according to the terms of those orders,
resolutions, determinations, agreements, and rules, and shall
not be enforceable by or against the Division.
(d) Identification of Rules Continued.--Not later than the
designated transfer date, the Division--
(1) shall, after consultation with the head of each
transferor agency, identify the rules continued under
subsection (g) that will be enforced by the Division; and
(2) shall publish a list of such rules in the Federal
Register.
(e) Status of Rules Proposed or Not Yet Effective.--
(1) Proposed rules.--Any proposed rule of a transferor
agency which that agency, in performing consumer financial
protection functions transferred by this title, has proposed
before the designated transfer date, but has not been
published as a final rule before that date, shall be deemed
to be a proposed rule of the Division.
(2) Rules not yet effective.--Any interim or final rule of
a transferor agency which that agency, in performing consumer
financial protection functions transferred by this title, has
published before the designated transfer date, but which has
not become effective before that date, shall become effective
as a rule of the Division according to its terms.

SEC. 1044. TRANSFER OF CERTAIN PERSONNEL.

(a) In General.--
(1) Certain federal reserve system employees transferred.--
(A) Identifying employees for transfer.--The Division and
the Board of Governors shall--
(i) jointly determine the number of employees of the Board
of Governors necessary to perform or support the consumer
financial protection functions of the Board of Governors that
are transferred to the Division by this title; and
(ii) consistent with the number determined under clause
(i), jointly identify employees of the Board of Governors for
transfer to the Division, in a manner that the Division and
the Board of Governors, in their sole discretion, determine
equitable.
(B) Identified employees transferred.--All employees of the
Board of Governors identified under subparagraph (A)(ii)
shall be transferred to the Division for employment.
(C) Federal reserve bank employees.--Employees of any
Federal reserve bank who, on the day before the designated
transfer date, are performing consumer financial protection
functions on behalf of the Board of Governors shall be
treated as employees of the Board of Governors for purposes
of subparagraphs (A) and (B).
(2) Appointment authority for excepted service and senior
executive service transferred.--
(A) In general.--In the case of employee occupying a
position in the excepted service or the Senior Executive
Service, any appointment authority established pursuant to
law or regulations of the Office of Personnel Management for
filling such positions shall be transferred, subject to
subparagraph (B).
(B) Declining transfers allowed.--An agency or entity may
decline to make a transfer of authority under subparagraph
(A) (and the employees appointed pursuant thereto) to the
extent that such authority relates to positions excepted from
the competitive service because of their confidential,
policy-making, policy-determining, or policy-advocating
character, and non-career positions in the Senior Executive
Service (within the meaning of section 3132(a)(7) of title 5,
United States Code).
(b) Timing of Transfers and Position Assignments.--Each
employee to be transferred under this section shall--
(1) be transferred not later than 90 days after the
designated transfer date; and
(2) receive notice of a position assignment not later than
120 days after the effective date of his or her transfer.
(c) Transfer of Function.--
(1) In general.--Notwithstanding any other provision of
law, the transfer of employees shall be deemed a transfer of
functions for the purpose of section 3503 of title 5, United
States Code.
(2) Priority of this title.--If any provisions of this
title conflict with any protection provided to transferred
employees under section 3503 of title 5, United States Code,
the provisions of this title shall control.
(d) Equal Status and Tenure Positions.--
(1) Employees transferred from board, ftc.--Each employee
transferred under this title from the Board of Governors or
the Federal Trade Commission shall be placed in a position at
the Division with the same status and tenure as that employee
held on the day before the designated transfer date.
(2) Employees transferred from the federal reserve banks.--
(A) Comparability.--Each employee transferred under this
title from a Federal reserve bank shall be placed in a
position with the same status and tenure as that of an
employee transferring to the Division from the Board of
Governors who perform similar functions and have similar
periods of service.
(B) Service periods credited.--For purposes of this
paragraph, periods of service with the Board of Governors or
a Federal reserve bank shall be credited as periods of
service with a Federal agency.
(e) Additional Certification Requirements Limited.--
Examiners transferred to the Division are not subject to any
additional certification requirements before being placed in
a comparable examiner position at the Division examining the
same types of institutions as they examined before they were
transferred.
(f) Personnel Actions Limited.--
(1) 2-Year protection.--Except as provided in paragraph
(2), each transferred employee holding a permanent position
on the day before the designated transfer date may not,
during the 2-year period beginning on the designated transfer
date, be involuntarily separated, or involuntarily reassigned
outside his or her locality pay area, as defined by the
Office of Personnel Management.
(2) Exceptions.--Paragraph (1) does not limit the right of
the Division--
(A) to separate an employee for cause or for unacceptable
performance;
(B) to terminate an appointment to a position excepted from
the competitive service because of its confidential policy-
making, policy-determining, or policy-advocating character;
or
(C) to reassign a supervisory employee outside his or her
locality pay area, as defined by the Office of Personnel
Management, when the Division determines that the
reassignment is necessary for the efficient operation of the
Division.
(g) Pay.--
(1) 2-Year protection.--Except as provided in paragraph
(2), each transferred employee shall, during the 2-year
period beginning on the designated transfer date, receive pay
at a rate equal to not less than the basic rate of pay
(including any geographic differential) that the employee
received during the pay period immediately preceding the date
of transfer.
(2) Exceptions.--Paragraph (1) does not limit the right of
the Division to reduce the rate of basic pay of a transferred
employee--
(A) for cause;
(B) for unacceptable performance; or
(C) with the consent of the employee.
(3) Protection only while employed.--Paragraph (1) applies
to a transferred employee only while that employee remains
employed by the Division.
(4) Pay increases permitted.--Paragraph (1) does not limit
the authority of the Division to increase the pay of a
transferred employee.
(h) Reorganization.--
(1) Between 1st and 3rd year.--
(A) In general.--If the Division determines, during the 2-
year period beginning 1 year after the designated transfer
date, that a reorganization of the staff of the Division is
required--
(i) that reorganization shall be deemed a ``major
reorganization'' for purposes of affording affected employees
retirement under section 8336(d)(2) or 8414(b)(1)(B) of title
5, United States Code;
(ii) before the reorganization occurs, all employees in the
same locality pay area as defined by the Office of Personnel
Management shall be placed in a uniform position
classification system; and
(iii) any resulting reduction in force shall be governed by
the provisions of chapter 35 of title 5, United States Code,
except that the Division shall--

(I) establish competitive areas (as that term is defined in
regulations issued by the Office of Personnel Management) to
include at a minimum all employees in the same locality pay
area as defined by the Office of Personnel Management;
(II) establish competitive levels (as that term is defined
in regulations issued by the Office of Personnel Management)
without regard to whether the particular employees have been
appointed to positions in the competitive service or the
excepted service; and
(III) afford employees appointed to positions in the
excepted service (other than to a position excepted from the
competitive service because of its confidential policy-
making, policy-determining, or policy-advocating character)
the same assignment rights to positions within the Division
as employees appointed to positions in the competitive
service.

(B) Service credit for reductions in force.--For purposes
of this paragraph, periods of service with a Federal home
loan bank, a joint office of the Federal home loan banks, the
Board of Governors, a Federal reserve bank, the Federal
Deposit Insurance Corporation, or the National Credit Union
Administration shall be credited as periods of service with a
Federal agency.
(2) After 3rd year.--

[[Page S3222]]

(A) In general.--If the Division determines, at any time
after the 3-year period beginning on the designated transfer
date, that a reorganization of the staff of the Division is
required, any resulting reduction in force shall be governed
by the provisions of chapter 35 of title 5, United States
Code, except that the Division shall establish competitive
levels (as that term is defined in regulations issued by the
Office of Personnel Management) without regard to types of
appointment held by particular employees transferred under
this section.
(B) Service credit for reductions in force.--For purposes
of this paragraph, periods of service with a Federal home
loan bank, a joint office of the Federal home loan banks, the
Board of Governors, a Federal reserve bank, the Federal
Deposit Insurance Corporation, or the National Credit Union
Administration shall be credited as periods of service with a
Federal agency.
(i) Benefits.--
(1) Retirement benefits for transferred employees.--
(A) In general.--
(i) Continuation of existing retirement plan.--Except as
provided in subparagraph (B), each transferred employee shall
remain enrolled in his or her existing retirement plan,
through any period of continuous employment with the
Division.
(ii) Employer contribution.--The Division shall pay any
employer contributions to the existing retirement plan of
each transferred employee, as required under that plan.
(B) Option for employees transferred from federal reserve
system to be subject to federal employee retirement
program.--
(i) Election.--Any transferred employee who was enrolled in
a Federal Reserve System retirement plan on the day before
his or her transfer to the Division may, during the 1-year
period beginning 6 months after the designated transfer date,
elect to be subject to the Federal employee retirement
program.
(ii) Effective date of coverage.--For any employee making
an election under clause (i), coverage by the Federal
employee retirement program shall begin 1 year after the
designated transfer date.
(C) Division participation in federal reserve system
retirement plan.--
(i) Separate account in federal reserve system retirement
plan established.--Notwithstanding any other provision of
law, and subject to the terms and conditions of this section,
a separate account in the Federal Reserve System retirement
plan shall be established for Division employees who do not
make the election under subparagraph (B).
(ii) Funds attributable to transferred employees remaining
in federal reserve system retirement plan transferred.--The
proportionate share of funds in the Federal Reserve System
retirement plan, including the proportionate share of any
funding surplus in that plan, attributable to a transferred
employee who does not make the election under subparagraph
(B), shall be transferred to the account established under
clause (i).
(iii) Employer contributions deposited.--The Division shall
deposit into the account established under clause (i) the
employer contributions that the Division makes on behalf of
employees who do not make the election under subparagraph
(B).
(iv) Account administration.--The Division shall administer
the account established under clause (i) as a participating
employer in the Federal Reserve System retirement plan.
(D) Definitions.--For purposes of this paragraph--
(i) the term ``existing retirement plan'' means, with
respect to any employee transferred under this section, the
particular retirement plan (including the Financial
Institutions Retirement Fund) and any associated thrift
savings plan of the agency or Federal reserve bank from which
the employee was transferred, which the employee was enrolled
in on the day before the designated transfer date; and
(ii) the term ``Federal employee retirement program'' means
the retirement program for Federal employees established by
chapter 84 of title 5, United States Code.
(2) Benefits other than retirement benefits for transferred
employees.--
(A) During 1st year.--
(i) Existing plans continue.--Each transferred employee
may, for 1 year after the designated transfer date, retain
membership in any other employee benefit program of the
agency or bank from which the employee transferred, including
a dental, vision, long term care, or life insurance program,
to which the employee belonged on the day before the
designated transfer date.
(ii) Employer contribution.--The Division shall reimburse
the agency or bank from which an employee was transferred for
any cost incurred by that agency or bank in continuing to
extend coverage in the benefit program to the employee, as
required under that program or negotiated agreements.
(B) Dental, vision, or life insurance after 1st year.--If,
after the 1-year period beginning on the designated transfer
date, the Division decides not to continue participation in
any dental, vision, or life insurance program of an agency or
bank from which an employee transferred, a transferred
employee who is a member of such a program may, before the
decision of the Division takes effect, elect to enroll,
without regard to any regularly scheduled open season, in--
(i) the enhanced dental benefits established by chapter 89A
of title 5, United States Code;
(ii) the enhanced vision benefits established by chapter
89B of title 5, United States Code; or
(iii) the Federal Employees Group Life Insurance Program
established by chapter 87 of title 5, United States Code,
without regard to any requirement of insurability.
(C) Long term care insurance after 1st year.--If, after the
1-year period beginning on the designated transfer date, the
Division decides not to continue participation in any long
term care insurance program of an agency or bank from which
an employee transferred, a transferred employee who is a
member of such a program may, before the decision of the
Division takes effect, elect to apply for coverage under the
Federal Long Term Care Insurance Program established by
chapter 90 of title 5, United States Code, under the
underwriting requirements applicable to a new active
workforce member (as defined in part 875, title 5, Code of
Federal Regulations).
(D) Employee contribution.--An individual enrolled in the
Federal Employees Health Benefits program shall pay any
employee contribution required by the plan.
(E) Additional funding.--The Division shall transfer to the
Federal Employees Health Benefits Fund established under
section 8909 of title 5, United States Code, an amount
determined by the Director of the Office of Personnel
Management, after consultation with the Division and the
Office of Management and Budget, to be necessary to reimburse
the Fund for the cost to the Fund of providing benefits under
this paragraph.
(F) Credit for time enrolled in other plans.--For employees
transferred under this title, enrollment in a health benefits
plan administered by a transferor agency or a Federal reserve
bank, as the case may be, immediately before enrollment in a
health benefits plan under chapter 89 of title 5, United
States Code, shall be considered as enrollment in a health
benefits plan under that chapter for purposes of section
8905(b)(1)(A) of title 5, United States Code.
(G) Special provisions to ensure continuation of life
insurance benefits.--
(i) In general.--An annuitant (as defined in section
8901(3) of title 5, United States Code) who is enrolled in a
life insurance plan administered by a transferor agency on
the day before the designated transfer date shall be eligible
for coverage by a life insurance plan under sections 8706(b),
8714a, 8714b, and 8714c of title 5, United States Code, or in
a life insurance plan established by the Division, without
regard to any regularly scheduled open season and requirement
of insurability.
(ii) Employee contribution.--An individual enrolled in a
life insurance plan under this subparagraph shall pay any
employee contribution required by the plan.
(iii) Additional funding.--The Division shall transfer to
the Employees' Life Insurance Fund established under section
8714 of title 5, United States Code, an amount determined by
the Director of the Office of Personnel Management, after
consultation with the Division and the Office of Management
and Budget, to be necessary to reimburse the Fund for the
cost to the Fund of providing benefits under this
subparagraph not otherwise paid for by the employee under
clause (ii).
(iv) Credit for time enrolled in other plans.--For
employees transferred under this title, enrollment in a life
insurance plan administered by a transferor agency
immediately before enrollment in a life insurance plan under
chapter 87 of title 5, United States Code, shall be
considered as enrollment in a life insurance plan under that
chapter for purposes of section 8706(b)(1)(A) of title 5,
United States Code.
(3) OPM rules.--The Office of Personnel Management shall
issue such rules as are necessary to carry out this
subsection.
(j) Implementation of Uniform Pay and Classification
System.--Not later than 2 years after the designated transfer
date, the Division shall implement a uniform pay and
classification system for all employees transferred under
this title.
(k) Equitable Treatment.--In administering the provisions
of this section, the Division--
(1) shall take no action that would unfairly disadvantage
transferred employees relative to each other based on their
prior employment by the Board of Governors, the Federal
Deposit Insurance Corporation, the Federal Trade Commission,
the National Credit Union Administration, the Office of the
Comptroller of the Currency, the Office of Thrift
Supervision, a Federal reserve bank, a Federal home loan
bank, or a joint office of the Federal home loan banks; and
(2) may take such action as is appropriate in individual
cases so that employees transferred under this section
receive equitable treatment, with respect to the status,
tenure, pay, benefits (other than benefits under programs
administered by the Office of Personnel Management), and
accrued leave or vacation time of those employees, for prior
periods of service with any Federal agency, including the
Board of Governors, the Corporation, the Federal Trade
Commission, the National Credit Union Administration, the
Office of the Comptroller of the Currency, the Office of
Thrift Supervision, a Federal reserve bank, a Federal home
loan bank, or a joint office of the Federal home loan banks.
(l) Implementation.--In implementing the provisions of this
section, the Division shall

[[Page S3223]]

coordinate with the Office of Personnel Management and other
entities having expertise in matters related to employment to
ensure a fair and orderly transition for affected employees.

Subtitle D--Amendment to the Federal Deposit Insurance Act

SEC. 1051. CORPORATION BOARD MEMBERSHIP.

Section 2(a)(1)(B) of the Federal Deposit Insurance Act (12
U.S.C. 1812(a)(1)(B)) is amended to read as follows:
``(B) the Head of Supervision for the Board of Governors of
the Federal Reserve System; and''.
______

SA 3827. Mr. SHELBY (for himself and Mr. Dodd) 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; as follows:

On page 111, line 7, insert ``(a) In General.--'' before
``In''.
On page 114, line 14, after ``(iii)'' insert ``that is
predominantly engaged in activities that the Board of
Governors has determined are financial in nature or
incidental thereto for purposes of section 4(k) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1843(k))''.
On page 114, line 21, after ``(12 U.S.C. 2001 et seq.)''
insert ``, a governmental entity, or a regulated entity, as
defined under section 1303 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C.
4502(20))''.
On page 115, strike lines 18 through 20, and insert the
following:
(15) Court.--The term ``Court'' means the United States
District Court for the District of Columbia.
On page 115, between lines 22 and 23, insert the following:
(b) Definitional Criteria.--For purpose of the definition
of the term ``financial company'' under subsection (a)(10),
no company shall be deemed to be predominantly engaged in
activities that the Board of Governors has determined are
financial in nature or incidental thereto for purposes of
section 4(k) of the Bank Holding Company Act of 1956 (12
U.S.C. 1843(k)), if the consolidated revenues of such company
from such activities constitute less than 85 percent of the
total consolidated revenues of such company, as the
Corporation, in consultation with the Secretary, shall
establish by regulation. In determining whether a company is
a financial company under this title, the consolidated
revenues derived from the ownership or control of a
depository institution shall be included.
On page 115, line 23, strike ``ORDERLY LIQUIDATION
AUTHORITY PANEL'' and insert ``JUDICIAL REVIEW''.
On page 115, strike line 24 and all that follows through
page 116, line 16.
On page 116, line 17, strike ``(b)'' and insert ``(a)''.
On page 116, strike lines 18 through 20, and insert the
following:
(1) Petition to district court.--
(A) District court review.--
On page 116, strike line 21 and all that follows through
page 117, line 4, and insert the following:
(i) Petition to district court.--Subsequent to a
determination by the Secretary under section 203 that a
financial company satisfies the criteria in section 203(b),
the Secretary shall notify the Corporation and the covered
financial company. If the board of directors (or body
performing similar functions) of the covered financial
company acquiesces or consents to the appointment of the
Corporation as a receiver, the Secretary shall appoint the
Corporation as a receiver. If the board of directors (or body
performing similar functions) of the covered financial
company does not acquiesce or consent to the appointment of
the Corporation as receiver, the Secretary shall petition the
United States District Court for the District of Columbia for
an order authorizing the Secretary to appoint the Corporation
as a receiver.
On page 117, line 9, strike ``Panel'' and insert ``Court''.
On page 117, line 13, strike ``Panel'' and insert
``Court''.
On page 117, beginning on line 16, strike ``, within 24
hours of receipt of the petition filed by the Secretary,''.
On page 117, line 21, strike ``is supported'' and all that
follows through line 22, and insert ``and satisfies the
definition of a financial company under section 201(10) is
arbitrary and capricious.''.
On page 117, line 24, strike ``Panel'' and insert
``Court''.
On page 118, line 2, insert ``and satisfies the definition
of a financial company under section 201(10)'' after ``danger
of default''.
On page 118, lines 3 and 4, strike ``is supported by
substantial evidence'' and insert ``is not arbitrary and
capricious''.
On page 118, line 4, strike ``Panel'' and insert ``Court''.
On page 118, lines 9 and 10, strike ``is not supported by
substantial evidence'' and insert ``is arbitrary and
capricious''.
On page 118, line 10, strike ``Panel'' and insert
``Court''.
On page 118, between lines 16 and 17, insert the following:
(v) Petition granted by operation of law.--If the Court
does not make a determination within 24 hours of receipt of
the petition--

(I) the petition shall be granted by operation of law;
(II) the Secretary shall appoint the Corporation as
receiver; and
(III) liquidation under this title shall automatically and
without further notice or action be commenced and the
Corporation may immediately take all actions authorized under
this title.

On page 118, line 18, strike ``Panel'' and insert
``Court''.
On page 118, line 23, strike ``Panel'' and insert
``Court''.
On page 119, line 1, strike ``Panel'' and insert ``Court''.
On page 119, line 12, strike ``panel'' and insert
``district court''.
On page 119, line 16, strike ``Third Circuit'' and insert
``District of Columbia Circuit''.
On page 119, line 17, strike ``Panel'' and insert
``Court''.
On page 119, line 23, strike ``Panel'' and insert
``Court''.
On page 120, strike lines 16 through 17 and insert
``default and satisfies the definition of a financial company
under section 201(10) is arbitrary and capricious.''.
On page 121, lines 19 and 20, strike ``is supported by
substantial evidence'' and insert ``and satisfies the
definition of a financial company under section 201(10) is
arbitrary and capricious''.
On page 121, line 21, strike ``(c)'' and insert ``(b)''.
On page 121, line 24, strike ``Panel'' and insert
``Court''.
On page 122, line 5, strike ``subsection (b)(1)'' and all
that follows through line 9, and insert ``subsection
(a)(1).''.
On page 122, strike lines 14 through 16.
On page 122, line 17, strike ``(C)'' and insert ``(A)''.
On page 122, line 19, strike ``(D)'' and insert ``(B)''.
On page 122, line 21, strike ``(E)'' and insert ``(C)''.
On page 122, line 23, strike ``(F)'' and insert ``(D)''.
On page 123, line 1, strike ``(d)'' and insert ``(c)''.
On page 123, between lines 14 and 15, insert the following:
(d) Time Limit on Receivership Authority.--
(1) Baseline period.--Any appointment of the Corporation as
receiver under this section shall terminate at the end of the
3-year period beginning on the date on which such appointment
is made.
(2) Extension of time limit.--The time limit established in
paragraph (1) may be extended by the Corporation for up to 1
additional year, if the Chairperson of the Corporation
determines and certifies in writing to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives that continuation of the receivership is
necessary--
(A) to--
(i) maximize the net present value return from the sale or
other disposition of the assets of the covered financial
company; or
(ii) minimize the amount of loss realized upon the sale or
other disposition of the assets of the covered financial
company; and
(B) to protect the stability of the financial system of the
United States.
(3) Second extension of time limit.--
(A) In general.--The time limit under this subsection, as
extended under paragraph (2), may be extended for up to 1
additional year, if the Chairperson of the Corporation, with
the concurrence of the Secretary, submits the certifications
described in paragraph (2).
(B) Additional report required.--Not later than 30 days
after the date of commencement of the extension under
subparagraph (A), the Corporation shall submit a report to
the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives describing the need for the extension and
the specific plan of the Corporation to conclude the
receivership before the end of the second extension.
(4) Ongoing litigation.--The time limit under this
subsection, as extended under paragraph (3), may be further
extended solely for the purpose of completing ongoing
litigation in which the Corporation as receiver is a party,
provided that the appointment of the Corporation as receiver
shall terminate not later than 90 days after the date of
completion of such litigation, if--
(A) the Council determines that the Corporation used its
best efforts to conclude the receivership in accordance with
its plan before the end of the time limit described in
paragraph (3);
(B) the Council determines that the completion of longer-
term responsibilities in the form of ongoing litigation
justifies the need for an extension; and
(C) the Corporation submits a report approved by the
Council not later than 30 days after the date of the
determinations by the Council under subparagraphs (A) and (B)
to the Committee on Banking, Housing, and Urban Affairs of
the Senate and the Committee on Financial Services of the
House of Representatives, describing--
(i) the ongoing litigation justifying the need for an
extension; and
(ii) the specific plan of the Corporation to complete the
litigation and conclude the receivership.

[[Page S3224]]

(5) Regulations.--The Corporation may issue regulations
governing the termination of receiverships under this title.
(6) No liability.--The Corporation and the Deposit
Insurance Fund shall not be liable for unresolved claims
arising from the receivership after the termination of the
receivership.
On page 123, line 21, strike ``Panel'' and insert
``Court''.
On page 124, line 11, strike ``Panel'' and insert
``Court''.
On page 126, between lines 9 and 10, insert the following:
(g) Study of Prompt Corrective Action Implementation by the
Appropriate Federal Agencies.--
(1) Study.--The Comptroller General of the United States
shall conduct a study regarding the implementation of prompt
corrective action by the appropriate Federal banking
agencies.
(2) Issues to be studied.--In conducting the study under
paragraph (1), the Comptroller General shall evaluate--
(A) the effectiveness of implementation of prompt
corrective action by the appropriate Federal banking agencies
and the resolution of insured depository institutions by the
Corporation; and
(B) ways to make prompt corrective action a more effective
tool to resolve the insured depository institutions at the
least possible long-term cost to the Deposit Insurance Fund.
(3) Report to council.--Not later than 1 years after the
date of enactment of this Act, the Comptroller General shall
submit a report to the Council on the results of the study
conducted under this subsection.
(4) Council report of action.--Not later than 6 months
after the date of receipt of the report from the Comptroller
General under paragraph (3), the Council shall submit a
report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives on actions taken in response
to the report, including any recommendations made to the
Federal primary financial regulatory agencies under section
120.
On page 128, line 9, strike ``and''.
On page 128, line 12, strike the period at the end and
insert ``; and''.
On page 128, between lines 12 and 13, insert the following:
(G) an evaluation of whether the company satisfies the
definition of a financial company under section 201.
On page 128, line 16, strike ``202(b)(1)(A)'' and insert
``202(a)(1)(A)''.
On page 129, line 17, strike ``and''.
On page 129, line 21, strike the period at the end and
insert ``; and''.
On page 129, between lines 21 and 22, insert the following:
(7) the company satisfies the definition of a financial
company under section 201.
On page 132, strike lines 3 through 17, and insert the
following:
(A) In general.--Not later than 60 days after the date of
appointment of the Corporation as receiver for a covered
financial company, the Corporation shall file a report with
the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives--
(i) setting forth information on the financial condition of
the covered financial company as of the date of the
appointment, including a description of its assets and
liabilities;
(ii) describing the plan of, and actions taken by, the
Corporation to wind down the covered financial company;
(iii) explaining each instance in which the Corporation
waived any applicable requirements of part 366 of title 12,
Code of Federal Regulations (or any successor thereto) with
respect to conflicts of interest by any person in the private
sector who was retained to provide services to the
Corporation in connection with such receivership;
(iv) describing the reasons for the provision of any
funding to the receivership out of the Fund;
(v) setting forth the expected costs of the orderly
liquidation of the covered financial company;
(vi) setting forth the identity of any claimant that is
treated in a manner different from other similarly situated
claimants under subsection (b)(4), (d)(4), or (h)(5)(E), the
amount of any additional payment to such claimant under
subsection (d)(4), and the reason for any such action; and
(vii) which report the Corporation shall publish on an
online website maintained by the Corporation, subject to
maintaining appropriate confidentiality.
On page 132, between lines 22 and 23, insert the following:
(C) Congressional testimony.--The Corporation and the
primary financial regulatory agency, if any, of the financial
company for which the Corporation was appointed receiver
under this title shall appear before Congress, if requested,
not later than 30 days after the date on which the
Corporation first files the reports required under
subparagraph (A).
On page 135, line 15, strike ``section 202(b)'' and insert
``section 202(a)''.
On page 136, line 9, strike ``with the strong presumption''
and insert ``so''.
On page 138, line 16, insert after the period the
following: ``All funds provided by the Corporation under this
subsection shall have a priority of claims under subparagraph
(A) or (B) of section 210(b)(1), as applicable, including
funds used for--
``(1) making loans to, or purchasing any debt obligation
of, the covered financial company or any covered subsidiary;
``(2) purchasing or guaranteeing against loss the assets of
the covered financial company or any covered subsidiary,
directly or through an entity established by the Corporation
for such purpose;
``(3) assuming or guaranteeing the obligations of the
covered financial company or any covered subsidiary to 1 or
more third parties;
``(4) taking a lien on any or all assets of the covered
financial company or any covered subsidiary, including a
first priority lien on all unencumbered assets of the covered
financial company or any covered subsidiary to secure
repayment of any transactions conducted under this
subsection;
``(5) selling or transferring all, or any part, of such
acquired assets, liabilities, or obligations of the covered
financial company or any covered subsidiary; and
``(6) making payments pursuant to subsections (b)(4),
(d)(4), and (h)(5)(E) of section 210.''.
On page 138, line 15, strike ``section 210(n)(13)'' and
insert ``section 210(n)(11)''.
On page 147, line 3, insert before the period the
following: ``, and address the potential for conflicts of
interest between or among individual receiverships
established under this title or under the Federal Deposit
Insurance Act''.
On page 187, line 18, strike ``(B), and (C)'' and insert
``(B), (C), and (D)''.
On page 187, line 20, strike ``(D)'' and insert ``(E)''.
On page 192, insert before line 1 the following:
(C) Wages, salaries, or commissions, including vacation,
severance, and sick leave pay earned by an individual (other
than an individual described in subparagraph (G)), but only
to the extent of $11,725 for each individual (as indexed for
inflation, by regulation of the Corporation) earned not later
than 180 days before the date of appointment of the
Corporation as receiver.
(D) Contributions owed to employee benefit plans arising
from services rendered not later than 180 days before the
date of appointment of the Corporation as receiver, to the
extent of the number of employees covered by each such plan,
multiplied by $11,725 (as indexed for inflation, by
regulation of the Corporation), less the aggregate amount
paid to such employees under subparagraph (C), plus the
aggregate amount paid by the receivership on behalf of such
employees to any other employee benefit plan.
On page 192, line 1, strike ``(C)'' and insert ``(E)''.
On page 192, beginning on line 3, strike ``(D) or (E)'' and
insert ``(F), (G), or (H)''.
On page 192, line 5, strike ``(D)'' and insert ``(F)''.
On page 192, between lines 7 and 8, insert the following:
(G) Any wages, salaries, or commissions including vacation,
severance, and sick leave pay earned, owed to senior
executives and directors of the covered financial company.
On page 192, line 7, strike ``subparagraph (E)).'' and
insert ``subparagraph (G) or (H)).''.
On page 192, line 8, strike ``(E)'' and insert ``(H)''.
On page 193, line 18, strike ``(ii)'' and insert the
following:
``(ii) to initiate and continue operations essential to
implementation of the receivership or any bridge financial
company;
``(iii)''.
On page 228, line 17, strike ``5th'' and insert ``3rd''.
On page 236, line 20, strike ``5th'' and insert ``3rd''.
On page 237, line 14, strike ``5th'' and insert ``3rd''.
On page 240, line 8, strike ``section 202(c)(1)'' and
insert ``section 202(a)(1)''.
On page 246, strike line 21 and all the follows through
page 247, line 5, and insert the following:
(B) Limitations.--
(i) Prohibition.--The Corporation shall not make any
payments or credit amounts to any claimant or category of
claimants that would result in any claimant receiving more
than the face value amount of any claim that is proven to the
satisfaction of the Corporation.
(ii) No obligation.--Notwithstanding any other provision of
Federal or State law, or the Constitution of any State, the
Corporation shall not be obligated, as a result of having
made any payment under subparagraph (A) or credited any
amount described in subparagraph (A) to or with respect to,
or for the account, of any claimant or category of claimants,
to make payments to any other claimant or category of
claimants.
On page 254, line 24, strike ``(13)'' and insert ``(11)''.
On page 260, line 4, strike ``subsection (o)(1)(E)(ii))''
and insert ``subsection (o)(1)(D)(ii))''.
On page 263, line 16, strike ``(13)'' and insert ``(11)''.
On page 278, line 5, strike ``(9)'' and insert ``(6)''.
On page 278, line 10, strike ``(9)'' and insert ``(6)''.
On page 278, strike line 18 and all that follows through
page 279, line 20.
On page 279, line 21, strike ``(8)'' and insert ``(4)''.
On page 280, line 5, strike ``(9)'' and insert ``(5)''.
On page 281, line 6, strike the period and insert the
following: ``, plus an interest rate surcharge to be
determined by the Secretary,

[[Page S3225]]

which shall be greater than the difference between--
``(i) the current average rate on an index of corporate
obligations of comparable maturity; and
``(ii) the current average rate on outstanding marketable
obligations of the United States of comparable maturity.''.
On page 281, strike line 20 and all that follows through
page 282, line 8, and insert the following:
(6) Maximum obligation limitation.--The Corporation may
not, in connection with the orderly liquidation of a covered
financial company, issue or incur any obligation, if, after
issuing or incurring the obligation, the aggregate amount of
such obligations outstanding under this subsection for each
covered financial company would exceed--
(A) an amount that is equal to 10 percent of the total
consolidated assets of the covered financial company, based
on the most recent financial statement available, during the
30-day period immediately following the date of appointment
of the Corporation as receiver (or a shorter time period if
the Corporation has calculated the amount described under
subparagraph (B)); and
(B) the amount that is equal to 90 percent of the fair
value of the total consolidated assets of each covered
financial company that are available for repayment, after the
time period described in subparagraph (A).
On page 282, line 9, strike ``(11)'' and insert ``(7)''.
On page 282, strike lines 14 through 19.
On page 282, line 20, strike ``(13)'' and insert ``(8)''.
On page 283, strike lines 5 through 14 and insert the
following:
(i) the authorities of the Corporation contained in this
title shall not be used to assist the Deposit Insurance Fund
or to assist any financial company under applicable law other
than this Act;
(ii) the authorities of the Corporation relating to the
Deposit Insurance Fund, or any other responsibilities of the
Corporation under applicable law other than this title, shall
not be used to assist a covered financial company pursuant to
this title; and
(iii) the Deposit Insurance Fund may not be used in any
manner to otherwise circumvent the purposes of this title.
On page 283, line 24, strike ``(14)'' and insert ``(9)''.
On page 284, line 6, insert ``, including taking any
actions specified'' before ``under 204(d)''.
On page 284, line 7, insert before the period ``, and
payments to third parties''.
On page 284, between lines 10 and 11, insert the following:
(10) Implementation expenses.--
(A) In general.--Reasonable implementation expenses of the
Corporation incurred after the date of enactment of this Act
shall be treated as expenses of the Council.
(B) Requests for reimbursement.--The Corporation shall
periodically submit a request for reimbursement for
implementation expenses to the Chairperson of the Council,
who shall arrange for prompt reimbursement to the Corporation
of reasonable implementation expenses.
(C) Definition.--As used in this paragraph, the term
``implementation expenses''--
(i) means costs incurred by the Corporation beginning on
the date of enactment of this Act, as part of its efforts to
implement this title that do not relate to a particular
covered financial company; and
(ii) includes the costs incurred in connection with the
development of policies, procedures, rules, and regulations
and other planning activities of the Corporation consistent
with carrying out this title.
On page 284, strike line 13 and all that follows through
page 285, line 2.
On page 285, line 3, strike ``(B)'' and insert ``(A)''.
On page 285, line 10, strike ``(C)'' and insert ``(B)''.
On page 285, line 10, strike ``Additional''.
On page 285, line 13, strike ``(E)'' and insert ``(D)''.
On page 285, strike lines 14 through 23.
On page 285, line 24, strike ``(iii)''.
On page 285, line 21, strike ``during the initial
capitalization period''.
On page 286, strike line 11 and all that follows through
page 287, line 2, and insert the following:
(D) Application of assessments.--To meet the requirements
of subparagraph (C), the Corporation shall--
(i) impose assessments, as soon as practicable, on any
claimant that received additional payments or amounts from
the Corporation pursuant to subsection (b)(4), (d)(4), or
(h)(5)(E), except for payments or amounts necessary to
initiate and continue operations essential to implementation
of the receivership or any bridge financial company, to
recover on a cumulative basis, the entire difference
between--

(I) the aggregate value the claimant received from the
Corporation on a claim pursuant to this title (including
pursuant to subsection (b)(4), (d)(4), and (h)(5)(E)), as of
the date on which such value was received; and
(II) the value the claimant was entitled to receive from
the Corporation on such claim solely from the proceeds of the
liquidation of the covered financial company under this
title; and

(ii) if the amounts to be recovered on a cumulative basis
under clause (i) are insufficient to meet the requirements of
subparagraph (C), after taking into account the
considerations set forth in paragraph (4), impose assessments
on--

(I) eligible financial companies; and
(II) financial companies with total consolidated assets
equal to or greater than $50,000,000,000 that are not
eligible financial companies.

(E) Provision of financing.--Payments or amounts necessary
to initiate and continue operations essential to
implementation of the receivership or any bridge financial
company described in subparagraph (E)(i) shall not include
the provision of financing, as defined by rule of the
Corporation, to third parties.
On page 287, strike lines 3 through 10.
On page 289, strike line 25, and insert ``the Corporation,
in consultation with the Secretary, deems appropriate.''.
On page 290, beginning on line 9, strike ``, in
consultation with the Secretary and the Council,''.
On page 290, line 11, insert after the period the
following: ``The Corporation shall consult with the Secretary
in the development and finalization of such regulations.''.
On page 295, between lines 19 and 20, insert the following:
(s) Recoupment of Compensation From Senior Executives and
Directors.--
(1) In general.--The Corporation, as receiver of a covered
financial company, may recover from any current or former
senior executive or director substantially responsible for
the failed condition of the covered financial company any
compensation received during the 2-year period preceding the
date on which the Corporation was appointed as the receiver
of the covered financial company, except that, in the case of
fraud, no time limit shall apply.
(2) Cost considerations.--In seeking to recover any such
compensation, the Corporation shall weigh the financial and
deterrent benefits of such recovery against the cost of
executing the recovery.
(3) Rulemaking.--The Corporation shall promulgate
regulations to implement the requirements of this subsection,
including defining the term ``compensation'' to mean any
financial remuneration, including salary, bonuses,
incentives, benefits, severance, deferred compensation, or
golden parachute benefits, and any profits realized from the
sale of the securities of the covered financial company.
On page 296, between lines 15 and 16, insert the following:
(d) FDIC Inspector General Reviews.--
(1) Scope.--The Inspector General of the Corporation shall
conduct, supervise, and coordinate audits and investigations
of the liquidation of any covered financial company by the
Corporation as receiver under this title, including
collecting and summarizing--
(A) a description of actions taken by the Corporation as
receiver;
(B) a description of any material sales, transfers,
mergers, obligations, purchases, and other material
transactions entered into by the Corporation;
(C) an evaluation of the adequacy of the policies and
procedures of the Corporation under section 203(d) and
orderly liquidation plan under section 210(n)(14);
(D) an evaluation of the utilization by the Corporation of
the private sector in carrying out its functions, including
the adequacy of any conflict-of-interest reviews; and
(E) an evaluation of the overall performance of the
Corporation in liquidating the covered financial company,
including administrative costs, timeliness of liquidation
process, and impact on the financial system.
(2) Frequency.--Not later than 6 months after the date of
appointment of the Corporation as receiver under this title
and every 6 months thereafter, the Inspector General of the
Corporation shall conduct the audit and investigation
described in paragraph (1).
(3) Reports and testimony.--The Inspector General of the
Corporation shall include in the semiannual reports required
by section 5(a) of the Inspector General Act of 1978 (5
U.S.C. App.), a summary of the findings and evaluations under
paragraph (1), and shall appear before the appropriate
committees of Congress, if requested, to present each such
report.
(4) Funding.--
(A) Initial funding.--The expenses of the Inspector General
of the Corporation in carrying out this subsection shall be
considered administrative expenses of the receivership.
(B) Additional funding.--If the maximum amount available to
the Corporation as receiver under this title is insufficient
to enable the Inspector General of the Corporation to carry
out the duties under this subsection, the Corporation shall
pay such additional amounts from assessments imposed under
section 210.
(5) Termination of responsibilities.--The duties and
responsibilities of the Inspector General of the Corporation
under this subsection shall terminate 1 year after the date
of termination of the receivership under this title.
(e) Treasury Inspector General Reviews.--
(1) Scope.--The Inspector General of the Department of the
Treasury shall conduct, supervise, and coordinate audits and
investigations of actions taken by the Secretary related to
the liquidation of any covered financial company under this
title, including collecting and summarizing--
(A) a description of actions taken by the Secretary under
this title;
(B) an analysis of the approval by the Secretary of the
policies and procedures of the

[[Page S3226]]

Corporation under section 203 and acceptance of the orderly
liquidation plan of the Corporation under section 210; and
(C) an assessment of the terms and conditions underlying
the purchase by the Secretary of obligations of the
Corporation under section 210.
(2) Frequency.--Not later than 6 months after the date of
appointment of the Corporation as receiver under this title
and every 6 months thereafter, the Inspector General of the
Department of the Treasury shall conduct the audit and
investigation described in paragraph (1).
(3) Reports and testimony.--The Inspector General of the
Department of the Treasury shall include in the semiannual
reports required by section 5(a) of the Inspector General Act
of 1978 (5 U.S.C. App.), a summary of the findings and
assessments under paragraph (1), and shall appear before the
appropriate committees of Congress, if requested, to present
each such report.
(4) Termination of responsibilities.--The duties and
responsibilities of the Inspector General of the Department
of the Treasury under this subsection shall terminate 1 year
after the date on which the obligations purchased by the
Secretary from the Corporation under section 210 are fully
redeemed.
(f) Primary Financial Regulatory Agency Inspector General
Reviews.--
(1) Scope.--Upon the appointment of the Corporation as
receiver for a covered financial company supervised by a
Federal primary financial regulatory agency or the Board of
Governors under section 165, the Inspector General of the
agency or the Board of Governors shall make a written report
reviewing the supervision by the agency or the Board of
Governors of the covered financial company, which shall--
(A) evaluate the effectiveness of the agency or the Board
of Governors in carrying out its supervisory responsibilities
with respect to the covered financial company;
(B) identify any acts or omissions on the part of agency or
Board of Governors officials that contributed to the covered
financial company being in default or in danger of default;
(C) identify any actions that could have been taken by the
agency or the Board of Governors that would have prevented
the company from being in default or in danger of default;
and
(D) recommend appropriate administrative or legislative
action.
(2) Reports and testimony.--Not later than 1 year after the
date of appointment of the Corporation as receiver under this
title, the Inspector General of the Federal primary financial
regulatory agency or the Board of Governors shall provide the
report required by paragraph (1) to such agency or the Board
of Governors, and along with such agency or the Board of
Governors, as applicable, shall appear before the appropriate
committees of Congress, if requested, to present the report
required by paragraph (1). Not later than 90 days after the
date of receipt of the report required by paragraph (1), such
agency or the Board of Governors, as applicable, shall
provide a written report to Congress describing any actions
taken in response to the recommendations in the report, and
if no such actions were taken, describing the reasons why no
actions were taken.

SEC. 212. PROHIBITION OF CIRCUMVENTION AND PREVENTION OF
CONFLICTS OF INTEREST.

(a) No Other Funding.--Funds for the orderly liquidation of
any covered financial company under this title shall only be
provided as specified under this title.
(b) Limit on Governmental Actions.--No governmental entity
may take any action to circumvent the purposes of this title.
(c) Conflict of Interest.--In the event that the
Corporation is appointed receiver for more than 1 covered
financial company or is appointed receiver for a covered
financial company and receiver for any insured depository
institution that is an affiliate of such covered financial
company, the Corporation shall take appropriate action, as
necessary to avoid any conflicts of interest that may arise
in connection with multiple receiverships.

SEC. 213. BAN ON SENIOR EXECUTIVES AND DIRECTORS.

(a) Prohibition Authority.--The Board of Governors or, if
the covered financial company was not supervised by the Board
of Governors, the Corporation, may exercise the authority
provided by this section.
(b) Authority To Issue Order.--The appropriate agency
described in subsection (a) may take any action authorized by
subsection (c), if the agency determines that--
(1) a senior executive or a director of the covered
financial company, prior to the appointment of the
Corporation as receiver, has, directly or indirectly--
(A) violated--
(i) any law or regulation;
(ii) any cease-and-desist order which has become final;
(iii) any condition imposed in writing by a Federal agency
in connection with any action on any application, notice, or
request by such company or senior executive; or
(iv) any written agreement between such company and such
agency;
(B) engaged or participated in any unsafe or unsound
practice in connection with any financial company; or
(C) committed or engaged in any act, omission, or practice
which constitutes a breach of the fiduciary duty of such
senior executive or director;
(2) by reason of the violation, practice, or breach
described in any clause of paragraph (1), such senior
executive or director has received financial gain or other
benefit by reason of such violation, practice, or breach and
such violation, practice, or breach contributed to the
failure of the company; and
(3) such violation, practice, or breach--
(A) involves personal dishonesty on the part of such senior
executive or director; or
(B) demonstrates willful or continuing disregard by such
senior executive or director for the safety or soundness of
such company.
(c) Authorized Actions.--
(1) In general.--The appropriate agency for a financial
company, as described in subsection (a), may serve upon a
senior executive or director described in subsection (b) a
written notice of the intention of the agency to prohibit any
further participation by such person, in any manner, in the
conduct of the affairs of any financial company for a period
of time determined by the appropriate agency to be
commensurate with such violation, practice, or breach,
provided such period shall be not less than 2 years.
(2) Procedures.--The due process requirements and other
procedures under section 8(e) of the Federal Deposit
Insurance Act shall apply to actions under this section as if
the covered financial company were an insured depository
institution and the senior executive or director were an
institution-affiliated party, as those terms are defined in
that Act.
(d) Regulations.--The Corporation and the Board of
Governors, in consultation with the Council, shall jointly
prescribe rules or regulations to administer and carry out
this section, including rules, regulations, or guidelines to
further define the term senior executive for the purposes of
this section.
On page 1522, line 11, strike ``The third'' and insert the
following:
``(a) Federal Reserve Act.--The third''.
On page 1528, line 3, strike the end quotation marks and
the final period and insert the following:
``(E) If an entity to which a Federal reserve bank has
provided a loan under this paragraph becomes a covered
financial company, as defined in section 203 of the Restoring
American Financial Stability Act of 2010, at any time while
such loan is outstanding, and the Federal reserve bank incurs
a realized net loss on the loan, then the Federal reserve
bank shall have a claim equal to the amount of the net
realized loss against the covered entity, with the same
priority as an obligation to the Secretary of the Treasury
under sections 210(n) and 210(o) of the Restoring American
Financial Stability Act of 2010.''.
(b) Conforming Amendment.--Section 507(a)(2) of title 11,
United States Code, is amended by inserting ``claims of any
Federal reserve bank related to loans made through programs
or facilities authorized under the third undesignated
paragraph of the Federal Reserve Act ( 12 U.S.C. 343),''
after ``this title,''.
On page 1523, line 17, strike ``of sufficient quality'' and
insert ``sufficient''.
On page 1523, line 18, insert after the period the
following: ``The policies and procedures established by the
Board shall require that a Federal reserve bank assign,
consistent with sound risk management practices and to ensure
protection for the taxpayer, a lendable value to all
collateral for a loan executed by a Federal reserve bank
under this paragraph in determining whether the loan is
secured satisfactorily for purposes of this paragraph.''.
On page 1523, line 19, strike ``(ii)'' and insert the
following:
``(ii) The Board shall establish procedures to prohibit
borrowing from programs and facilities by borrowers that are
insolvent. Such procedures may include a certification from
the chief executive officer (or other authorized officer) of
the borrower, at the time the borrower initially borrows
under the program or facility (with a duty by the borrower to
update the certification if the information in the
certification materially changes), that the borrower is not
insolvent. A borrower shall be considered insolvent for
purposes of this subparagraph, if the borrower is in
bankruptcy, resolution under title II of the Restoring
American Financial Stability Act of 2010, or any other
Federal or State insolvency proceeding.
``(iii) A program or facility that is structured to remove
assets from the balance sheet of a single and specific
company, or that is established for the purpose of assisting
a single and specific company avoid bankruptcy, resolution
under title II of the Restoring American Financial Stability
Act of 2010, or any other Federal or State insolvency
proceeding, shall not be considered a program or facility
with broad-based eligibility.
``(iv)''.
On page 1523, line 18: insert ``and that any such program
is terminated in a timely and orderly fashion'' before
``losses''.
On page 1524, line 11, strike ``assistance,'' and all that
follows through line 12 and insert ``assistance.''.
On page 1525, strike line 21 and all that follows through
page 1528, line 3, and insert the following:
``(D) The information submitted to Congress under
subparagraph (C) related to--
``(i) the identity of the participants in an emergency
lending program or facility commenced under this paragraph;
``(ii) the amounts borrowed by each participant in any such
program or facility;
``(iii) identifying details concerning the assets or
collateral held by, under, or in connection with such a
program or facility,

[[Page S3227]]

shall be kept confidential, upon the written request of the
Chairman of the Board, in which case such information shall
be made available only to the Chairpersons and Ranking
Members of the Committees described in subparagraph (C).''.
On page 1537, line 23, insert before the period the
following: ``and a request for approval of such plan''.
On page 1537, line 23, strike ``Upon'' and all that follows
through page 1538, line 6, and insert the following: ``The
Corporation shall exercise the authority under this section
to issue guarantees up to that specified maximum amount upon
passage of the joint resolution of approval, as provided in
subsection (d). Absent such approval, the Corporation shall
issue no such guarantees.''.
On page 1538, line 16, strike ``Upon'' and all that follows
through page 1547, line 6 and insert the following: ``The
Corporation shall exercise the authority under this section
to issue guarantees up to that specified maximum amount upon
passage of the joint resolution of approval, as provided in
subsection (d). Absent such approval, the Corporation shall
issue no such guarantees.
``(d) Resolution of Approval.--
``(1) Additional debt guarantee authority.--A request by
the President under this section shall be considered granted
by Congress upon adoption of a joint resolution approving
such request. Such joint resolution shall be considered in
the Senate under expedited procedures.
``(2) Fast track consideration in senate.--
``(A) Reconvening.--Upon receipt of a request under
subsection (c), if the Senate has adjourned or recessed for
more than 2 days, the majority leader of the Senate, after
consultation with the minority leader of the Senate, shall
notify the Members of the Senate that, pursuant to this
section, the Senate shall convene not later than the second
calendar day after receipt of such message.
``(B) Placement on calendar.--Upon introduction in the
Senate, the joint resolution shall be placed immediately on
the calendar.
``(C) Floor consideration.--
``(i) In general.--Notwithstanding Rule XXII of the
Standing Rules of the Senate, it is in order at any time
during the period beginning on the 4th day after the date on
which Congress receives a request under subsection (c), and
ending on the 7th day after that date (even though a previous
motion to the same effect has been disagreed to) to move to
proceed to the consideration of the joint resolution, and all
points of order against the joint resolution (and against
consideration of the joint resolution) are waived. The motion
to proceed is not debatable. The motion is not subject to a
motion to postpone. A motion to reconsider the vote by which
the motion is agreed to or disagreed to shall not be in
order. If a motion to proceed to the consideration of the
resolution is agreed to, the joint resolution shall remain
the unfinished business until disposed of.
``(ii) Debate.--Debate on the joint resolution, and on all
debatable motions and appeals in connection therewith, shall
be limited to not more than 10 hours, which shall be divided
equally between the majority and minority leaders or their
designees. A motion further to limit debate is in order and
not debatable. An amendment to, or a motion to postpone, or a
motion to proceed to the consideration of other business, or
a motion to recommit the joint resolution is not in order.
``(iii) Vote on passage.--The vote on passage shall occur
immediately following the conclusion of the debate on the
joint resolution, and a single quorum call at the conclusion
of the debate if requested in accordance with the rules of
the Senate.
``(iv) Rulings of the chair on procedure.--Appeals from the
decisions of the Chair relating to the application of the
rules of the Senate, as the case may be, to the procedure
relating to a joint resolution shall be decided without
debate.
``(3) Rules.--
``(A) Coordination with action by house of
representatives.--If, before the passage by the Senate of a
joint resolution of the Senate, the Senate receives a joint
resolution, from the House of Representatives, then the
following procedures shall apply:
``(i) The joint resolution of the House of Representatives
shall not be referred to a committee.
``(ii) With respect to a joint resolution of the Senate--

``(I) the procedure in the Senate shall be the same as if
no joint resolution had been received from the other House;
but
``(II) the vote on passage shall be on the joint resolution
of the House of Representatives.

``(B) Treatment of joint resolution of house of
representatives.--If the Senate fails to introduce or
consider a joint resolution under this section, the joint
resolution of the House of Representatives shall be entitled
to expedited floor procedures under this subsection.
``(C) Treatment of companion measures.--If, following
passage of the joint resolution in the Senate, the Senate
then receives the companion measure from the House of
Representatives, the companion measure shall not be
debatable.
``(D) Rules of the senate.--This subsection is enacted by
Congress--
``(i) as an exercise of the rulemaking power of the Senate,
and as such it is deemed a part of the rules of the Senate,
but applicable only with respect to the procedure to be
followed in the Senate in the case of a joint resolution, and
it supersedes other rules, only to the extent that it is
inconsistent with such rules; and
``(ii) with full recognition of the constitutional right of
the Senate to change the rules (so far as relating to the
procedure of the Senate) at any time, in the same manner, and
to the same extent as in the case of any other rule of the
Senate.
``(4) Definition.--As used in this subsection, the term
`joint resolution' means only a joint resolution--
``(A) that is introduced not later than 3 calendar days
after the date on which the request referred to in subsection
(c) is received by Congress;
``(B) that does not have a preamble;
``(C) the title of which is as follows: `Joint resolution
relating to the approval of a plan to guarantee obligations
under section 1155 of the Restoring American Financial
Stability Act of 2010'; and
``(D) the matter after the resolving clause of which is as
follows: `That Congress approves the obligation of any amount
described in section 1155(c) of the Restoring American
Financial Stability Act of 2010.'.''.
On page 1550, strike lines 1 through 12, and insert the
following:
(3) Liquidity event.--The term ``liquidity event'' means--
(A) an exceptional and broad reduction in the general
ability of financial market participants--
(i) to sell financial assets without an unusual and
significant discount; or
(ii) to borrow using financial assets as collateral without
an unusual and significant increase in margin; or
(B) an unusual and significant reduction in the ability of
financial market participants to obtain unsecured credit.
On page 1550, strike line 24 and all that follows through
page 1551, line 3, and insert the following:
(b) Federal Deposit Insurance Act.--Section 13(c)(4)(G) of
the Federal Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G))
is amended--
(1) in clause (i)--
(A) in subclause (I), by inserting ``for which the
Corporation has been appointed receiver'' before ``would have
serious''; and
(B) in the undesignated matter following subclause (II), by
inserting ``for the purpose of winding up the insured
depository institution for which the Corporation has been
appointed receiver'' after ``provide assistance under this
section''; and
(2) in clause (v)(I), by striking ``The'' and inserting
``Not later than 3 days after making a determination under
clause (i), the''.
______

SA 3828. Ms. MURKOWSKI 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:

On page 1270, after line 21, insert the following:
(f) Scope of Authority.--No regulation promulgated under
the rulemaking authority of the Bureau under this title shall
be enforceable with respect to an entity that has not
violated a consumer protection statute and is--
(1) an insured depository institution with assets of not
more than $5,000,000,000;
(2) an insured credit union with assets of not more than
$5,000,000,000; or
(3) a nonfinancial institution,

until such time as the Bureau certifies that the regulation
will not result in an unfunded mandate, increase costs for
consumers, or reduce the availability of credit and credit
products.
______

SA 3829. Ms. MURKOWSKI 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:

On page 1270, after line 21, insert the following:
(f) Exemptions.--Each insured depository institution or
insured credit union with assets of not more than
$5,000,000,000, and that has not violated the consumer
protection statutes is exempt from the regulations of the
Bureau. Supervision and enforcement for such institutions
shall remain with the primary prudential regulator for such
institutions.

[[Page S3228]]

______

SA 3830. Mr. VITTER submitted an amendment intended to be 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:

At the end of title II, add the following:

SEC. 212. PROHIBITION ON ALL BAILOUTS.

(a) Prohibition.-- The United States Government shall not
use any funds to bail out creditors or shareholders of any
company by paying to any creditor or shareholder, under this
or any title, any funds for the purpose of covering the
losses of such creditor or shareholder on its investments in
such company or ensuring that the amount that such claimant
receives on a claim is more than such claimant is entitled to
receive on such claim under the Bankruptcy Code. The United
States Government shall not coordinate with or participate in
any effort involving any foreign or multi-national entity to
use foreign or multi-national resources to circumvent the
purposes of this title.
(b) Reestablishing the Federal Reserve Lender of Last
Resort Function.--
(1) Rulemaking required.--Notwithstanding any provision of
this Act or any other provision of law, the Board of
Governors, in consultation with the Secretary, shall, not
later than 12 months after the date of enactment of this Act,
issue rules that shall govern the creation of any emergency
stabilization actions by the Board of Governors.
(2) Requirements.--At a minimum, rules required under this
subsection shall--
(A) prescribe under what circumstances the program may and
may not be used in the future;
(B) prescribe how the program shall ensure that it will
only be used by solvent companies and will not be used to
prevent failure of otherwise failing firms;
(C) determine what type of collateral the Board of
Governors will accept against emergency lending to ensure
that all lending is done against good collateral;
(D) prescribe how much that collateral will be discounted
in order to ensure against taxpayer losses;
(E) address how the Board of Governors and the Secretary
shall ensure that the program does not allocate credit or
artificially prop up certain segments of the economy;
(F) address how the Board of Governors will transfer any
assets associated with losses to the lending program to the
Secretary to ensure that losses from emergency lending do not
lead to inflationary pressures;
(G) establish procedures by which the Board of Governors
would modify and change such rules to ensure a proper notice
and comment period, including publicly documenting the need
for the rule change; and
(H) include any other factors that the Board of Governors
and the Secretary deem appropriate.
(c) Liquidation Required.--All financial companies put into
receivership under this title shall be liquidated within 2
years of being put into receivership. No taxpayer funds may
be used
(1) to provide assistance to--
(A) a company that is in bankruptcy, in receivership under
title II, or in any other insolvency proceeding; or
(B) any company that would otherwise need to be placed into
receivership under Federal or State laws; or
(2) to prevent the liquidation of any financial company
under this title.
(d) Recovery of Funds.--All funds expended in the
liquidation of a financial company under this title shall be
recovered from the disposition of assets of such financial
company.
(e) No Losses to Taxpayers.--Taxpayers shall bear no losses
from the exercise of any authority under this title.
(f) No FDIC Bailouts--Section 13(c)(4)(G) of the Federal
Deposit Insurance Act (12 U.S.C. 1823 (c)(4)G)) is amended--
(1) in clause (i)--
(A) in subclause (I), by inserting ``for which the
Corporation has been appointed receiver'' before ``would have
serious''; and
(B) in the undesignated matter following subclause (II), by
inserting ``for the winding up of the insured depository
institution for which the Corporation has been appointed
receiver'' after ``provide assistance under this section''
______

SA 3831. Mr. SHELBY 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 X and insert the following:

TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

SEC. 1001. SHORT TITLE.

This title may be cited as the ``Consumer Financial
Protection Act of 2010''.

SEC. 1002. DEFINITIONS.

Except as otherwise provided in this title, for purposes of
this title, the following definitions shall apply:
(1) Affiliate.--The term ``affiliate'' means any person
that controls, is controlled by, or is under common control
with another person.
(2) Bureau.--The term ``Bureau'' means the Bureau of
Consumer Financial Protection.
(3) Business of insurance.--The term ``business of
insurance'' means the writing of insurance or the reinsuring
of risks by an insurer, including all acts necessary to such
writing or reinsuring and the activities relating to the
writing of insurance or the reinsuring of risks conducted by
persons who act as, or are, officers, directors, agents, or
employees of insurers or who are other persons authorized to
act on behalf of such persons.
(4) Consumer.--The term ``consumer'' means an individual or
an agent, trustee, or representative acting on behalf of an
individual.
(5) Consumer financial product or service.--The term
``consumer financial product or service'' means any financial
product or service that is described in one or more
categories under--
(A) paragraph (13) and is offered or provided for use by
consumers primarily for personal, family, or household
purposes; or
(B) clause (i), (iii), (ix), or (x) of paragraph (13)(A),
and is delivered, offered, or provided in connection with a
consumer financial product or service referred to in
subparagraph (A).
(6) Covered person.--The term ``covered person'' means--
(A) any person that engages in offering or providing a
consumer financial product or service; and
(B) any affiliate of a person described in subparagraph (A)
if such affiliate acts as a service provider to such person.
(7) Credit.--The term ``credit'' means the right granted by
a person to a consumer to defer payment of a debt, incur debt
and defer its payment, or purchase property or services and
defer payment for such purchase.
(8) Deposit-taking activity.--The term ``deposit-taking
activity'' means--
(A) the acceptance of deposits, maintenance of deposit
accounts, or the provision of services related to the
acceptance of deposits or the maintenance of deposit
accounts;
(B) the acceptance of funds, the provision of other
services related to the acceptance of funds, or the
maintenance of member share accounts by a credit union; or
(C) the receipt of funds or the equivalent thereof, as the
Bureau may determine by rule or order, received or held by a
covered person (or an agent for a covered person) for the
purpose of facilitating a payment or transferring funds or
value of funds between a consumer and a third party.
(9) Designated transfer date.--The term ``designated
transfer date'' means the date established under section
1062.
(10) Director.--The term ``Director'' means the Director of
the Bureau.
(11) Enumerated consumer laws.--The term ``enumerated
consumer laws'' means--
(A) the Alternative Mortgage Transaction Parity Act of 1982
(12 U.S.C. 3801 et seq.);
(B) the Consumer Leasing Act of 1976 (15 U.S.C. 1667 et
seq.);
(C) the Electronic Fund Transfer Act (15 U.S.C. 1693 et
seq.);
(D) the Equal Credit Opportunity Act (15 U.S.C. 1691 et
seq.);
(E) the Fair Credit Billing Act (15 U.S.C. 1666 et seq.);
(F) the Fair Credit Reporting Act (15 U.S.C. 1681 et seq.),
except with respect to sections 615(e) and 628 of that Act
(15 U.S.C. 1681m(e), 1681w);
(G) the Home Owners Protection Act of 1998 (12 U.S.C. 4901
et seq.);
(H) the Fair Debt Collection Practices Act (15 U.S.C. 1692
et seq.);
(I) subsections (c) through (f) of section 43 of the
Federal Deposit Insurance Act (12 U.S.C. 1831t(c)-(f));
(J) sections 502 through 509 of the Gramm-Leach-Bliley Act
(15 U.S.C. 6802-6809);
(K) the Home Mortgage Disclosure Act of 1975 (12 U.S.C.
2801 et seq.);
(L) the Home Ownership and Equity Protection Act of 1994
(15 U.S.C. 1601 note);
(M) the Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2601 et seq.);
(N) the S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C.
5101 et seq.);
(O) the Truth in Lending Act (15 U.S.C. 1601 et seq.); and
(P) the Truth in Savings Act (12 U.S.C. 4301 et seq.).
(12) Federal consumer financial law.--The term ``Federal
consumer financial law'' means the provisions of this title,
the enumerated consumer laws, the laws for which authorities
are transferred under subtitles F and H, and any rule or
order prescribed by the Bureau under this title, an
enumerated consumer law, or pursuant to the authorities
transferred under subtitles F and H.
(13) Financial product or service.--The term ``financial
product or service''--
(A) means--
(i) extending credit and servicing loans, including
acquiring, purchasing, selling,

[[Page S3229]]

brokering, or other extensions of credit (other than solely
extending commercial credit to a person who originates
consumer credit transactions);
(ii) extending or brokering leases of personal or real
property that are the functional equivalent of purchase
finance arrangements, if--

(I) the lease is on a non-operating basis;
(II) the initial term of the lease is at least 90 days; and
(III) in the case of a lease involving real property, at
the inception of the initial lease, the transaction is
intended to result in ownership of the leased property to be
transferred to the lessee, subject to standards prescribed by
the Bureau;

(iii) providing real estate settlement services or
performing appraisals of real estate or personal property;
(iv) engaging in deposit-taking activities, transmitting or
exchanging funds, or otherwise acting as a custodian of funds
or any financial instrument for use by or on behalf of a
consumer;
(v) selling, providing, or issuing stored value or payment
instruments, except that, in the case of a sale of, or
transaction to reload, stored value, only if the seller
exercises substantial control over the terms or conditions of
the stored value provided to the consumer where, for purposes
of this clause--

(I) a seller shall not be found to exercise substantial
control over the terms or conditions of the stored value if
the seller is not a party to the contract with the consumer
for the stored value product, and another person is
principally responsible for establishing the terms or
conditions of the stored value; and
(II) advertising the nonfinancial goods or services of the
seller on the stored value card or device is not in itself an
exercise of substantial control over the terms or conditions;

(vi) providing check cashing, check collection, or check
guaranty services;
(vii) providing payments or other financial data processing
products or services to a consumer by any technological
means, including processing or storing financial or banking
data for any payment instrument, or through any payments
systems or network used for processing payments data,
including payments made through an online banking system or
mobile telecommunications network, except that a person shall
not be deemed to be a covered person with respect to
financial data processing solely because the person--

(I) unknowingly or incidentally processes, stores, or
transmits over the Internet, telephone line, mobile network,
or any other mode of transmission, as part of a stream of
other types of data, financial data in a manner that such
data is undifferentiated from other types of data of the same
form that the person processes, stores, or transmits;
(II) is a merchant, retailer, or seller of any nonfinancial
good or service who engages in financial data processing by
transmitting or storing payments data about a consumer
exclusively for purpose of initiating payments instructions
by the consumer to pay such person for the purchase of, or to
complete a commercial transaction for, such nonfinancial good
or service sold directly by such person to the consumer; or
(III) provides access to a host server to a person for
purposes of enabling that person to establish and maintain a
website;

(viii) providing financial advisory services to consumers
on individual financial matters or relating to proprietary
financial products or services (other than by publishing any
bona fide newspaper, news magazine, or business or financial
publication of general and regular circulation, including
publishing market data, news, or data analytics or investment
information or recommendations that are not tailored to the
individual needs of a particular consumer), including--

(I) providing credit counseling to any consumer; and
(II) providing services to assist a consumer with debt
management or debt settlement, modifying the terms of any
extension of credit, or avoiding foreclosure;

(ix) collecting, analyzing, maintaining, or providing
consumer report information or other account information,
including information relating to the credit history of
consumers, used or expected to be used in connection with any
decision regarding the offering or provision of a consumer
financial product or service, except to the extent that--

(I) a person--

(aa) collects, analyzes, or maintains information that
relates solely to the transactions between a consumer and
such person; or
(bb) provides the information described in item (aa) to an
affiliate of such person; and

(II) the information described in subclause (I)(aa) is not
used by such person or affiliate in connection with any
decision regarding the offering or provision of a consumer
financial product or service to the consumer, other than
credit described in section 1027(a)(2)(A);

(x) collecting debt related to any consumer financial
product or service; and
(xi) such other financial product or service as may be
defined by the Bureau, by regulation, for purposes of this
title, if the Bureau finds that such financial product or
service is--

(I) entered into or conducted as a subterfuge or with a
purpose to evade any Federal consumer financial law; or
(II) permissible for a bank or for a financial holding
company to offer or to provide under any provision of a
Federal law or regulation applicable to a bank or a financial
holding company, and has, or likely will have, a material
impact on consumers; and

(B) does not include the business of insurance.
(14) Foreign exchange.--The term ``foreign exchange'' means
the exchange, for compensation, of currency of the United
States or of a foreign government for currency of another
government.
(15) Insured credit union.--The term ``insured credit
union'' has the same meaning as in section 101 of the Federal
Credit Union Act (12 U.S.C. 1752).
(16) Payment instrument.--The term ``payment instrument''
means a check, draft, warrant, money order, traveler's check,
electronic instrument, or other instrument, payment of funds,
or monetary value (other than currency).
(17) Person.--The term ``person'' means an individual,
partnership, company, corporation, association (incorporated
or unincorporated), trust, estate, cooperative organization,
or other entity.
(18) Person regulated by the commodity futures trading
commission.--The term ``person regulated by the Commodity
Futures Trading Commission'' means any person that is
registered, or required by statute or regulation to be
registered, with the Commodity Futures Trading Commission,
but only to the extent that the activities of such person are
subject to the jurisdiction of the Commodity Futures Trading
Commission under the Commodity Exchange Act.
(19) Person regulated by the commission.--The term ``person
regulated by the Commission'' means a person who is--
(A) a broker or dealer that is required to be registered
under the Securities Exchange Act of 1934;
(B) an investment adviser that is registered under the
Investment Advisers Act of 1940;
(C) an investment company that is required to be registered
under the Investment Company Act of 1940, and any company
that has elected to be regulated as a business development
company under that Act;
(D) a national securities exchange that is required to be
registered under the Securities Exchange Act of 1934;
(E) a transfer agent that is required to be registered
under the Securities Exchange Act of 1934;
(F) a clearing corporation that is required to be
registered under the Securities Exchange Act of 1934;
(G) any self-regulatory organization that is required to be
registered with the Commission;
(H) any nationally recognized statistical rating
organization that is required to be registered with the
Commission;
(I) any securities information processor that is required
to be registered with the Commission;
(J) any municipal securities dealer that is required to be
registered with the Commission;
(K) any other person that is required to be registered with
the Commission under the Securities Exchange Act of 1934; and
(L) any employee, agent, or contractor acting on behalf of,
registered with, or providing services to, any person
described in any of subparagraphs (A) through (K), but only
to the extent that any person described in any of
subparagraphs (A) through (K), or the employee, agent, or
contractor of such person, acts in a regulated capacity.
(20) Person regulated by a state insurance regulator.--The
term ``person regulated by a State insurance regulator''
means any person that is engaged in the business of insurance
and subject to regulation by any State insurance regulator,
but only to the extent that such person acts in such
capacity.
(21) Person that performs income tax preparation activities
for consumers.--The term ``person that performs income tax
preparation activities for consumers'' means--
(A) any tax return preparer (as defined in section
7701(a)(36) of the Internal Revenue Code of 1986), regardless
of whether compensated, but only to the extent that the
person acts in such capacity;
(B) any person regulated by the Secretary under section 330
of title 31, United States Code, but only to the extent that
the person acts in such capacity; and
(C) any authorized IRS e-file Providers (as defined for
purposes of section 7216 of the Internal Revenue Code of
1986), but only to the extent that the person acts in such
capacity.
(22) Prudential regulator.--The term ``prudential
regulator'' means--
(A) in the case of an insured depository institution, the
appropriate Federal banking agency, as that term is defined
in section 3 of the Federal Deposit Insurance Act; and
(B) in the case of an insured credit union, the National
Credit Union Administration.
(23) Related person.--The term ``related person''--
(A) shall apply only with respect to a covered person that
is not a bank holding company (as that term is defined in
section 2 of the Bank Holding Company Act of 1956), credit
union, or depository institution;
(B) shall be deemed to mean a covered person for all
purposes of any provision of Federal consumer financial law;
and
(C) means--
(i) any director, officer, or employee charged with
managerial responsibility for,

[[Page S3230]]

or controlling shareholder of, or agent for, such covered
person;
(ii) any shareholder, consultant, joint venture partner, or
other person, as determined by the Bureau (by rule or on a
case-by-case basis) who materially participates in the
conduct of the affairs of such covered person; and
(iii) any independent contractor (including any attorney,
appraiser, or accountant) who knowingly or recklessly
participates in any--

(I) violation of any provision of law or regulation; or
(II) breach of a fiduciary duty.

(24) Service provider.--
(A) In general.--The term ``service provider'' means any
person that provides a material service to a covered person
in connection with the offering or provision by such covered
person of a consumer financial product or service, including
a person that--
(i) participates in designing, operating, or maintaining
the consumer financial product or service; or
(ii) processes transactions relating to the consumer
financial product or service (other than unknowingly or
incidentally transmitting or processing financial data in a
manner that such data is undifferentiated from other types of
data of the same form as the person transmits or processes).
(B) Exceptions.--The term ``service provider'' does not
include a person solely by virtue of such person offering or
providing to a covered person--
(i) a support service of a type provided to businesses
generally or a similar ministerial service; or
(ii) time or space for an advertisement for a consumer
financial product or service through print, newspaper, or
electronic media.
(C) Rule of construction.--A person that is a service
provider shall be deemed to be a covered person to the extent
that such person engages in the offering or provision of its
own consumer financial product or service.
(25) State.--The term ``State'' means any State, territory,
or possession of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, Guam, American Samoa, or the United
States Virgin Islands or any federally recognized Indian
tribe, as defined by the Secretary of the Interior under
section 104(a) of the Federally Recognized Indian Tribe List
Act of 1994 (25 U.S.C. 479a-1(a)).
(26) Stored value.--The term ``stored value'' means funds
or monetary value represented in any electronic format,
whether or not specially encrypted, and stored or capable of
storage on electronic media in such a way as to be
retrievable and transferred electronically, and includes a
prepaid debit card or product, or any other similar product,
regardless of whether the amount of the funds or monetary
value may be increased or reloaded.
(27) Transmitting or exchanging funds.--The term
``transmitting or exchanging funds'' means receiving
currency, monetary value, or payment instruments from a
consumer for the purpose of exchanging or transmitting the
same by any means, including transmission by wire, facsimile,
electronic transfer, courier, the Internet, or through bill
payment services or through other businesses that facilitate
third-party transfers within the United States or to or from
the United States.

Subtitle A--Bureau of Consumer Financial Protection

SEC. 1011. ESTABLISHMENT OF THE BUREAU.

(a) Bureau Established.--There is established in the
Federal Reserve System the Bureau of Consumer Financial
Protection, which shall regulate the offering and provision
of consumer financial products or services under the Federal
consumer financial laws.
(b) Director and Deputy Director.--
(1) In general.--There is established the position of the
Director, who shall serve as the head of the Bureau.
(2) Appointment.--Subject to paragraph (3), the Director
shall be appointed by the President, by and with the advice
and consent of the Senate.
(3) Qualification.--The President shall nominate the
Director from among individuals who are citizens of the
United States.
(4) Compensation.--The Director shall be compensated at the
rate prescribed for level II of the Executive Schedule under
section 5313 of title 5, United States Code.
(5) Deputy director.--There is established the position of
Deputy Director, who shall--
(A) be appointed by the Director; and
(B) serve as acting Director in the absence or
unavailability of the Director.
(c) Term.--
(1) In general.--The Director shall serve for a term of 5
years.
(2) Expiration of term.--An individual may serve as
Director after the expiration of the term for which
appointed, until a successor has been appointed and
qualified.
(3) Removal for cause.--The President may remove the
Director for inefficiency, neglect of duty, or malfeasance in
office.
(d) Service Restriction.--No Director or Deputy Director
may hold any office, position, or employment in any Federal
reserve bank, Federal home loan bank, covered person, or
service provider during the period of service of such person
as Director or Deputy Director.
(e) Offices.--The principal office of the Bureau shall be
in the District of Columbia. The Director may establish
regional offices of the Bureau, including in cities in which
the Federal reserve banks, or branches of such banks, are
located, in order to carry out the responsibilities assigned
to the Bureau under the Federal consumer financial laws.

SEC. 1012. EXECUTIVE AND ADMINISTRATIVE POWERS.

(a) Powers of the Bureau.--The Bureau is authorized to
establish the general policies of the Bureau with respect to
all executive and administrative functions, including--
(1) the establishment of rules for conducting the general
business of the Bureau, in a manner not inconsistent with
this title;
(2) to bind the Bureau and enter into contracts;
(3) directing the establishment and maintenance of
divisions or other offices within the Bureau, in order to
carry out the responsibilities under the Federal consumer
financial laws, and to satisfy the requirements of other
applicable law;
(4) to coordinate and oversee the operation of all
administrative, enforcement, and research activities of the
Bureau;
(5) to adopt and use a seal;
(6) to determine the character of and the necessity for the
obligations and expenditures of the Bureau;
(7) the appointment and supervision of personnel employed
by the Bureau;
(8) the distribution of business among personnel appointed
and supervised by the Director and among administrative units
of the Bureau;
(9) the use and expenditure of funds;
(10) implementing the Federal consumer financial laws
through rules, orders, guidance, interpretations, statements
of policy, examinations, and enforcement actions; and
(11) performing such other functions as may be authorized
or required by law.
(b) Delegation of Authority.--The Director of the Bureau
may delegate to any duly authorized employee, representative,
or agent any power vested in the Bureau by law.
(c) Autonomy of the Bureau.--
(1) Coordination with the board of governors.--
Notwithstanding section 18 of the Federal Trade Commission
Act (15 U.S.C. 57a) and any other provision of law applicable
to the supervision or examination of persons with respect to
Federal consumer financial laws, the Board of Governors may
delegate to the Bureau the authorities to examine persons
subject to the jurisdiction of the Board of Governors for
compliance with the Federal consumer financial laws.
(2) Autonomy.--Notwithstanding the authorities granted to
the Board of Governors under the Federal Reserve Act, the
Board of Governors may not--
(A) intervene in any matter or proceeding before the
Director, including examinations or enforcement actions,
unless otherwise specifically provided by law;
(B) appoint, direct, or remove any officer or employee of
the Bureau; or
(C) merge or consolidate the Bureau, or any of the
functions or responsibilities of the Bureau, with any
division or office of the Board of Governors or the Federal
reserve banks.
(3) Rules and orders.--No rule or order of the Bureau shall
be subject to approval or review by the Board of Governors.
The Board of Governors may not delay or prevent the issuance
of any rule or order of the Bureau.
(4) Recommendations and testimony.--No officer or agency of
the United States shall have any authority to require the
Director or any other officer of the Bureau to submit
legislative recommendations, or testimony or comments on
legislation, to any officer or agency of the United States
for approval, comments, or review prior to the submission of
such recommendations, testimony, or comments to the Congress,
if such recommendations, testimony, or comments to the
Congress include a statement indicating that the views
expressed therein are those of the Director or such officer,
and do not necessarily reflect the views of the Board of
Governors or the President.

SEC. 1013. ADMINISTRATION.

(a) Personnel.--
(1) Appointment.--
(A) In general.--The Director may fix the number of, and
appoint and direct, all employees of the Bureau.
(B) Employees of the bureau.--The Director is authorized to
employ attorneys, compliance examiners, compliance
supervision analysts, economists, statisticians, and other
employees as may be deemed necessary to conduct the business
of the Bureau. Notwithstanding any other provision of law,
all such employees shall be appointed and compensated on
terms and conditions that are consistent with the terms and
conditions set forth in section 11(l) of the Federal Reserve
Act (12 U.S.C. 248(l)).
(2) Compensation.--The Director shall at all times provide
compensation and benefits to each class of employees that, at
a minimum, are equivalent to the compensation and benefits
then being provided by the Board of Governors for the
corresponding class of employees.
(b) Specific Functional Units.--
(1) Research.--The Director shall establish a unit whose
functions shall include researching, analyzing, and reporting
on--
(A) developments in markets for consumer financial products
or services, including market areas of alternative consumer
financial products or services with high growth rates and
areas of risk to consumers;
(B) access to fair and affordable credit for traditionally
underserved communities;

[[Page S3231]]

(C) consumer awareness, understanding, and use of
disclosures and communications regarding consumer financial
products or services;
(D) consumer awareness and understanding of costs, risks,
and benefits of consumer financial products or services; and
(E) consumer behavior with respect to consumer financial
products or services.
(2) Community affairs.--The Director shall establish a unit
whose functions shall include providing information,
guidance, and technical assistance regarding the offering and
provision of consumer financial products or services to
traditionally underserved consumers and communities.
(3) Collecting and tracking complaints.--
(A) In general.--The Director shall establish a unit whose
functions shall include establishing a single, toll-free
telephone number, a website, and a database to facilitate the
centralized collection of, monitoring of, and response to
consumer complaints regarding consumer financial products or
services. The Director shall coordinate with other Federal
agencies to route complaints to other Federal regulators,
where appropriate.
(B) Routing calls to states.--To the extent practicable,
State agencies may receive appropriate complaints from the
systems established under subparagraph (A), if--
(i) the State agency system has the functional capacity to
receive calls or electronic reports routed by the Bureau
systems; and
(ii) the State agency has satisfied any conditions of
participation in the system that the Bureau may establish,
including treatment of personally identifiable information
and sharing of information on complaint resolution or related
compliance procedures and resources.
(C) Reports to the congress.--The Director shall present an
annual report to Congress not later than March 31 of each
year on the complaints received by the Bureau in the prior
year regarding consumer financial products and services. Such
report shall include information and analysis about complaint
numbers, complaint types, and, where applicable, information
about resolution of complaints.
(D) Data sharing required.--To facilitate preparation of
the reports required under subparagraph (C), supervision and
enforcement activities, and monitoring of the market for
consumer financial products and services, the Bureau shall
share consumer complaint information with prudential
regulators, other Federal agencies, and State agencies,
consistent with Federal law applicable to personally
identifiable information. The prudential regulators and other
Federal agencies shall share data relating to consumer
complaints regarding consumer financial products and services
with the Bureau, consistent with Federal law applicable to
personally identifiable information.
(c) Office of Fair Lending and Equal Opportunity.--
(1) Establishment.--The Director shall establish within the
Bureau the Office of Fair Lending and Equal Opportunity.
(2) Functions.--The Office of Fair Lending and Equal
Opportunity shall have such powers and duties as the Director
may delegate to the Office, including--
(A) providing oversight and enforcement of Federal laws
intended to ensure the fair, equitable, and nondiscriminatory
access to credit for both individuals and communities that
are enforced by the Bureau, including the Equal Credit
Opportunity Act and the Home Mortgage Disclosure Act;
(B) coordinating fair lending and fair housing efforts of
the Bureau with other Federal agencies and State regulators,
as appropriate, to promote consistent, efficient, and
effective enforcement of Federal fair lending laws;
(C) working with private industry, fair lending, civil
rights, consumer and community advocates on the promotion of
fair lending compliance and education; and
(D) providing annual reports to Congress on the efforts of
the Bureau to fulfill its fair lending mandate.
(3) Administration of office.--There is established the
position of Assistant Director of the Bureau for Fair Lending
and Equal Opportunity, who--
(A) shall be appointed by the Director; and
(B) shall carry out such duties as the Director may
delegate to such Assistant Director.
(d) Office of Financial Literacy.--
(1) Establishment.--The Director shall establish an Office
of Financial Literacy, which shall be responsible for
developing and implementing initiatives intended to educate
and empower consumers to make better informed financial
decisions.
(2) Other duties.--The Office of Financial Literacy shall
develop and implement a strategy to improve the financial
literacy of consumers that includes measurable goals and
objectives, in consultation with the Financial Literacy and
Education Commission, consistent with the National Strategy
for Financial Education, through activities including
providing opportunities for consumers to access--
(A) financial counseling;
(B) information to assist with the evaluation of credit
products and the understanding of credit histories and
scores;
(C) savings, borrowing, and other services found at
mainstream financial institutions;
(D) activities intended to--
(i) prepare the consumer for educational expenses and the
submission of financial aid applications, and other major
purchases;
(ii) reduce debt; and
(iii) improve the financial situation of the consumer;
(E) assistance in developing long-term savings strategies;
and
(F) wealth building and financial services during the
preparation process to claim earned income tax credits and
Federal benefits.
(3) Coordination.--The Office of Financial Literacy shall
coordinate with other units within the Bureau in carrying out
its functions, including--
(A) working with the Community Affairs Office to implement
the strategy to improve financial literacy of consumers; and
(B) working with the research unit established by the
Director to conduct research related to consumer financial
education and counseling.
(4) Report.--Not later than 24 months after the designated
transfer date, and annually thereafter, the Director shall
submit a report on its financial literacy activities and
strategy to improve financial literacy of consumers to--
(A) the Committee on Banking, Housing, and Urban Affairs of
the Senate; and
(B) the Committee on Financial Services of the House of
Representatives.
(5) Membership in financial literacy and education
commission.--Section 513(c)(1) of the Financial Literacy and
Education Improvement Act (20 U.S.C. 9702(c)(1)) is amended--
(A) in subparagraph (B), by striking ``and'' at the end;
(B) by redesignating subparagraph (C) as subparagraph (D);
and
(C) by inserting after subparagraph (B) the following new
subparagraph:
``(C) the Director of the Bureau of Consumer Financial
Protection; and''.
(6) Conforming amendment.--Section 513(d) of the Financial
Literacy and Education Improvement Act (20 U.S.C. 9702(d)) is
amended by adding at the end the following: ``The Director of
the Bureau of Consumer Financial Protection shall serve as
the Vice Chairman.''.

SEC. 1014. CONSUMER ADVISORY BOARD.

(a) Establishment Required.--The Director shall establish a
Consumer Advisory Board to advise and consult with the Bureau
in the exercise of its functions under the Federal consumer
financial laws, and to provide information on emerging
practices in the consumer financial products or services
industry, including regional trends, concerns, and other
relevant information.
(b) Membership.--In appointing the members of the Consumer
Advisory Board, the Director shall seek to assemble experts
in consumer protection, financial services, community
development, fair lending, and consumer financial products or
services and seek representation of the interests of covered
persons and consumers, without regard to party affiliation.
Not fewer than 6 members shall be appointed upon the
recommendation of the regional Federal Reserve Bank
Presidents, on a rotating basis.
(c) Meetings.--The Consumer Advisory Board shall meet from
time to time at the call of the Director, but, at a minimum,
shall meet at least twice in each year.
(d) Compensation and Travel Expenses.--Members of the
Consumer Advisory Board who are not full-time employees of
the United States shall--
(1) be entitled to receive compensation at a rate fixed by
the Director while attending meetings of the Consumer
Advisory Board, including travel time; and
(2) be allowed travel expenses, including transportation
and subsistence, while away from their homes or regular
places of business.

SEC. 1015. COORDINATION.

The Bureau shall coordinate with the Commission, the
Commodity Futures Trading Commission, and other Federal
agencies and State regulators, as appropriate, to promote
consistent regulatory treatment of consumer financial and
investment products and services.

SEC. 1016. APPEARANCES BEFORE AND REPORTS TO CONGRESS.

(a) Appearances Before Congress.--The Director of the
Bureau shall appear before the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives at semi-
annual hearings regarding the reports required under
subsection (b).
(b) Reports Required.--The Bureau shall, concurrent with
each semi-annual hearing referred to in subsection (a),
prepare and submit to the President and to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives, a report, beginning with the session
following the designated transfer date.
(c) Contents.--The reports required by subsection (b) shall
include--
(1) a discussion of the significant problems faced by
consumers in shopping for or obtaining consumer financial
products or services;
(2) a justification of the budget request of the previous
year;
(3) a list of the significant rules and orders adopted by
the Bureau, as well as other significant initiatives
conducted by the Bureau, during the preceding year and the
plan of the Bureau for rules, orders, or other initiatives to
be undertaken during the upcoming period;

[[Page S3232]]

(4) an analysis of complaints about consumer financial
products or services that the Bureau has received and
collected in its central database on complaints during the
preceding year;
(5) a list, with a brief statement of the issues, of the
public supervisory and enforcement actions to which the
Bureau was a party during the preceding year;
(6) the actions taken regarding rules, orders, and
supervisory actions with respect to covered persons which are
not credit unions or depository institutions;
(7) an assessment of significant actions by State attorneys
general or State regulators relating to Federal consumer
financial law; and
(8) an analysis of the efforts of the Bureau to fulfill the
fair lending mission of the Bureau.

SEC. 1017. FUNDING; PENALTIES AND FINES.

(a) Transfer of Funds From Board of Governors.--
(1) In general.--Each year (or quarter of such year),
beginning on the designated transfer date, and each quarter
thereafter, the Board of Governors shall transfer to the
Bureau from the combined earnings of the Federal Reserve
System, the amount determined by the Director to be
reasonably necessary to carry out the authorities of the
Bureau under Federal consumer financial law, taking into
account such other sums made available to the Bureau from the
preceding year (or quarter of such year).
(2) Funding cap.--
(A) In general.--Notwithstanding paragraph (1), and in
accordance with this paragraph, the amount that shall be
transferred to the Bureau in each fiscal year shall not
exceed a fixed percentage of the total operating expenses of
the Federal Reserve System, as reported in the Annual Report,
2009, of the Board of Governors, equal to--
(i) 10 percent of such expenses in fiscal year 2011;
(ii) 11 percent of such expenses in fiscal year 2012; and
(iii) 12 percent of such expenses in fiscal year 2013, and
in each year thereafter.
(B) Amount adjusted for inflation.--The dollar amount
referred to in subparagraph (A)(iii) shall be adjusted
annually, using the percent by which the average urban
consumer price index for the quarter preceding the date of
the payment differs from the average of that index for the
same quarter in the prior year.
(3) Transition period.--Beginning on the date of enactment
of this Act and until the designated transfer date, the Board
of Governors shall transfer to the Bureau the amount
estimated by the Secretary needed to carry out the
authorities granted to the Bureau under Federal consumer
financial law, from the date of enactment of this Act until
the designated transfer date.
(4) Budget and financial management.--
(A) Financial operating plans and forecasts.--The Director
shall provide to the Director of the Office of Management and
Budget copies of the financial operating plans and forecasts
of the Director, as prepared by the Director in the ordinary
course of the operations of the Bureau, and copies of the
quarterly reports of the financial condition and results of
operations of the Bureau, as prepared by the Director in the
ordinary course of the operations of the Bureau.
(B) Financial statements.--The Bureau shall prepare
annually a statement of--
(i) assets and liabilities and surplus or deficit;
(ii) income and expenses; and
(iii) sources and application of funds.
(C) Financial management systems.--The Bureau shall
implement and maintain financial management systems that
comply substantially with Federal financial management
systems requirements and applicable Federal accounting
standards.
(D) Assertion of internal controls.--The Director shall
provide to the Comptroller General of the United States an
assertion as to the effectiveness of the internal controls
that apply to financial reporting by the Bureau, using the
standards established in section 3512(c) of title 31, United
States Code.
(E) Rule of construction.--This subsection may not be
construed as implying any obligation on the part of the
Director to consult with or obtain the consent or approval of
the Director of the Office of Management and Budget with
respect to any report, plan, forecast, or other information
referred to in subparagraph (A) or any jurisdiction or
oversight over the affairs or operations of the Bureau.
(5) Audit of the bureau.--
(A) In general.--The Comptroller General shall annually
audit the financial transactions of the Bureau in accordance
with the United States generally accepted government auditing
standards, as may be prescribed by the Comptroller General of
the United States. The audit shall be conducted at the place
or places where accounts of the Bureau are normally kept. The
representatives of the Government Accountability Office shall
have access to the personnel and to all books, accounts,
documents, papers, records (including electronic records),
reports, files, and all other papers, automated data, things,
or property belonging to or under the control of or used or
employed by the Bureau pertaining to its financial
transactions and necessary to facilitate the audit, and such
representatives shall be afforded full facilities for
verifying transactions with the balances or securities held
by depositories, fiscal agents, and custodians. All such
books, accounts, documents, records, reports, files, papers,
and property of the Bureau shall remain in possession and
custody of the Bureau. The Comptroller General may obtain and
duplicate any such books, accounts, documents, records,
working papers, automated data and files, or other
information relevant to such audit without cost to the
Comptroller General, and the right of access of the
Comptroller General to such information shall be enforceable
pursuant to section 716(c) of title 31, United States Code.
(B) Report.--The Comptroller General shall submit to the
Congress a report of each annual audit conducted under this
subsection. The report to the Congress shall set forth the
scope of the audit and shall include the statement of assets
and liabilities and surplus or deficit, the statement of
income and expenses, the statement of sources and application
of funds, and such comments and information as may be deemed
necessary to inform Congress of the financial operations and
condition of the Bureau, together with such recommendations
with respect thereto as the Comptroller General may deem
advisable. A copy of each report shall be furnished to the
President and to the Bureau at the time submitted to the
Congress.
(C) Assistance and costs.--For the purpose of conducting an
audit under this subsection, the Comptroller General may, in
the discretion of the Comptroller General, employ by
contract, without regard to section 3709 of the Revised
Statutes of the United States (41 U.S.C. 5), professional
services of firms and organizations of certified public
accountants for temporary periods or for special purposes.
Upon the request of the Comptroller General, the Director of
the Bureau shall transfer to the Government Accountability
Office from funds available, the amount requested by the
Comptroller General to cover the full costs of any audit and
report conducted by the Comptroller General. The Comptroller
General shall credit funds transferred to the account
established for salaries and expenses of the Government
Accountability Office, and such amount shall be available
upon receipt and without fiscal year limitation to cover the
full costs of the audit and report.
(b) Consumer Financial Protection Fund.--
(1) Separate fund in federal reserve board established.--
There is established in the Federal Reserve Board a separate
fund, to be known as the ``Consumer Financial Protection
Fund'' (referred to in this section as the ``Bureau Fund'').
(2) Fund receipts.--All amounts transferred to the Bureau
under subsection (a) shall be deposited into the Bureau Fund.
(3) Investment authority.--
(A) Amounts in bureau fund may be invested.--The Bureau may
request the Board of Governors to invest the portion of the
Bureau Fund that is not, in the judgment of the Bureau,
required to meet the current needs of the Bureau.
(B) Eligible investments.--Investments authorized by this
paragraph shall be made by the Board of Governors in
obligations of the United States or obligations that are
guaranteed as to principal and interest by the United States,
with maturities suitable to the needs of the Bureau Fund, as
determined by the Bureau.
(C) Interest and proceeds credited.--The interest on, and
the proceeds from the sale or redemption of, any obligations
held in the Bureau Fund shall be credited to the Bureau Fund.
(c) Use of Funds.--
(1) In general.--Funds obtained by, transferred to, or
credited to the Bureau Fund shall be immediately available to
the Bureau and under the control of the Director, and shall
remain available until expended, to pay the expenses of the
Bureau in carrying out its duties and responsibilities. The
compensation of the Director and other employees of the
Bureau and all other expenses thereof may be paid from,
obtained by, transferred to, or credited to the Bureau Fund
under this section.
(2) Funds that are not government funds.--Funds obtained by
or transferred to the Bureau Fund shall not be construed to
be Government funds or appropriated monies.
(3) Amounts not subject to apportionment.--Notwithstanding
any other provision of law, amounts in the Bureau Fund and in
the Civil Penalty Fund established under subsection (d) shall
not be subject to apportionment for purposes of chapter 15 of
title 31, United States Code, or under any other authority.
(d) Penalties and Fines.--
(1) Establishment of victims relief fund.--There is
established in the Federal Reserve Board a fund to be known
as the ``Consumer Financial Protection Civil Penalty Fund''
(referred to in this subsection as the ``Civil Penalty
Fund''). If the Bureau obtains a civil penalty against any
person in any judicial or administrative action under Federal
consumer financial laws, the Bureau shall deposit into the
Civil Penalty Fund, the amount of the penalty collected.
(2) Payment to victims.--Amounts in the Civil Penalty Fund
shall be available to the Bureau, without fiscal year
limitation, for payments to the victims of activities for
which civil penalties have been imposed under the Federal
consumer financial laws. To the extent such victims cannot be
located or such payments are otherwise not practicable, the
Bureau may use such funds for the purpose of consumer
education and financial literacy programs.

[[Page S3233]]

SEC. 1018. EFFECTIVE DATE.

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

Subtitle B--General Powers of the Bureau

SEC. 1021. PURPOSE, OBJECTIVES, AND FUNCTIONS.

(a) Purpose.--The Bureau shall seek to implement and, where
applicable, enforce Federal consumer financial law
consistently for the purpose of ensuring that markets for
consumer financial products and services are fair,
transparent, and competitive.
(b) Objectives.--The Bureau is authorized to exercise its
authorities under Federal consumer financial law for the
purposes of ensuring that, with respect to consumer financial
products and services--
(1) consumers are provided with timely and understandable
information to make responsible decisions about financial
transactions;
(2) consumers are protected from unfair, deceptive, or
abusive acts and practices and from discrimination;
(3) outdated, unnecessary, or unduly burdensome regulations
are regularly identified and addressed in order to reduce
unwarranted regulatory burdens;
(4) Federal consumer financial law is enforced
consistently, without regard to the status of a person as a
depository institution, in order to promote fair competition;
and
(5) markets for consumer financial products and services
operate transparently and efficiently to facilitate access
and innovation.
(c) Functions.--The primary functions of the Bureau are--
(1) conducting financial education programs;
(2) collecting, investigating, and responding to consumer
complaints;
(3) collecting, researching, monitoring, and publishing
information relevant to the functioning of markets for
consumer financial products and services to identify risks to
consumers and the proper functioning of such markets;
(4) subject to sections 1024 through 1026, supervising
covered persons for compliance with Federal consumer
financial law, and taking appropriate enforcement action to
address violations of Federal consumer financial law;
(5) issuing rules, orders, and guidance implementing
Federal consumer financial law; and
(6) performing such support activities as may be necessary
or useful to facilitate the other functions of the Bureau.

SEC. 1022. RULEMAKING AUTHORITY.

(a) In General.--The Bureau is authorized to exercise its
authorities under Federal consumer financial law to
administer, enforce, and otherwise implement the provisions
of Federal consumer financial law.
(b) Rulemaking, Orders, and Guidance.--
(1) General authority.--The Director may prescribe rules
and issue orders and guidance, as may be necessary or
appropriate to enable the Bureau to administer and carry out
the purposes and objectives of the Federal consumer financial
laws, and to prevent evasions thereof.
(2) Standards for rulemaking.--In prescribing a rule under
the Federal consumer financial laws--
(A) the Bureau shall consider the potential benefits and
costs to consumers and covered persons, including the
potential reduction of access by consumers to consumer
financial products or services resulting from such rule;
(B) the Bureau shall consult with the appropriate
prudential regulators or other Federal agencies prior to
proposing a rule and during the comment process regarding
consistency with prudential, market, or systemic objectives
administered by such agencies; and
(C) if, during the consultation process described in
subparagraph (B), a prudential regulator provides the Bureau
with a written objection to the proposed rule of the Bureau
or a portion thereof, the Bureau shall include in the
adopting release a description of the objection and the basis
for the Bureau decision, if any, regarding such objection,
except that nothing in this clause shall be construed as
altering or limiting the procedures under section 1023 that
may apply to any rule prescribed by the Bureau.
(3) Exemptions.--
(A) In general.--The Bureau, by rule, may conditionally or
unconditionally exempt any class of covered persons, service
providers, or consumer financial products or services, from
any provision of this title, or from any rule issued under
this title, as the Bureau determines necessary or appropriate
to carry out the purposes and objectives of this title,
taking into consideration the factors in subparagraph (B).
(B) Factors.--In issuing an exemption, as permitted under
subparagraph (A), the Bureau shall, as appropriate, take into
consideration--
(i) the total assets of the class of covered persons;
(ii) the volume of transactions involving consumer
financial products or services in which the class of covered
persons engages; and
(iii) existing provisions of law which are applicable to
the consumer financial product or service and the extent to
which such provisions provide consumers with adequate
protections.
(4) Exclusive rulemaking authority.--Notwithstanding any
other provisions of Federal law, to the extent that a
provision of Federal consumer financial law authorizes the
Bureau and another Federal agency to issue regulations under
that provision of law for purposes of assuring compliance
with Federal consumer financial law and any regulations
thereunder, the Bureau shall have the exclusive authority to
prescribe rules subject to those provisions of law.
(c) Monitoring.--
(1) In general.--In order to support its rulemaking and
other functions, the Bureau shall monitor for risks to
consumers in the offering or provision of consumer financial
products or services, including developments in markets for
such products or services.
(2) Considerations.--In allocating its resources to perform
the monitoring required by this section, the Bureau may
consider, among other factors--
(A) likely risks and costs to consumers associated with
buying or using a type of consumer financial product or
service;
(B) understanding by consumers of the risks of a type of
consumer financial product or service;
(C) the legal protections applicable to the offering or
provision of a consumer financial product or service,
including the extent to which the law is likely to adequately
protect consumers;
(D) rates of growth in the offering or provision of a
consumer financial product or service;
(E) the extent, if any, to which the risks of a consumer
financial product or service may disproportionately affect
traditionally underserved consumers; or
(F) the types, number, and other pertinent characteristics
of covered persons that offer or provide the consumer
financial product or service.
(3) Reports.--The Bureau shall publish not fewer than 1
report of significant findings of its monitoring required by
this subsection in each calendar year, beginning with the
first calendar year that begins at least 1 year after the
designated transfer date.
(4) Confidentiality rules.--The Bureau shall prescribe
rules regarding the confidential treatment of information
obtained from persons in connection with the exercise of its
authorities under Federal consumer financial law.
(A) Access by the bureau to reports of other regulators.--
(i) Examination and financial condition reports.--Upon
providing reasonable assurances of confidentiality, the
Bureau shall have access to any report of examination or
financial condition made by a prudential regulator or other
Federal agency having jurisdiction over a covered person or
service provider, and to all revisions made to any such
report.
(ii) Provision of other reports to the bureau.--In addition
to the reports described in clause (i), a prudential
regulator or other Federal agency having jurisdiction over a
covered person or service provider may, in its discretion,
furnish to the Bureau any other report or other confidential
supervisory information concerning any insured depository
institution, credit union, or other entity examined by such
agency under authority of any provision of Federal law.
(B) Access by other regulators to reports of the bureau.--
(i) Examination reports.--Upon providing reasonable
assurances of confidentiality, a prudential regulator, a
State regulator, or any other Federal agency having
jurisdiction over a covered person or service provider shall
have access to any report of examination made by the Bureau
with respect to such person, and to all revisions made to any
such report.
(ii) Provision of other reports to other regulators.--In
addition to the reports described in clause (i), the Bureau
may, in its discretion, furnish to a prudential regulator or
other agency having jurisdiction over a covered person or
service provider any other report or other confidential
supervisory information concerning such person examined by
the Bureau under the authority of any other provision of
Federal law.
(5) Privacy considerations.--In collecting information from
any person, publicly releasing information held by the
Bureau, or requiring covered persons to publicly report
information, the Bureau shall take steps to ensure that
proprietary, personal, or confidential consumer information
that is protected from public disclosure under section 552(b)
or 552a of title 5, United States Code, or any other
provision of law, is not made public under this title.
(d) Assessment of Significant Rules.--
(1) In general.--The Bureau shall conduct an assessment of
each significant rule or order adopted by the Bureau under
Federal consumer financial law. The assessment shall address,
among other relevant factors, the effectiveness of the rule
or order in meeting the purposes and objectives of this title
and the specific goals stated by the Bureau. The assessment
shall reflect available evidence and any data that the Bureau
reasonably may collect.
(2) Reports.--The Bureau shall publish a report of its
assessment under this subsection not later than 5 years after
the effective date of the subject rule or order.
(3) Public comment required.--Before publishing a report of
its assessment, the Bureau shall invite public comment on
recommendations for modifying, expanding, or eliminating the
newly adopted significant rule or order.

[[Page S3234]]

SEC. 1023. REVIEW OF BUREAU REGULATIONS.

(a) Review of Bureau Regulations.--On the petition of a
member agency of the Council, the Council may set aside a
final regulation prescribed by the Bureau, or any provision
thereof, if the Council decides, in accordance with
subsection (c), that the regulation or provision would put
the safety and soundness of the United States banking system
or the stability of the financial system of the United States
at risk.
(b) Petition.--
(1) Procedure.--An agency represented by a member of the
Council may petition the Council, in writing, and in
accordance with rules prescribed pursuant to subsection (f),
to stay the effectiveness of, or set aside, a regulation if
the member agency filing the petition--
(A) has in good faith attempted to work with the Bureau to
resolve concerns regarding the effect of the rule on the
safety and soundness of the United States banking system or
the stability of the financial system of the United States;
and
(B) files the petition with the Council not later than 10
days after the date on which the regulation has been
(C) published in the Federal Register.
(2) Publication.--Any petition filed with the Council under
this section shall be published in the Federal Register and
transmitted contemporaneously with filing to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives.
(c) Stays and Set Asides.--
(1) Stay.--
(A) In general.--Upon the request of any member agency, the
Chairperson of the Council may stay the effectiveness of a
regulation for the purpose of allowing appropriate
consideration of the petition by the Council.
(B) Expiration.--A stay issued under this paragraph shall
expire on the earlier of--
(i) 90 days after the date of filing of the petition under
subsection (b); or
(ii) the date on which the Council makes a decision under
paragraph (3).
(2) No adverse inference.--After the expiration of any stay
imposed under this section, no inference shall be drawn
regarding the validity or enforceability of a regulation
which was the subject of the petition.
(3) Vote.--
(A) In general.--The decision to issue a stay of, or set
aside, any regulation under this section shall be made only
with the affirmative vote in accordance with subparagraph (B)
of \2/3\ of the members of the Council then serving.
(B) Authorization to vote.--A member of the Council may
vote to stay the effectiveness of, or set aside, a final
regulation prescribed by the Bureau only if the agency or
department represented by that member has--
(i) considered any relevant information provided by the
agency submitting the petition and by the Bureau; and
(ii) made an official determination, at a public meeting
where applicable, that the regulation which is the subject of
the petition would put the safety and soundness of the United
States banking system or the stability of the financial
system of the United States at risk.
(4) Decisions to set aside.--
(A) Effect of decision.--A decision by the Council to set
aside a regulation prescribed by the Bureau, or provision
thereof, shall render such regulation, or provision thereof,
unenforceable.
(B) Timely action required.--The Council may not issue a
decision to set aside a regulation, or provision thereof,
which is the subject of a petition under this section after
the expiration of the later of--
(i) 45 days following the date of filing of the petition,
unless a stay is issued under paragraph (1); or
(ii) the expiration of a stay issued by the Council under
this section.
(C) Separate authority.--The issuance of a stay under this
section does not affect the authority of the Council to set
aside a regulation.
(5) Dismissal due to inaction.--A petition under this
section shall be deemed dismissed if the Council has not
issued a decision to set aside a regulation, or provision
thereof, within the period for timely action under paragraph
(4)(B).
(6) Publication of decision.--Any decision under this
subsection to issue a stay of, or set aside, a regulation or
provision thereof shall be published by the Council in the
Federal Register as soon as practicable after the decision is
made, with an explanation of the reasons for the decision.
(7) Rulemaking procedures inapplicable.--The notice and
comment procedures under section 553 of title 5, United
States Code, shall not apply to any decision under this
section of the Council to issue a stay of, or set aside, a
regulation.
(8) Judicial review of decisions by the council.--A
decision by the Council to set aside a regulation prescribed
by the Bureau, or provision thereof, shall be subject to
review under chapter 7 of title 5, United States Code.
(d) Application of Other Law.--Nothing in this section
shall be construed as altering, limiting, or restricting the
application of any other provision of law, except as
otherwise specifically provided in this section, including
chapter 5 and chapter 7 of title 5, United States Code, to a
regulation which is the subject of a petition filed under
this section.
(e) Savings Clause.--Nothing in this section shall be
construed as limiting or restricting the Bureau from engaging
in a rulemaking in accordance with applicable law.
(f) Implementing Rules.--The Council shall prescribe
procedural rules to implement this section.

SEC. 1024. SUPERVISION OF NONDEPOSITORY COVERED PERSONS.

(a) Scope of Coverage.--
(1) Applicability.--Notwithstanding any other provision of
this title, and except as provided in paragraph (3), this
section shall apply to any covered person who--
(A) offers or provides origination, brokerage, or servicing
of loans secured by real estate for use by consumers
primarily for personal, family, or household purposes, or
loan modification or foreclosure relief services in
connection with such loans; or
(B) is a larger participant of a market for other consumer
financial products or services, as defined by rule in
accordance with paragraph (2).
(2) Rulemaking to define covered persons subject to this
section.--The Bureau shall consult with the Federal Trade
Commission prior to issuing a rule to define covered persons
subject to this section, in accordance with paragraph (1)(B).
The Bureau shall issue its initial rule within 1 year of the
designated transfer date.
(3) Rules of construction.--
(A) Certain persons excluded.--This section shall not apply
to persons described in section 1025(a) or 1026(a).
(B) Activity levels.--For purposes of computing activity
levels under paragraph (1) or rules issued thereunder,
activities of affiliated companies (other than insured
depository institutions or insured credit unions) shall be
aggregated.
(b) Supervision.--
(1) In general.--The Bureau shall require reports and
conduct examinations on a periodic basis of persons described
in subsection (a) for purposes of--
(A) assessing compliance with the requirements of Federal
consumer financial law;
(B) obtaining information about the activities and
compliance systems or procedures of such person; and
(C) detecting and assessing risks to consumers and to
markets for consumer financial products and services.
(2) Risk-based supervision program.--The Bureau shall
exercise its authority under paragraph (1) in a manner
designed to ensure that such exercise, with respect to
persons described in subsection (a), is based on the
assessment by the Bureau of the risks posed to consumers in
the relevant product markets and geographic markets, and
taking into consideration, as applicable--
(A) the asset size of the covered person;
(B) the volume of transactions involving consumer financial
products or services in which the covered person engages;
(C) the risks to consumers created by the provision of such
consumer financial products or services;
(D) the extent to which such institutions are subject to
oversight by State authorities for consumer protection; and
(E) any other factors that the Bureau determines to be
relevant to a class of covered persons.
(3) Coordination.--To minimize regulatory burden, the
Bureau shall coordinate its supervisory activities with the
supervisory activities conducted by prudential regulators and
the State bank regulatory authorities, including establishing
their respective schedules for examining persons described in
subsection (a) and requirements regarding reports to be
submitted by such persons.
(4) Use of existing reports.--The Bureau shall, to the
fullest extent possible, use--
(A) reports pertaining to persons described in subsection
(a) that have been provided or required to have been provided
to a Federal or State agency; and
(B) information that has been reported publicly.
(5) Preservation of authority.--Nothing in this title may
be construed as limiting the authority of the Director to
require reports from persons described in subsection (a), as
permitted under paragraph (1), regarding information owned or
under the control of such person, regardless of whether such
information is maintained, stored, or processed by another
person.
(6) Reports of tax law noncompliance.--The Bureau shall
provide the Commissioner of Internal Revenue with any report
of examination or related information identifying possible
tax law noncompliance.
(7) Registration, recordkeeping, and other requirements for
certain persons.--
(A) In general.--The Bureau shall prescribe rules to
facilitate supervision of persons described in subsection (a)
and assessment and detection of risks to consumers.
(B) Registration.--
(i) In general.--The Bureau shall prescribe rules regarding
registration requirements for persons described in subsection
(a).
(ii) Exception for related persons.--The Bureau may not
impose requirements under this section regarding the
registration of a related person.
(iii) Registration information.--Subject to rules
prescribed by the Bureau, the Bureau shall publicly disclose
the registration information about persons described in
subsection (a) to facilitate the ability of consumers to
identify persons described in subsection (a) registered with
the Bureau.
(C) Recordkeeping.--The Bureau may require a person
described in subsection (a), to

[[Page S3235]]

generate, provide, or retain records for the purposes of
facilitating supervision of such persons and assessing and
detecting risks to consumers.
(D) Requirements concerning obligations.--The Bureau may
prescribe rules regarding a person described in subsection
(a), to ensure that such persons are legitimate entities and
are able to perform their obligations to consumers. Such
requirements may include background checks for principals,
officers, directors, or key personnel and bonding or other
appropriate financial requirements.
(E) Consultation with state agencies.--In developing and
implementing requirements under this paragraph, the Bureau
shall consult with State agencies regarding requirements or
systems (including coordinated or combined systems for
registration), where appropriate.
(c) Exclusive Enforcement Authority.--
(1) The bureau to have exclusive enforcement authority.--To
the extent that Federal law authorizes the Bureau and another
Federal agency to enforce Federal consumer financial law, the
Bureau shall have exclusive authority to enforce that Federal
consumer financial law with respect to any person described
in subsection (a)(1)(B).
(2) Referral.--Any Federal agency authorized to enforce a
Federal consumer financial law described in paragraph (1) may
recommend in writing to the Bureau that the Bureau initiate
an enforcement proceeding, as the Bureau is authorized by
that Federal law or by this title.
(3) Coordination with the federal trade commission.--
(A) In general.--The Bureau and the Federal Trade
Commission shall coordinate enforcement actions for
violations of Federal law regarding the offering or provision
of consumer financial products or services by any covered
person that is described in subsection (a)(1)(A), or service
providers thereto. In carrying out this subparagraph, the
agencies shall negotiate an agreement to establish procedures
for such coordination, including procedures for notice to the
other agency, where feasible, prior to initiating a civil
action to enforce a Federal law regarding the offering or
provision of consumer financial products or services.
(B) Civil actions.--Whenever a civil action has been filed
by, or on behalf of, the Bureau or the Federal Trade
Commission for any violation of any provision of Federal law
described in subparagraph (A), or any regulation prescribed
under such provision of law--
(i) the other agency may not, during the pendency of that
action, institute a civil action under such provision of law
against any defendant named in the complaint in such pending
action for any violation alleged in the complaint; and
(ii) the Bureau or the Federal Trade Commission may
intervene as a party in any such action brought by the other
agency, and, upon intervening--

(I) be heard on all matters arising in such enforcement
action; and
(II) file petitions for appeal in such actions.

(C) Agreement terms.--The terms of any agreement negotiated
under subparagraph (A) may modify or supersede the provisions
of subparagraph (B).
(D) Deadline.--The agencies shall reach the agreement
required under subparagraph (A) not later than 6 months after
the designated transfer date.
(d) Exclusive Rulemaking and Examination Authority.--
Notwithstanding any other provision of Federal law, to the
extent that Federal law authorizes the Bureau and another
Federal agency to issue regulations or guidance, conduct
examinations, or require reports from a person described in
subsection (a) under such law for purposes of assuring
compliance with Federal consumer financial law and any
regulations thereunder, the Bureau shall have the exclusive
authority to prescribe rules, issue guidance, conduct
examinations, require reports, or issue exemptions with
regard to a person described in subsection (a), subject to
those provisions of law.
(e) Service Providers.--A service provider to a person
described in subsection (a) shall be subject to the authority
of the Bureau under this section, to the same extent as if
such service provider were engaged in a service relationship
with a bank, and the Bureau were an appropriate Federal
banking agency under section 7(c) of the Bank Service Company
Act (12 U.S.C. 1867(c)). In conducting any examination or
requiring any report from a service provider subject to this
subsection, the Bureau shall coordinate with the appropriate
prudential regulator, as applicable.
(f) Preservation of Farm Credit Administration Authority.--
No provision of this title may be construed as modifying,
limiting, or otherwise affecting the authority of the Farm
Credit Administration.

SEC. 1025. SUPERVISION OF VERY LARGE BANKS, SAVINGS
ASSOCIATIONS, AND CREDIT UNIONS.

(a) Scope of Coverage.--
(1) Applicability.--This section shall apply to any covered
person that is--
(A) an insured depository institution with total assets of
more than $10,000,000,000 and any affiliate thereof; or
(B) an insured credit union with total assets of more than
$10,000,000,000 and any affiliate thereof.
(2) Rule of construction.--For purposes of determining
total assets under this section and section 1026, the Bureau
shall rely on the same regulations and interim methodologies
specified in section 312(e).
(b) Supervision.--
(1) In general.--The Bureau shall require reports and
conduct examinations on a periodic basis of persons described
in subsection (a) for purposes of--
(A) assessing compliance with the requirements of Federal
consumer financial laws;
(B) obtaining information about the activities and
compliance systems or procedures of such persons; and
(C) detecting and assessing risks to consumers and to
markets for consumer financial products and services.
(2) Coordination.--To minimize regulatory burden, the
Bureau shall coordinate its supervisory activities with the
supervisory activities conducted by prudential regulators and
the State bank regulatory authorities, including establishing
their respective schedules for examining such persons
described in subsection (a) and requirements regarding
reports to be submitted by such persons.
(3) Use of existing reports.--The Bureau shall, to the
fullest extent possible, use--
(A) reports pertaining to a person described in subsection
(a) that have been provided or required to have been provided
to a Federal or State agency; and
(B) information that has been reported publicly.
(4) Preservation of authority.--Nothing in this title may
be construed as limiting the authority of the Director to
require reports from a person described in subsection (a), as
permitted under paragraph (1), regarding information owned or
under the control of such person, regardless of whether such
information is maintained, stored, or processed by another
person.
(5) Reports of tax law noncompliance.--The Bureau shall
provide the Commissioner of Internal Revenue with any report
of examination or related information identifying possible
tax law noncompliance.
(c) Primary Enforcement Authority.--
(1) The bureau to have primary enforcement authority.--To
the extent that the Bureau and another Federal agency are
authorized to enforce a Federal consumer financial law, the
Bureau shall have primary authority to enforce that Federal
consumer financial law with respect to any person described
in subsection (a).
(2) Referral.--Any Federal agency, other than the Federal
Trade Commission, that is authorized to enforce a Federal
consumer financial law may recommend, in writing, to the
Bureau that the Bureau initiate an enforcement proceeding
with respect to a person described in subsection (a), as the
Bureau is authorized to do by that Federal consumer financial
law.
(3) Backup enforcement authority of other federal agency.--
If the Bureau does not, before the end of the 120-day period
beginning on the date on which the Bureau receives a
recommendation under paragraph (2), initiate an enforcement
proceeding, the other agency referred to in paragraph (2) may
initiate an enforcement proceeding, as permitted by the
subject provision of Federal law.
(d) Service Providers.--A service provider to a person
described in subsection (a) shall be subject to the authority
of the Bureau under this section, to the same extent as if
the Bureau were an appropriate Federal banking agency under
section 7(c) of the Bank Service Company Act 12 U.S.C.
1867(c). In conducting any examination or requiring any
report from a service provider subject to this subsection,
the Bureau shall coordinate with the appropriate prudential
regulator.
(e) Simultaneous and Coordinated Supervisory Action.--
(1) Examinations.--A prudential regulator and the Bureau
shall, with respect to each insured depository institution,
insured credit union, or other covered person described in
subsection (a) that is supervised by the prudential regulator
and the Bureau, respectively--
(A) coordinate the scheduling of examinations of the
insured depository institution, insured credit union, or
other covered person described in subsection (a);
(B) conduct simultaneous examinations of each insured
depository institution, insured credit union, or other
covered person described in subsection (a), unless such
institution requests examinations to be conducted separately;
(C) share each draft report of examination with the other
agency and permit the receiving agency a reasonable
opportunity (which shall not be less than a period of 30 days
after the date of receipt) to comment on the draft report
before such report is made final; and
(D) prior to issuing a final report of examination or
taking supervisory action, take into consideration concerns,
if any, raised in the comments made by the other agency.
(2) Coordination with state bank supervisors.--The Bureau
shall pursue arrangements and agreements with State bank
supervisors to coordinate examinations, consistent with
paragraph (1).
(3) Avoidance of conflict in supervision.--
(A) Request.--If the proposed supervisory determinations of
the Bureau and a prudential regulator (in this section
referred to collectively as the ``agencies'') are
conflicting, an insured depository institution, insured
credit union, or other covered person described in subsection
(a) may request the agencies to coordinate and present a
joint statement of coordinated supervisory action.

[[Page S3236]]

(B) Joint statement.--The agencies shall provide a joint
statement under subparagraph (A), not later than 30 days
after the date of receipt of the request of the insured
depository institution, credit union, or covered person
described in subsection (a).
(4) Appeals to governing panel.--
(A) In general.--If the agencies do not resolve the
conflict or issue a joint statement required by subparagraph
(B), or if either of the agencies takes or attempts to take
any supervisory action relating to the request for the joint
statement without the consent of the other agency, an insured
depository institution, insured credit union, or other
covered person described in subsection (a) may institute an
appeal to a governing panel, as provided in this subsection,
not later than 30 days after the expiration of the period
during which a joint statement is required to be filed under
paragraph (3)(B).
(B) Composition of governing panel.--The governing panel
for an appeal under this paragraph shall be composed of--
(i) a representative from the Bureau and a representative
of the prudential regulator, both of whom--

(I) have not participated in the material supervisory
determinations under appeal; and
(II) do not directly or indirectly report to the person who
participated materially in the supervisory determinations
under appeal; and

(ii) one individual representative, to be determined on a
rotating basis, from among the Board of Governors, the
Corporation, the National Credit Union Administration, and
the Office of the Comptroller of the Currency, other than any
agency involved in the subject dispute.
(C) Conduct of appeal.--In an appeal under this paragraph--
(i) the insured depository institution, insured credit
union, or other covered person described in subsection (a)--

(I) shall include in its appeal all the facts and legal
arguments pertaining to the matter; and
(II) may, through counsel, employees, or representatives,
appear before the governing panel in person or by telephone;
and

(ii) the governing panel--

(I) may request the insured depository institution, insured
credit union, or other covered person described in subsection
(a), the Bureau, or the prudential regulator to produce
additional information relevant to the appeal; and
(II) by a majority vote of its members, shall provide a
final determination, in writing, not later than 30 days after
the date of filing of an informationally complete appeal, or
such longer period as the panel and the insured depository
institution, insured credit union, or other covered person
described in subsection (a) may jointly agree.

(D) Public availability of determinations.--A governing
panel shall publish all information contained in a
determination by the governing panel, with appropriate
redactions of information that would be subject to an
exemption from disclosure under section 552 of title 5,
United States Code.
(E) Prohibition against retaliation.--The Bureau and the
prudential regulators shall prescribe rules to provide
safeguards from retaliation against the insured depository
institution, insured credit union, or other covered person
described in subsection (a) instituting an appeal under this
paragraph, as well as their officers and employees.
(F) Limitation.--The process provided in this paragraph
shall not apply to a determination by a prudential regulator
to appoint a conservator or receiver for an insured
depository institution or a liquidating agent for an insured
credit union, as the case may be, or a decision to take
action pursuant to section 38 of the Federal Deposit
Insurance Act (12 U.S.C. 1831o) or section 212 of the Federal
Credit Union Act (112 U.S.C. 1790a), as applicable.
(G) Effect on other authority.--Nothing in this section
shall modify or limit the authority of the Bureau to
interpret, or take enforcement action under, any Federal
consumer financial law.

SEC. 1026. OTHER BANKS, SAVINGS ASSOCIATIONS, AND CREDIT
UNIONS.

(a) Scope of Coverage.--This section shall apply to any
covered person that is--
(1) an insured depository institution with total assets of
$10,000,000,000 or less; or
(2) an insured credit union with total assets of
$10,000,000,000 or less.
(b) Reports.--The Director may require reports from a
person described in subsection (a), as necessary to support
the role of the Bureau in implementing Federal consumer
financial law, to support its examination activities under
subsection (c), and to assess and detect risks to consumers
and consumer financial markets.
(1) Use of existing reports.--The Bureau shall, to the
fullest extent possible, use--
(A) reports pertaining to a person described in subsection
(a) that have been provided or required to have been provided
to a Federal or State agency; and
(B) information that has been reported publicly.
(2) Preservation of authority.--Nothing in this subsection
may be construed as limiting the authority of the Director
from requiring from a person described in subsection (a), as
permitted under paragraph (1), information owned or under the
control of such person, regardless of whether such
information is maintained, stored, or processed by another
person.
(3) Reports of tax law noncompliance.--The Bureau shall
provide the Commissioner of Internal Revenue with any report
of examination or related information identifying possible
tax law noncompliance.
(c) Examinations.--
(1) In general.--The Bureau may, at its discretion, include
examiners on a sampling basis of the examinations performed
by the prudential regulator of persons described in
subsection (a).
(2) Agency coordination.--The prudential regulator shall--
(A) provide all reports, records, and documentation related
to the examination process for any institution included in
the sample referred to in paragraph (1) to the Bureau on a
timely and continual basis;
(B) involve such Bureau examiner in the entire examination
process for such person; and
(C) consider input of the Bureau concerning the scope of an
examination, conduct of the examination, the contents of the
examination report, the designation of matters requiring
attention, and examination ratings.
(d) Enforcement.--
(1) In general.--Except for requiring reports under
subsection (b), the prudential regulator shall have exclusive
authority to enforce compliance with respect to a person
described in subsection (a).
(2) Coordination with prudential regulator.--
(A) Referral.--When the Bureau has reason to believe that a
person described in subsection (a) has engaged in a material
violation of a Federal consumer financial law, the Bureau
shall notify the prudential regulator in writing and
recommend appropriate action to respond.
(B) Response.--Upon receiving a recommendation under
subparagraph (A), the prudential regulator shall provide a
written response to the Bureau not later than 60 days
thereafter.
(e) Service Providers.--A service provider to a substantial
number of persons described in subsection (a) shall be
subject to the authority of the Bureau under section 1025 to
the same extent as if the Bureau were an appropriate Federal
bank agency under section 7(c) of the Bank Service Company
Act (12 U.S.C. 1867(c)). When conducting any examination or
requiring any report from a service provider subject to this
subsection, the Bureau shall coordinate with the appropriate
prudential regulator.

SEC. 1027. LIMITATIONS ON AUTHORITIES OF THE BUREAU;
PRESERVATION OF AUTHORITIES.

(a) Exclusion for Merchants, Retailers, and Other Sellers
of Nonfinancial Goods or Services.--
(1) Sale or brokerage of nonfinancial good or service.--The
Bureau may not exercise any rulemaking, supervisory,
enforcement or other authority under this title with respect
to a person who is a merchant, retailer, or seller of any
nonfinancial good or service and is engaged in the sale or
brokerage of such nonfinancial good or service, except to the
extent that such person is engaged in offering or providing
any consumer financial product or service, or is otherwise
subject to any enumerated consumer law or any law for which
authorities are transferred under subtitle F or H.
(2) Offering or provision of certain consumer financial
products or services in connection with the sale or brokerage
of nonfinancial good or service.--
(A) In general.--Except as provided in subparagraph (B),
and subject to subparagraph (C), the Bureau may not exercise
any rulemaking, supervisory, enforcement, or other authority
under this title with respect to a merchant, retailer, or
seller of nonfinancial goods or services who--
(i) extends credit directly to a consumer, in a case in
which the good or service being provided is not itself a
consumer financial product or service (other than credit
described in this subparagraph), exclusively for the purpose
of enabling that consumer to purchase such nonfinancial good
or service directly from the merchant, retailer, or seller;
(ii) directly, or through an agreement with another person,
collects debt arising from credit extended as described in
clause (i); or
(iii) sells or conveys debt described in clause (i) that is
delinquent or otherwise in default.
(B) Applicability.--Subparagraph (A) does not apply to any
credit transaction or collection of debt, other than as
described in subparagraph (C), arising from a transaction
described in subparagraph (A)--
(i) in which the merchant, retailer, or seller of
nonfinancial goods or services assigns, sells or otherwise
conveys to another person such debt owed by the consumer
(except for a sale of debt that is delinquent or otherwise in
default, as described in subparagraph (A)(iii));
(ii) in which the credit extended exceeds the market value
of the nonfinancial good or service provided, or the Bureau
otherwise finds that the sale of the nonfinancial good or
service is done as a subterfuge, so as to evade or circumvent
the provisions of this title; or
(iii) in which the merchant, retailer, or seller of
nonfinancial goods or services regularly extends credit and
the credit is--

(I) subject to a finance charge; or
(II) payable by written agreement in more than 4
installments.

(C) Limitation.--Notwithstanding subparagraph (B), the
Bureau may not exercise any rulemaking, supervisory,
enforcement, or

[[Page S3237]]

other authority under this title with respect to a merchant,
retailer, or seller of nonfinancial goods or services that is
not engaged significantly in offering or providing consumer
financial products or services.
(D) Rule of construction.--No provision of this title may
be construed as modifying, limiting, or superseding the
supervisory or enforcement authority of the Federal Trade
Commission or any other agency (other than the Bureau) with
respect to credit extended, or the collection of debt arising
from such extension, directly by a merchant or retailer to a
consumer exclusively for the purpose of enabling that
consumer to purchase nonfinancial goods or services directly
from the merchant or retailer.
(b) Exclusion for Real Estate Brokerage Activities.--
(1) Real estate brokerage activities excluded.--Without
limiting subsection (a), and except as permitted in paragraph
(2), the Bureau may not exercise any rulemaking, supervisory,
enforcement, or other authority under this title with respect
to a person that is licensed or registered as a real estate
broker or real estate agent, in accordance with State law, to
the extent that such person--
(A) acts as a real estate agent or broker for a buyer,
seller, lessor, or lessee of real property;
(B) brings together parties interested in the sale,
purchase, lease, rental, or exchange of real property;
(C) negotiates, on behalf of any party, any portion of a
contract relating to the sale, purchase, lease, rental, or
exchange of real property (other than in connection with the
provision of financing with respect to any such transaction);
or
(D) offers to engage in any activity, or act in any
capacity, described in subparagraph (A), (B), or (C).
(2) Description of activities.--Paragraph (1) shall not
apply to any person to the extent that such person is engaged
in the offering or provision of any consumer financial
product or service or is otherwise subject to any enumerated
consumer law or any law for which authorities are transferred
under subtitle F or H.
(c) Exclusion for Manufactured Home Retailers and Modular
Home Retailers.--
(1) In general.--The Director may not exercise any
rulemaking, supervisory, enforcement, or other authority over
a person to the extent that--
(A) such person is not described in paragraph (2); and
(B) such person--
(i) acts as an agent or broker for a buyer or seller of a
manufactured home or a modular home;
(ii) facilitates the purchase by a consumer of a
manufactured home or modular home, by negotiating the
purchase price or terms of the sales contract (other than
providing financing with respect to such transaction); or
(iii) offers to engage in any activity described in clause
(i) or (ii).
(2) Description of activities.--A person is described in
this paragraph to the extent that such person is engaged in
the offering or provision of any consumer financial product
or service or is otherwise subject to any enumerated consumer
law or any law for which authorities are transferred under
subtitle F or H.
(3) Definitions.--For purposes of this subsection, the
following definitions shall apply:
(A) Manufactured home.--The term ``manufactured home'' has
the same meaning as in section 603 of the National
Manufactured Housing Construction and Safety Standards Act of
1974 (42 U.S.C. 5402).
(B) Modular home.--The term ``modular home'' means a house
built in a factory in 2 or more modules that meet the State
or local building codes where the house will be located, and
where such modules are transported to the building site,
installed on foundations, and completed.
(d) Exclusion for Accountants and Tax Preparers.--
(1) In general.--Except as permitted in paragraph (2), the
Bureau may not exercise any rulemaking, supervisory,
enforcement, or other authority over--
(A) any person that is a certified public accountant,
permitted to practice as a certified public accounting firm,
or certified or licensed for such purpose by a State, or any
individual who is employed by or holds an ownership interest
with respect to a person described in this subparagraph, when
such person is performing or offering to perform--
(i) customary and usual accounting activities, including
the provision of accounting, tax, advisory, or other services
that are subject to the regulatory authority of a State board
of accountancy or a Federal authority; or
(ii) other services that are incidental to such customary
and usual accounting activities, to the extent that such
incidental services are not offered or provided--

(I) by the person separate and apart from such customary
and usual accounting activities; or
(II) to consumers who are not receiving such customary and
usual accounting activities; or

(B) any person, other than a person described in
subparagraph (A) that performs income tax preparation
activities for consumers.
(2) Description of activities.--
(A) In general.--Paragraph (1) shall not apply to any
person described in paragraph (1)(A) or (1)(B) to the extent
that such person is engaged in any activity which is not a
customary and usual accounting activity described in
paragraph (1)(A) or incidental thereto but which is the
offering or provision of any consumer financial product or
service, except to the extent that a person described in
paragraph (1)(A) is engaged in an activity which is a
customary and usual accounting activity described in
paragraph (1)(A), or incidental thereto.
(B) Not a customary and usual accounting activity.--For
purposes of this subsection, extending or brokering credit is
not a customary and usual accounting activity, or incidental
thereto.
(C) Rule of construction.--For purposes of subparagraphs
(A) and (B), a person described in paragraph (1)(A) shall not
be deemed to be extending credit, if such person is only
extending credit directly to a consumer, exclusively for the
purpose of enabling such consumer to purchase services
described in clause (i) or (ii) of paragraph (1)(A) directly
from such person, and such credit is--
(i) not subject to a finance charge; and
(ii) not payable by written agreement in more than 4
installments.
(D) Other limitations.--Paragraph (1) does not apply to any
person described in paragraph (1)(A) or (1)(B) that is
otherwise subject to any enumerated consumer law or any law
for which authorities are transferred under subtitle F or H.
(e) Exclusion for Attorneys.--
(1) In general.--The Bureau may not exercise any authority
to conduct examinations of an attorney licensed by a State,
to the extent that the attorney is engaged in the practice of
law under the laws of such State.
(2) Exception for enumerated consumer laws and transferred
authorities.--Paragraph (1) shall not apply to an attorney
who is engaged in the offering or provision of any consumer
financial product or service, or is otherwise subject to any
enumerated consumer law or any law for which authorities are
transferred under subtitle F or H.
(f) Exclusion for Persons Regulated by a State Insurance
Regulator.--
(1) In general.--No provision of this title shall be
construed as altering, amending, or affecting the authority
of any State insurance regulator to adopt rules, initiate
enforcement proceedings, or take any other action with
respect to a person regulated by a State insurance regulator.
Except as provided in paragraph (2), the Bureau shall have no
authority to exercise any power to enforce this title with
respect to a person regulated by a State insurance regulator.
(2) Description of activities.--Paragraph (1) does not
apply to any person described in such paragraph to the extent
that such person is engaged in the offering or provision of
any consumer financial product or service or is otherwise
subject to any enumerated consumer law or any law for which
authorities are transferred under subtitle F or H.
(g) Exclusion for Employee Benefit and Compensation Plans
and Certain Other Arrangements Under the Internal Revenue
Code of 1986.--
(1) Preservation of authority of other agencies.--No
provision of this title shall be construed as altering,
amending, or affecting the authority of the Secretary of the
Treasury, the Secretary of Labor, or the Commissioner of
Internal Revenue to adopt regulations, initiate enforcement
proceedings, or take any actions with respect to any
specified plan or arrangement.
(2) Activities not constituting the offering or provision
of any consumer financial product or service.--For purposes
of this title, a person shall not be treated as having
engaged in the offering or provision of any consumer
financial product or service solely because such person is a
specified plan or arrangement, or is engaged in the activity
of establishing or maintaining, for the benefit of employees
of such person (or for members of an employee organization),
any specified plan or arrangement.
(3) Limitation on bureau authority.--
(A) In general.--Except as provided under subparagraphs (B)
and (C), the Bureau may not exercise any rulemaking or
enforcement authority with respect to products or services
that relate to any specified plan or arrangement.
(B) Bureau action only pursuant to agency request.--The
Secretary and the Secretary of Labor may jointly issue a
written request to the Bureau regarding implementation of
appropriate consumer protection standards under this title
with respect to the provision of services relating to any
specified plan or arrangement. Subject to a request made
under this subparagraph, the Bureau may exercise rulemaking
authority, and may act to enforce a rule prescribed pursuant
to such request, in accordance with the provisions of this
title. A request made by the Secretary and the Secretary of
Labor under this subparagraph shall describe the basis for,
and scope of, appropriate consumer protection standards to be
implemented under this title with respect to the provision of
services relating to any specified plan or arrangement.
(C) Description of products or services.--To the extent
that a person engaged in providing products or services
relating to any specified plan or arrangement is subject to
any enumerated consumer law or any law for which authorities
are transferred under subtitle F or H, subparagraph (A) shall
not apply with respect to that law.
(4) Specified plan or arrangement.--For purposes of this
subsection, the term ``specified plan or arrangement'' means
any plan, account, or arrangement described in section

[[Page S3238]]

220, 223, 401(a), 403(a), 403(b), 408, 408A, 529, or 530 of
the Internal Revenue Code of 1986, or any employee benefit or
compensation plan or arrangement, including a plan that is
subject to title I of the Employee Retirement Income Security
Act of 1974.
(h) Persons Regulated by a State Securities Commission.--
(1) In general.--No provision of this title shall be
construed as altering, amending, or affecting the authority
of any securities commission (or any agency or office
performing like functions) of any State to adopt rules,
initiate enforcement proceedings, or take any other action
with respect to a person regulated by any securities
commission (or any agency or office performing like
functions) of any State. Except as permitted in paragraph (2)
and subsection (f), the Bureau shall have no authority to
exercise any power to enforce this title with respect to a
person regulated by any securities commission (or any agency
or office performing like functions) of any State, but only
to the extent that the person acts in such regulated
capacity.
(2) Description of activities.--Paragraph (1) shall not
apply to any person to the extent such person is engaged in
the offering or provision of any consumer financial product
or service, or is otherwise subject to any enumerated
consumer law or any law for which authorities are transferred
under subtitle F or H.
(i) Exclusion for Persons Regulated by the Commission.--
(1) In general.--No provision of this title may be
construed as altering, amending, or affecting the authority
of the Commission to adopt rules, initiate enforcement
proceedings, or take any other action with respect to a
person regulated by the Commission. The Bureau shall have no
authority to exercise any power to enforce this title with
respect to a person regulated by the Commission.
(2) Consultation and coordination.--Notwithstanding
paragraph (1), the Commission shall consult and coordinate,
where feasible, with the Bureau with respect to any rule
(including any advance notice of proposed rulemaking)
regarding an investment product or service that is the same
type of product as, or that competes directly with, a
consumer financial product or service that is subject to the
jurisdiction of the Bureau under this title or under any
other law. In carrying out this paragraph, the agencies shall
negotiate an agreement to establish procedures for such
coordination, including procedures for providing advance
notice to the Bureau when the Commission is initiating a
rulemaking.
(j) Exclusion for Persons Regulated by the Commodity
Futures Trading Commission.--
(1) In general.--No provision of this title shall be
construed as altering, amending, or affecting the authority
of the Commodity Futures Trading Commission to adopt rules,
initiate enforcement proceedings, or take any other action
with respect to a person regulated by the Commodity Futures
Trading Commission. The Bureau shall have no authority to
exercise any power to enforce this title with respect to a
person regulated by the Commodity Futures Trading Commission.
(2) Consultation and coordination.--Notwithstanding
paragraph (1), the Commodity Futures Trading Commission shall
consult and coordinate with the Bureau with respect to any
rule (including any advance notice of proposed rulemaking)
regarding a product or service that is the same type of
product as, or that competes directly with, a consumer
financial product or service that is subject to the
jurisdiction of the Bureau under this title or under any
other law.
(k) Exclusion for Persons Regulated by the Farm Credit
Administration.--
(1) In general.--No provision of this title shall be
construed as altering, amending, or affecting the authority
of the Farm Credit Administration to adopt rules, initiate
enforcement proceedings, or take any other action with
respect to a person regulated by the Farm Credit
Administration. The Bureau shall have no authority to
exercise any power to enforce this title with respect to a
person regulated by the Farm Credit Administration.
(2) Definition.--For purposes of this subsection, the term
``person regulated by the Farm Credit Administration'' means
any Farm Credit System institution that is chartered and
subject to the provisions of the Farm Credit Act of 1971 (12
U.S.C. 2001 et seq.).
(l) Exclusion for Activities Relating to Charitable
Contributions.--
(1) In general.--The Director and the Bureau may not
exercise any rulemaking, supervisory, enforcement, or other
authority, including authority to order penalties, over any
activities related to the solicitation or making of voluntary
contributions to a tax-exempt organization as recognized by
the Internal Revenue Service, by any agent, volunteer, or
representative of such organizations to the extent the
organization, agent, volunteer, or representative thereof is
soliciting or providing advice, information, education, or
instruction to any donor or potential donor relating to a
contribution to the organization.
(2) Limitation.--The exclusion in paragraph (1) does not
apply to other activities not described in paragraph (1) that
are the offering or provision of any consumer financial
product or service, or are otherwise subject to any
enumerated consumer law or any law for which authorities are
transferred under subtitle F or H.
(m) Insurance.--The Bureau may not define as a financial
product or service, by regulation or otherwise, engaging in
the business of insurance.
(n) Limited Authority of the Bureau.--Notwithstanding
subsections (a) through (h) and (l), a person subject to or
described in one or more of such subsections--
(1) may be a service provider; and
(2) may be subject to requests from, or requirements
imposed by, the Bureau regarding information in order to
carry out the responsibilities and functions of the Bureau
and in accordance with section 1022, 1052, or 1053.
(o) No Authority To Impose Usury Limit.--No provision of
this title shall be construed as conferring authority on the
Bureau to establish a usury limit applicable to an extension
of credit offered or made by a covered person to a consumer,
unless explicitly authorized by law.
(p) Attorney General.--No provision of this title,
including section 1024(c)(1), shall affect the authorities of
the Attorney General under otherwise applicable provisions of
law.
(q) Secretary of the Treasury.--No provision of this title
shall affect the authorities of the Secretary, including with
respect to prescribing rules, initiating enforcement
proceedings, or taking other actions with respect to a person
that performs income tax preparation activities for
consumers.
(r) Deposit Insurance and Share Insurance.--Nothing in this
title shall affect the authority of the Corporation under the
Federal Deposit Insurance Act or the National Credit Union
Administration Board under the Federal Credit Union Act as to
matters related to deposit insurance and share insurance,
respectively.

SEC. 1028. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE
ARBITRATION.

(a) Study and Report.--The Bureau shall conduct a study of,
and shall provide a report to Congress concerning, the use of
agreements providing for arbitration of any future dispute
between covered persons and consumers in connection with the
offering or providing of consumer financial products or
services.
(b) Further Authority.--The Bureau, by regulation, may
prohibit or impose conditions or limitations on the use of an
agreement between a covered person and a consumer for a
consumer financial product or service providing for
arbitration of any future dispute between the parties, if the
Bureau finds that such a prohibition or imposition of
conditions or limitations is in the public interest and for
the protection of consumers. The findings in such rule shall
be consistent with the study conducted under subsection (a).
(c) Limitation.--The authority described in subsection (b)
may not be construed to prohibit or restrict a consumer from
entering into a voluntary arbitration agreement with a
covered person after a dispute has arisen.
(d) Effective Date.--Notwithstanding any other provision of
law, any regulation prescribed by the Bureau under subsection
(a) shall apply, consistent with the terms of the regulation,
to any agreement between a consumer and a covered person
entered into after the end of the 180-day period beginning on
the effective date of the regulation, as established by the
Bureau.

SEC. 1029. EFFECTIVE DATE.

This subtitle shall become effective on the designated
transfer date.

Subtitle C--Specific Bureau Authorities

SEC. 1031. PROHIBITING UNFAIR, DECEPTIVE, OR ABUSIVE ACTS OR
PRACTICES.

(a) In General.--The Bureau may take any action authorized
under subtitle E to prevent a covered person or service
provider from committing or engaging in an unfair, deceptive,
or abusive act or practice under Federal law in connection
with any transaction with a consumer for a consumer financial
product or service, or the offering of a consumer financial
product or service.
(b) Rulemaking.--The Bureau may prescribe rules applicable
to a covered person or service provider identifying as
unlawful unfair, deceptive, or abusive acts or practices in
connection with any transaction with a consumer for a
consumer financial product or service, or the offering of a
consumer financial product or service. Rules under this
section may include requirements for the purpose of
preventing such acts or practices.
(c) Unfairness.--
(1) In general.--The Bureau shall have no authority under
this section to declare an act or practice in connection with
a transaction with a consumer for a consumer financial
product or service, or the offering of a consumer financial
product or service, to be unlawful on the grounds that such
act or practice is unfair, unless the Bureau has a reasonable
basis to conclude that--
(A) the act or practice causes or is likely to cause
substantial injury to consumers which is not reasonably
avoidable by consumers; and
(B) such substantial injury is not outweighed by
countervailing benefits to consumers or to competition.
(2) Consideration of public policies.--In determining
whether an act or practice is unfair, the Bureau may consider
established public policies as evidence to be considered with
all other evidence. Such public policy considerations may not
serve as a primary basis for such determination.
(d) Abusive.--The Bureau shall have no authority under this
section to declare an act

[[Page S3239]]

or practice abusive in connection with the provision of a
consumer financial product or service, unless the act or
practice--
(1) materially interferes with the ability of a consumer to
understand a term or condition of a consumer financial
product or service; or
(2) takes unreasonable advantage of--
(A) a lack of understanding on the part of the consumer of
the material risks, costs, or conditions of the product or
service;
(B) the inability of the consumer to protect the interests
of the consumer in selecting or using a consumer financial
product or service; or
(C) the reasonable reliance by the consumer on a covered
person to act in the interests of the consumer.
(e) Consultation.--In prescribing rules under this section,
the Bureau shall consult with the Federal banking agencies,
or other Federal agencies, as appropriate, concerning the
consistency of the proposed rule with prudential, market, or
systemic objectives administered by such agencies.

SEC. 1032. DISCLOSURES.

(a) In General.--The Bureau may prescribe rules to ensure
that the features of any consumer financial product or
service, both initially and over the term of the product or
service, are fully, accurately, and effectively disclosed to
consumers in a manner that permits consumers to understand
the costs, benefits, and risks associated with the product or
service, in light of the facts and circumstances.
(b) Model Disclosures.--
(1) In general.--Any final rule prescribed by the Bureau
under this section requiring disclosures may include a model
form that may be used at the option of the covered person for
provision of the required disclosures.
(2) Format.--A model form issued pursuant to paragraph (1)
shall contain a clear and conspicuous disclosure that, at a
minimum--
(A) uses plain language comprehensible to consumers;
(B) contains a clear format and design, such as an easily
readable type font; and
(C) succinctly explains the information that must be
communicated to the consumer.
(3) Consumer testing.--Any model form issued pursuant to
this subsection shall be validated through consumer testing.
(c) Basis for Rulemaking.--In prescribing rules under this
section, the Bureau shall consider available evidence about
consumer awareness, understanding of, and responses to
disclosures or communications about the risks, costs, and
benefits of consumer financial products or services.
(d) Safe Harbor.--Any covered person that uses a model form
included with a rule issued under this section shall be
deemed to be in compliance with the disclosure requirements
of this section with respect to such model form.
(e) Trial Disclosure Programs.--
(1) In general.--The Bureau may permit a covered person to
conduct a trial program that is limited in time and scope,
subject to specified standards and procedures, for the
purpose of providing trial disclosures to consumers that are
designed to improve upon any model form issued pursuant to
subsection (b)(1), or any other model form issued to
implement an enumerated statute, as applicable.
(2) Safe harbor.--The standards and procedures issued by
the Bureau shall be designed to encourage covered persons to
conduct trial disclosure programs. For the purposes of
administering this subsection, the Bureau may establish a
limited period during which a covered person conducting a
trial disclosure program shall be deemed to be in compliance
with, or may be exempted from, a requirement of a rule or an
enumerated consumer law.
(3) Public disclosure.--The rules of the Bureau shall
provide for public disclosure of trial disclosure programs,
which public disclosure may be limited, to the extent
necessary to encourage covered persons to conduct effective
trials.
(f) Combined Mortgage Loan Disclosure.--Not later than 1
year after the designated transfer date, the Bureau shall
propose for public comment rules and model disclosures that
combine the disclosures required under the Truth in Lending
Act and the Real Estate Settlement Procedures Act of 1974,
into a single, integrated disclosure for mortgage loan
transactions covered by those laws, unless the Bureau
determines that any proposal issued by the Board of Governors
and the Secretary of Housing and Urban Development carries
out the same purpose.

SEC. 1033. CONSUMER RIGHTS TO ACCESS INFORMATION.

(a) In General.--Subject to rules prescribed by the Bureau,
a covered person shall make available to a consumer, upon
request, information in the control or possession of the
covered person concerning the consumer financial product or
service that the consumer obtained from such covered person,
including information relating to any transaction, series of
transactions, or to the account including costs, charges and
usage data. The information shall be made available in an
electronic form usable by consumers.
(b) Exceptions.--A covered person may not be required by
this section to make available to the consumer--
(1) any confidential commercial information, including an
algorithm used to derive credit scores or other risk scores
or predictors;
(2) any information collected by the covered person for the
purpose of preventing fraud or money laundering, or
detecting, or making any report regarding other unlawful or
potentially unlawful conduct;
(3) any information required to be kept confidential by any
other provision of law; or
(4) any information that the covered person cannot retrieve
in the ordinary course of its business with respect to that
information.
(c) No Duty To Maintain Records.--Nothing in this section
shall be construed to impose any duty on a covered person to
maintain or keep any information about a consumer.
(d) Standardized Formats for Data.--The Bureau, by rule,
shall prescribe standards applicable to covered persons to
promote the development and use of standardized formats for
information, including through the use of machine readable
files, to be made available to consumers under this section.
(e) Consultation.--The Bureau shall, when prescribing any
rule under this section, consult with the Federal banking
agencies and the Federal Trade Commission to ensure that the
rules--
(1) impose substantively similar requirements on covered
persons;
(2) take into account conditions under which covered
persons do business both in the United States and in other
countries; and
(3) do not require or promote the use of any particular
technology in order to develop systems for compliance.

SEC. 1034. RESPONSE TO CONSUMER COMPLAINTS AND INQUIRIES.

(a) Timely Regulator Response to Consumers.--The Bureau
shall establish, in consultation with the appropriate Federal
regulatory agencies, reasonable procedures to provide a
timely response to consumers, in writing where appropriate,
to complaints against, or inquiries concerning, a covered
person, including--
(1) all steps that have been taken by the regulator in
response to the complaint or inquiry of the consumer;
(2) any responses received by the regulator from the
covered person; and
(3) any follow-up actions or planned follow-up actions by
the regulator in response to the complaint or inquiry of the
consumer.
(b) Timely Response to Regulator by Covered Person.--A
covered person subject to supervision and primary enforcement
by the Bureau pursuant to section 1025 shall provide a timely
response, in writing where appropriate, to the Bureau, the
prudential regulators, and any other agency having
jurisdiction over such covered person concerning a consumer
complaint or inquiry, including--
(1) steps that have been taken by the covered person to
respond to the complaint or inquiry of the consumer;
(2) responses received by the covered person from the
consumer; and
(3) follow-up actions or planned follow-up actions by the
covered person to respond to the complaint or inquiry of the
consumer.
(c) Provision of Information to Consumers.--
(1) In general.--A covered person subject to supervision
and primary enforcement by the Bureau pursuant to section
1025 shall, in a timely manner, comply with a consumer
request for information in the control or possession of such
covered person concerning the consumer financial product or
service that the consumer obtained from such covered person,
including supporting written documentation, concerning the
account of the consumer.
(2) Exceptions.--A covered person subject to supervision
and primary enforcement by the Bureau pursuant to section
1025, a prudential regulator, and any other agency having
jurisdiction over a covered person subject to supervision and
primary enforcement by the Bureau pursuant to section 1025
may not be required by this section to make available to the
consumer--
(A) any confidential commercial information, including an
algorithm used to derive credit scores or other risk scores
or predictors;
(B) any information collected by the covered person for the
purpose of preventing fraud or money laundering, or detecting
or making any report regarding other unlawful or potentially
unlawful conduct;
(C) any information required to be kept confidential by any
other provision of law; or
(D) any nonpublic or confidential information, including
confidential supervisory information.
(d) Agreements With Other Agencies.--The Bureau shall enter
into a memorandum of understanding with any affected Federal
regulatory agency to establish procedures by which any
covered person, and the prudential regulators, and any other
agency having jurisdiction over a covered person, including
the Secretary of the Department of Housing and Urban
Development and the Secretary of Education, shall comply with
this section.

SEC. 1035. PRIVATE EDUCATION LOAN OMBUDSMAN.

(a) Establishment.--The Secretary, in consultation with the
Director, shall designate a Private Education Loan Ombudsman
(in this section referred to as the ``Ombudsman'') within the
Bureau, to provide timely assistance to borrowers of private
education loans.

[[Page S3240]]

(b) Public Information.--The Secretary and the Director
shall disseminate information about the availability and
functions of the Ombudsman to borrowers and potential
borrowers, as well as institutions of higher education,
lenders, guaranty agencies, loan servicers, and other
participants in private education student loan programs.
(c) Functions of Ombudsman.--The Ombudsman designated under
this subsection shall--
(1) in accordance with regulations of the Director,
receive, review, and attempt to resolve informally complaints
from borrowers of loans described in subsection (a),
including, as appropriate, attempts to resolve such
complaints in collaboration with the Department of Education
and with institutions of higher education, lenders, guaranty
agencies, loan servicers, and other participants in private
education loan programs;
(2) not later than 90 days after the designated transfer
date, establish a memorandum of understanding with the
student loan ombudsman established under section 141(f) of
the Higher Education Act of 1965 (20 U.S.C. 1018(f)), to
ensure coordination in providing assistance to and serving
borrowers seeking to resolve complaints related to their
private education or Federal student loans;
(3) compile and analyze data on borrower complaints
regarding private education loans; and
(4) make appropriate recommendations to the Director, the
Secretary, the Secretary of Education, the Committee on
Banking, Housing, and Urban Affairs and the Committee on
Health, Education, Labor, and Pensions of the Senate and the
Committee on Financial Services and the Committee on
Education and Labor of the House of Representatives.
(d) Annual Reports.--
(1) In general.--The Ombudsman shall prepare an annual
report that describes the activities, and evaluates the
effectiveness of the Ombudsman during the preceding year.
(2) Submission.--The report required by paragraph (1) shall
be submitted on the same date annually to the Secretary, the
Secretary of Education, the Committee on Banking, Housing,
and Urban Affairs and the Committee on Health, Education,
Labor, and Pensions of the Senate and the Committee on
Financial Services and the Committee on Education and Labor
of the House of Representatives.
(e) Definitions.--For purposes of this section, the terms
``private education loan'' and ``institution of higher
education'' have the same meanings as in section 140 of the
Truth in Lending Act (15 U.S.C. 1650).

SEC. 1036. EFFECTIVE DATE.

This subtitle shall take effect on the designated transfer
date.

Subtitle D--Preservation of State Law

SEC. 1041. RELATION TO STATE LAW.

(a) In General.--
(1) Rule of construction.--This title, other than sections
1044 through 1048, may not be construed as annulling,
altering, or affecting, or exempting any person subject to
the provisions of this title from complying with, the
statutes, regulations, orders, or interpretations in effect
in any State, except to the extent that any such provision of
law is inconsistent with the provisions of this title, and
then only to the extent of the inconsistency.
(2) Greater protection under state law.--For purposes of
this subsection, a statute, regulation, order, or
interpretation in effect in any State is not inconsistent
with the provisions of this title if the protection that such
statute, regulation, order, or interpretation affords to
consumers is greater than the protection provided under this
title. A determination regarding whether a statute,
regulation, order, or interpretation in effect in any State
is inconsistent with the provisions of this title may be made
by the Bureau on its own motion or in response to a
nonfrivolous petition initiated by any interested person.
(b) Relation to Other Provisions of Enumerated Consumer
Laws That Relate to State Law.--No provision of this title,
except as provided in section 1083, shall be construed as
modifying, limiting, or superseding the operation of any
provision of an enumerated consumer law that relates to the
application of a law in effect in any State with respect to
such Federal law.
(c) Additional Consumer Protection Regulations in Response
to State Action.--
(1) Notice of proposed rule required.--The Bureau shall
issue a notice of proposed rulemaking whenever a majority of
the States has enacted a resolution in support of the
establishment or modification of a consumer protection
regulation by the Bureau.
(2) Bureau considerations required for issuance of final
regulation.--Before prescribing a final regulation based upon
a notice issued pursuant to paragraph (1), the Bureau shall
take into account whether--
(A) the proposed regulation would afford greater protection
to consumers than any existing regulation;
(B) the intended benefits of the proposed regulation for
consumers would outweigh any increased costs or
inconveniences for consumers, and would not discriminate
unfairly against any category or class of consumers; and
(C) a Federal banking agency has advised that the proposed
regulation is likely to present an unacceptable safety and
soundness risk to insured depository institutions.
(3) Explanation of considerations.--The Bureau--
(A) shall include a discussion of the considerations
required in paragraph (2) in the Federal Register notice of a
final regulation prescribed pursuant to this subsection; and
(B) whenever the Bureau determines not to prescribe a final
regulation, shall publish an explanation of such
determination in the Federal Register, and provide a copy of
such explanation to each State that enacted a resolution in
support of the proposed regulation, the Committee on
Financial Services of the House of Representatives, and the
Committee on Banking, Housing, and Urban Affairs of the
Senate.
(4) Reservation of authority.--No provision of this
subsection shall be construed as limiting or restricting the
authority of the Bureau to enhance consumer protection
standards established pursuant to this title in response to
its own motion or in response to a request by any other
interested person.
(5) Rule of construction.--No provision of this subsection
shall be construed as exempting the Bureau from complying
with subchapter II of chapter 5 of title 5, United States
Code.
(6) Definition.--For purposes of this subsection, the term
``consumer protection regulation'' means a regulation that
the Bureau is authorized to prescribe under the Federal
consumer financial laws.

SEC. 1042. PRESERVATION OF ENFORCEMENT POWERS OF STATES.

(a) In General.--
(1) Action by state.--The attorney general (or the
equivalent thereof) of any State may bring a civil action in
the name of such State, as parens patriae on behalf of
natural persons residing in such State, in any district court
of the United States in that State or in State court having
jurisdiction over the defendant, to enforce provisions of
this title or regulations issued thereunder and to secure
remedies under provisions of this title or remedies otherwise
provided under other law. A State regulator may bring a civil
action or other appropriate proceeding to enforce the
provisions of this title or regulations issued thereunder
with respect to any entity that is State-chartered,
incorporated, licensed, or otherwise authorized to do
business under State law, and to secure remedies under
provisions of this title or remedies otherwise provided under
other provisions of law with respect to a State-chartered
entity.
(2) Rule of construction.--No provision of this title shall
be construed as modifying, limiting, or superseding the
operation of any provision of an enumerated consumer law that
relates to the authority of a State attorney general or State
regulator to enforce such Federal law.
(b) Consultation Required.--
(1) Notice.--
(A) In general.--Before initiating any action in a court or
other administrative or regulatory proceeding against any
covered person to enforce any provision of this title,
including any regulation prescribed by the Director under
this title, a State attorney general or State regulator shall
timely provide a copy of the complete complaint to be filed
and written notice describing such action or proceeding to
the Bureau and the prudential regulator, if any, or the
designee thereof.
(B) Emergency action.--If prior notice is not practicable,
the State attorney general or State regulator shall provide a
copy of the complete complaint and the notice to the Bureau
and the prudential regulator, if any, immediately upon
instituting the action or proceeding.
(C) Contents of notice.--The notification required under
this paragraph shall, at a minimum, describe--
(i) the identity of the parties;
(ii) the alleged facts underlying the proceeding; and
(iii) whether there may be a need to coordinate the
prosecution of the proceeding so as not to interfere with any
action, including any rulemaking, undertaken by the Director,
a prudential regulator, or another Federal agency.
(2) Bureau response.--In any action described in paragraph
(1), the Bureau may--
(A) intervene in the action as a party;
(B) upon intervening--
(i) remove the action to the appropriate United States
district court, if the action was not originally brought
there; and
(ii) be heard on all matters arising in the action; and
(C) appeal any order or judgment, to the same extent as any
other party in the proceeding may.
(c) Regulations.--The Director shall prescribe regulations
to implement the requirements of this section and, from time
to time, provide guidance in order to further coordinate
actions with the State attorneys general and other
regulators.
(d) Preservation of State Authority.--
(1) State claims.--No provision of this section shall be
construed as altering, limiting, or affecting the authority
of a State attorney general or any other regulatory or
enforcement agency or authority to bring an action or other
regulatory proceeding arising solely under the law in effect
in that State.
(2) State securities regulators.--No provision of this
title shall be construed as altering, limiting, or affecting
the authority of a State securities commission (or any agency
or office performing like functions) under State law to adopt
rules, initiate enforcement proceedings, or take any other
action with respect to a person regulated by such commission
or authority.

[[Page S3241]]

(3) State insurance regulators.--No provision of this title
shall be construed as altering, limiting, or affecting the
authority of a State insurance commission or State insurance
regulator under State law to adopt rules, initiate
enforcement proceedings, or take any other action with
respect to a person regulated by such commission or
regulator.

SEC. 1043. PRESERVATION OF EXISTING CONTRACTS.

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

SEC. 1044. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS
AND SUBSIDIARIES CLARIFIED.

(a) In General.--Chapter one of title LXII of the Revised
Statutes of the United States (12 U.S.C. 21 et seq.) is
amended by inserting after section 5136B the following new
section:

``SEC. 5136C. STATE LAW PREEMPTION STANDARDS FOR NATIONAL
BANKS AND SUBSIDIARIES CLARIFIED.

``(a) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) National bank.--The term `national bank' includes--
``(A) any bank organized under the laws of the United
States; and
``(B) any Federal branch established in accordance with the
International Banking Act of 1978.
``(2) State consumer financial laws.--The term `State
consumer financial law' means a State law that does not
directly or indirectly discriminate against national banks
and that directly and specifically regulates the manner,
content, or terms and conditions of any financial transaction
(as may be authorized for national banks to engage in), or
any account related thereto, with respect to a consumer.
``(3) Other definitions.--The terms `affiliate',
`subsidiary', `includes', and `including' have the same
meanings as in section 3 of the Federal Deposit Insurance
Act.
``(b) Preemption Standard.--
``(1) In general.--State consumer financial laws are
preempted, only if--
``(A) application of a State consumer financial law would
have a discriminatory effect on national banks, in comparison
with the effect of the law on a bank chartered by that State;
``(B) the preemption of the State consumer financial law is
in accordance with the legal standard of the decision of the
Supreme Court of the United States in Barnett Bank of Marion
County, N.A. v. Nelson, Florida Insurance Commissioner, et
al, 517 U.S. 25 (1996), and a preemption determination under
this subparagraph may be made by a court or by regulation or
order of the Comptroller of the Currency, in accordance with
applicable law, on a case-by-case basis, and any such
determination by a court shall comply with the standards set
forth in subsection (d), with the court making the finding
under subsection (d), de novo; or
``(C) the State consumer financial law is preempted by a
provision of Federal law other than this title.
``(2) Savings clause.--This title does not preempt, annul,
or affect the applicability of any State law to any
subsidiary or affiliate of a national bank (other than a
subsidiary or affiliate that is chartered as a national
bank).
``(3) Case-by-case basis.--
``(A) Definition.--As used in this section the term `case-
by-case basis' refers to a determination pursuant to this
section made by the Comptroller concerning the impact of a
particular State consumer financial law on any national bank
that is subject to that law, or the law of any other State
with substantively equivalent terms.
``(B) Consultation.--When making a determination on a case-
by-case basis that a State consumer financial law of another
State has substantively equivalent terms as one that the
Comptroller is preempting, the Comptroller shall first
consult with the Bureau of Consumer Financial Protection and
shall take the views of the Bureau into account when making
the determination.
``(4) Rule of construction.--This title does not occupy the
field in any area of State law.
``(5) Standards of review.--
``(A) Preemption.--A court reviewing any determinations
made by the Comptroller regarding preemption of a State law
by this title shall assess the validity of such
determinations, depending upon the thoroughness evident in
the consideration of the agency, the validity of the
reasoning of the agency, the consistency with other valid
determinations made by the agency, and other factors which
the court finds persuasive and relevant to its decision.
``(B) Savings clause.--Except as provided in subparagraph
(A), nothing in this section shall affect the deference that
a court may afford to the Comptroller in making
determinations regarding the meaning or interpretation of
title LXII of the Revised Statutes of the United States or
other Federal laws.
``(6) Comptroller determination not delegable.--Any
regulation, order, or determination made by the Comptroller
of the Currency under paragraph (1)(B) shall be made by the
Comptroller, and shall not be delegable to another officer or
employee of the Comptroller of the Currency.
``(c) Substantial Evidence.--No regulation or order of the
Comptroller of the Currency prescribed under subsection
(b)(1)(B), shall be interpreted or applied so as to
invalidate, or otherwise declare inapplicable to a national
bank, the provision of the State consumer financial law,
unless substantial evidence, made on the record of the
proceeding, supports the specific finding regarding the
preemption of such provision in accordance with the legal
standard of the decision of the Supreme Court of the United
States in Barnett Bank of Marion County, N.A. v. Nelson,
Florida Insurance Commissioner, et al., 517 U.S. 25 (1996).
``(d) Other Federal Laws.--Notwithstanding any other
provision of law, the Comptroller of the Currency may not
prescribe a regulation or order pursuant to subsection
(b)(1)(B) until the Comptroller of the Currency, after
consultation with the Director of the Bureau of Consumer
Financial Protection, makes a finding, in writing, that a
Federal law provides a substantive standard, applicable to a
national bank, which regulates the particular conduct,
activity, or authority that is subject to such provision of
the State consumer financial law.
``(e) Periodic Review of Preemption Determinations.--
``(1) In general.--The Comptroller of the Currency shall
periodically conduct a review, through notice and public
comment, of each determination that a provision of Federal
law preempts a State consumer financial law. The agency shall
conduct such review within the 5-year period after
prescribing or otherwise issuing such determination, and at
least once during each 5-year period thereafter. After
conducting the review of, and inspecting the comments made
on, the determination, the agency shall publish a notice in
the Federal Register announcing the decision to continue or
rescind the determination or a proposal to amend the
determination. Any such notice of a proposal to amend a
determination and the subsequent resolution of such proposal
shall comply with the procedures set forth in subsections (a)
and (b) of section 5244 of the Revised Statutes of the United
States (12 U.S.C. 43 (a), (b)).
``(2) Reports to congress.--At the time of issuing a review
conducted under paragraph (1), the Comptroller of the
Currency shall submit a report regarding such review to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate. The report submitted to the
respective committees shall address whether the agency
intends to continue, rescind, or propose to amend any
determination that a provision of Federal law preempts a
State consumer financial law, and the reasons therefor.
``(f) Application of State Consumer Financial Law to
Subsidiaries and Affiliates.--Notwithstanding any provision
of this title, a State consumer financial law shall apply to
a subsidiary or affiliate of a national bank (other than a
subsidiary or affiliate that is chartered as a national bank)
to the same extent that the State consumer financial law
applies to any person, corporation, or other entity subject
to such State law.
``(g) Preservation of Powers Related to Charging
Interest.--No provision of this title shall be construed as
altering or otherwise affecting the authority conferred by
section 5197 of the Revised Statutes of the United States (12
U.S.C. 85) for the charging of interest by a national bank at
the rate allowed by the laws of the State, territory, or
district where the bank is located, including with respect to
the meaning of `interest' under such provision.
``(h) Transparency of OCC Preemption Determinations.--The
Comptroller of the Currency shall publish and update no less
frequently than quarterly, a list of preemption
determinations by the Comptroller of the Currency then in
effect that identifies the activities and practices covered
by each determination and the requirements and constraints
determined to be preempted.''.
(b) Clerical Amendment.--The table of sections for chapter
one of title LXII of the Revised Statutes of the United
States is amended by inserting after the item relating to
section 5136B the following new item:

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

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

Section 5136C of the Revised Statutes of the United States
(as added by this subtitle) is amended by adding at the end
the following:
``(i) Clarification of Law Applicable to Nondepository
Institution Subsidiaries and Affiliates of National Banks.--
``(1) Definitions.--For purposes of this subsection, the
terms `depository institution', `subsidiary', and `affiliate'
have the same meanings as in section 3 of the Federal Deposit
Insurance Act.
``(2) Rule of construction.--No provision of this title
shall be construed as preempting, annulling, or affecting the
applicability of State law to any subsidiary, affiliate, or
agent of a national bank (other than

[[Page S3242]]

a subsidiary, affiliate, or agent that is chartered as a
national bank).''.

SEC. 1046. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS
ASSOCIATIONS AND SUBSIDIARIES CLARIFIED.

(a) In General.--The Home Owners' Loan Act (12 U.S.C. 1461
et seq.) is amended by inserting after section 5 the
following new section:

``SEC. 6. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS
ASSOCIATIONS CLARIFIED.

``(a) In General.--Any determination by a court or by the
Director or any successor officer or agency regarding the
relation of State law to a provision of this Act or any
regulation or order prescribed under this Act shall be made
in accordance with the laws and legal standards applicable to
national banks regarding the preemption of State law.
``(b) Principles of Conflict Preemption Applicable.--
Notwithstanding the authorities granted under sections 4 and
5, this Act does not occupy the field in any area of State
law.''.
(b) Clerical Amendment.--The table of sections for the Home
Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended by
striking the item relating to section 6 and inserting the
following new item:

``Sec. 6.. State law preemption standards for Federal savings
associations and subsidiaries clarified.''.

SEC. 1047. VISITORIAL STANDARDS FOR NATIONAL BANKS AND
SAVINGS ASSOCIATIONS.

(a) National Banks.--Section 5136C of the Revised Statutes
of the United States (as added by this subtitle) is amended
by adding at the end the following:
``(j) Visitorial Powers.--
``(1) In general.--No provision of this title which relates
to visitorial powers to which any national bank is subject
shall be construed as limiting or restricting the authority
of any attorney general (or other chief law enforcement
officer) of any State to bring any action in any court of
appropriate jurisdiction, as authorized under section
5240(a)--
``(A) to enforce any applicable provision of Federal or
State law, as authorized by such law; or
``(B) on behalf of residents of such State, to enforce any
applicable provision of any Federal or nonpreempted State law
against a national bank, as authorized by such law, or to
seek relief for such residents from any violation of any such
law by any national bank.
``(2) Prior consultation with occ required.--The attorney
general (or other chief law enforcement officer) of any State
shall consult with the Comptroller of the Currency before
acting under paragraph (1).
``(k) Enforcement Actions.--The ability of the Comptroller
of the Currency to bring an enforcement action under this
title or section 5 of the Federal Trade Commission Act does
not preclude any private party from enforcing rights granted
under Federal or State law in the courts.''.
(b) Savings Associations.--Section 6 of the Home Owners'
Loan Act (as added by this title) is amended by adding at the
end the following:
``(c) Visitorial Powers.--
``(1) In general.--No provision of this Act shall be
construed as limiting or restricting the authority of any
attorney general (or other chief law enforcement officer) of
any State to bring any action in any court of appropriate
jurisdiction--
``(A) to enforce any applicable provision of Federal or
State law, as authorized by such law; or
``(B) on behalf of residents of such State, to enforce any
applicable provision of any Federal or nonpreempted State law
against a Federal savings association, as authorized by such
law, or to seek relief for such residents from any violation
of any such law by any Federal savings association.
``(2) Prior consultation with occ required.--The attorney
general (or other chief law enforcement officer) of any State
shall consult with the Comptroller of the Currency before
acting under paragraph (1).
``(d) Enforcement Actions.--The ability of the Comptroller
of the Currency to bring an enforcement action under this Act
or section 5 of the Federal Trade Commission Act does not
preclude any private party from enforcing rights granted
under Federal or State law in the courts.''.

SEC. 1048. EFFECTIVE DATE.

This subtitle shall become effective on the designated
transfer date.

Subtitle E--Enforcement Powers

SEC. 1051. DEFINITIONS.

For purposes of this subtitle, the following definitions
shall apply:
(1) Bureau investigation.--The term ``Bureau
investigation'' means any inquiry conducted by a Bureau
investigator for the purpose of ascertaining whether any
person is or has been engaged in any conduct that is a
violation, as defined in this section.
(2) Bureau investigator.--The term ``Bureau investigator''
means any attorney or investigator employed by the Bureau who
is charged with the duty of enforcing or carrying into effect
any Federal consumer financial law.
(3) Civil investigative demand and demand.--The terms
``civil investigative demand'' and ``demand'' mean any demand
issued by the Bureau.
(4) Custodian.--The term ``custodian'' means the custodian
or any deputy custodian designated by the Bureau.
(5) Documentary material.--The term ``documentary
material'' includes the original or any copy of any book,
document, record, report, memorandum, paper, communication,
tabulation, chart, logs, electronic files, or other data or
data compilations stored in any medium.
(6) Violation.--The term ``violation'' means any act or
omission that, if proved, would constitute a violation of any
provision of Federal consumer financial law.

SEC. 1052. INVESTIGATIONS AND ADMINISTRATIVE DISCOVERY.

(a) Joint Investigations.--
(1) In general.--The Bureau or, where appropriate, a Bureau
investigator, may engage in joint investigations and requests
for information, as authorized under this title.
(2) Fair lending.--The authority under paragraph (1)
includes matters relating to fair lending, and where
appropriate, joint investigations with, and requests for
information from, the Secretary of Housing and Urban
Development, the Attorney General of the United States, or
both.
(b) Subpoenas.--
(1) In general.--The Bureau or a Bureau investigator may
issue subpoenas for the attendance and testimony of witnesses
and the production of relevant papers, books, documents, or
other material in connection with hearings under this title.
(2) Failure to obey.--In the case of contumacy or refusal
to obey a subpoena issued pursuant to this paragraph and
served upon any person, the district court of the United
States for any district in which such person is found,
resides, or transacts business, upon application by the
Bureau or a Bureau investigator and after notice to such
person, may issue an order requiring such person to appear
and give testimony or to appear and produce documents or
other material.
(3) Contempt.--Any failure to obey an order of the court
under this subsection may be punished by the court as a
contempt thereof.
(c) Demands.--
(1) In general.--Whenever the Bureau has reason to believe
that any person may be in possession, custody, or control of
any documentary material or tangible things, or may have any
information, relevant to a violation, the Bureau may, before
the institution of any proceedings under the Federal consumer
financial law, issue in writing, and cause to be served upon
such person, a civil investigative demand requiring such
person to--
(A) produce such documentary material for inspection and
copying or reproduction in the form or medium requested by
the Bureau;
(B) submit such tangible things;
(C) file written reports or answers to questions;
(D) give oral testimony concerning documentary material,
tangible things, or other information; or
(E) furnish any combination of such material, answers, or
testimony.
(2) Requirements.--Each civil investigative demand shall
state the nature of the conduct constituting the alleged
violation which is under investigation and the provision of
law applicable to such violation.
(3) Production of documents.--Each civil investigative
demand for the production of documentary material shall--
(A) describe each class of documentary material to be
produced under the demand with such definiteness and
certainty as to permit such material to be fairly identified;
(B) prescribe a return date or dates which will provide a
reasonable period of time within which the material so
demanded may be assembled and made available for inspection
and copying or reproduction; and
(C) identify the custodian to whom such material shall be
made available.
(4) Production of things.--Each civil investigative demand
for the submission of tangible things shall--
(A) describe each class of tangible things to be submitted
under the demand with such definiteness and certainty as to
permit such things to be fairly identified;
(B) prescribe a return date or dates which will provide a
reasonable period of time within which the things so demanded
may be assembled and submitted; and
(C) identify the custodian to whom such things shall be
submitted.
(5) Demand for written reports or answers.--Each civil
investigative demand for written reports or answers to
questions shall--
(A) propound with definiteness and certainty the reports to
be produced or the questions to be answered;
(B) prescribe a date or dates at which time written reports
or answers to questions shall be submitted; and
(C) identify the custodian to whom such reports or answers
shall be submitted.
(6) Oral testimony.--Each civil investigative demand for
the giving of oral testimony shall--
(A) prescribe a date, time, and place at which oral
testimony shall be commenced; and
(B) identify a Bureau investigator who shall conduct the
investigation and the custodian to whom the transcript of
such investigation shall be submitted.
(7) Service.--Any civil investigative demand and any
enforcement petition filed under this section may be served--
(A) by any Bureau investigator at any place within the
territorial jurisdiction of any court of the United States;
and

[[Page S3243]]

(B) upon any person who is not found within the territorial
jurisdiction of any court of the United States--
(i) in such manner as the Federal Rules of Civil Procedure
prescribe for service in a foreign nation; and
(ii) to the extent that the courts of the United States
have authority to assert jurisdiction over such person,
consistent with due process, the United States District Court
for the District of Columbia shall have the same jurisdiction
to take any action respecting compliance with this section by
such person that such district court would have if such
person were personally within the jurisdiction of such
district court.
(8) Method of service.--Service of any civil investigative
demand or any enforcement petition filed under this section
may be made upon a person, including any legal entity, by--
(A) delivering a duly executed copy of such demand or
petition to the individual or to any partner, executive
officer, managing agent, or general agent of such person, or
to any agent of such person authorized by appointment or by
law to receive service of process on behalf of such person;
(B) delivering a duly executed copy of such demand or
petition to the principal office or place of business of the
person to be served; or
(C) depositing a duly executed copy in the United States
mails, by registered or certified mail, return receipt
requested, duly addressed to such person at the principal
office or place of business of such person.
(9) Proof of service.--
(A) In general.--A verified return by the individual
serving any civil investigative demand or any enforcement
petition filed under this section setting forth the manner of
such service shall be proof of such service.
(B) Return receipts.--In the case of service by registered
or certified mail, such return shall be accompanied by the
return post office receipt of delivery of such demand or
enforcement petition.
(10) Production of documentary material.--The production of
documentary material in response to a civil investigative
demand shall be made under a sworn certificate, in such form
as the demand designates, by the person, if a natural person,
to whom the demand is directed or, if not a natural person,
by any person having knowledge of the facts and circumstances
relating to such production, to the effect that all of the
documentary material required by the demand and in the
possession, custody, or control of the person to whom the
demand is directed has been produced and made available to
the custodian.
(11) Submission of tangible things.--The submission of
tangible things in response to a civil investigative demand
shall be made under a sworn certificate, in such form as the
demand designates, by the person to whom the demand is
directed or, if not a natural person, by any person having
knowledge of the facts and circumstances relating to such
production, to the effect that all of the tangible things
required by the demand and in the possession, custody, or
control of the person to whom the demand is directed have
been submitted to the custodian.
(12) Separate answers.--Each reporting requirement or
question in a civil investigative demand shall be answered
separately and fully in writing under oath, unless it is
objected to, in which event the reasons for the objection
shall be stated in lieu of an answer, and it shall be
submitted under a sworn certificate, in such form as the
demand designates, by the person, if a natural person, to
whom the demand is directed or, if not a natural person, by
any person responsible for answering each reporting
requirement or question, to the effect that all information
required by the demand and in the possession, custody,
control, or knowledge of the person to whom the demand is
directed has been submitted.
(13) Testimony.--
(A) In general.--
(i) Oath or affirmation.--Any Bureau investigator before
whom oral testimony is to be taken shall put the witness
under oath or affirmation, and shall personally, or by any
individual acting under the direction of and in the presence
of the Bureau investigator, record the testimony of the
witness.
(ii) Transcription.--The testimony shall be taken
stenographically and transcribed.
(iii) Transmission to custodian.--After the testimony is
fully transcribed, the Bureau investigator before whom the
testimony is taken shall promptly transmit a copy of the
transcript of the testimony to the custodian.
(B) Parties present.--Any Bureau investigator before whom
oral testimony is to be taken shall exclude from the place
where the testimony is to be taken all other persons, except
the person giving the testimony, the attorney of that person,
the officer before whom the testimony is to be taken, and any
stenographer taking such testimony.
(C) Location.--The oral testimony of any person taken
pursuant to a civil investigative demand shall be taken in
the judicial district of the United States in which such
person resides, is found, or transacts business, or in such
other place as may be agreed upon by the Bureau investigator
before whom the oral testimony of such person is to be taken
and such person.
(D) Attorney representation.--
(i) In general.--Any person compelled to appear under a
civil investigative demand for oral testimony pursuant to
this section may be accompanied, represented, and advised by
an attorney.
(ii) Authority.--The attorney may advise a person described
in clause (i), in confidence, either upon the request of such
person or upon the initiative of the attorney, with respect
to any question asked of such person.
(iii) Objections.--A person described in clause (i), or the
attorney for that person, may object on the record to any
question, in whole or in part, and such person shall briefly
state for the record the reason for the objection. An
objection may properly be made, received, and entered upon
the record when it is claimed that such person is entitled to
refuse to answer the question on grounds of any
constitutional or other legal right or privilege, including
the privilege against self-incrimination, but such person
shall not otherwise object to or refuse to answer any
question, and such person or attorney shall not otherwise
interrupt the oral examination.
(iv) Refusal to answer.--If a person described in clause
(i) refuses to answer any question--

(I) the Bureau may petition the district court of the
United States pursuant to this section for an order
compelling such person to answer such question; and
(II) on grounds of the privilege against self-
incrimination, the testimony of such person may be compelled
in accordance with the provisions of section 6004 of title
18, United States Code.

(E) Transcripts.--For purposes of this subsection--
(i) after the testimony of any witness is fully
transcribed, the Bureau investigator shall afford the witness
(who may be accompanied by an attorney) a reasonable
opportunity to examine the transcript;
(ii) the transcript shall be read to or by the witness,
unless such examination and reading are waived by the
witness;
(iii) any changes in form or substance which the witness
desires to make shall be entered and identified upon the
transcript by the Bureau investigator, with a statement of
the reasons given by the witness for making such changes;
(iv) the transcript shall be signed by the witness, unless
the witness in writing waives the signing, is ill, cannot be
found, or refuses to sign; and
(v) if the transcript is not signed by the witness during
the 30-day period following the date on which the witness is
first afforded a reasonable opportunity to examine the
transcript, the Bureau investigator shall sign the transcript
and state on the record the fact of the waiver, illness,
absence of the witness, or the refusal to sign, together with
any reasons given for the failure to sign.
(F) Certification by investigator.--The Bureau investigator
shall certify on the transcript that the witness was duly
sworn by him or her and that the transcript is a true record
of the testimony given by the witness, and the Bureau
investigator shall promptly deliver the transcript or send it
by registered or certified mail to the custodian.
(G) Copy of transcript.--The Bureau investigator shall
furnish a copy of the transcript (upon payment of reasonable
charges for the transcript) to the witness only, except that
the Bureau may for good cause limit such witness to
inspection of the official transcript of his testimony.
(H) Witness fees.--Any witness appearing for the taking of
oral testimony pursuant to a civil investigative demand shall
be entitled to the same fees and mileage which are paid to
witnesses in the district courts of the United States.
(d) Confidential Treatment of Demand Material.--
(1) In general.--Documentary materials and tangible things
received as a result of a civil investigative demand shall be
subject to requirements and procedures regarding
confidentiality, in accordance with rules established by the
Bureau.
(2) Disclosure to congress.--No rule established by the
Bureau regarding the confidentiality of materials submitted
to, or otherwise obtained by, the Bureau shall be intended to
prevent disclosure to either House of Congress or to an
appropriate committee of the Congress, except that the Bureau
is permitted to adopt rules allowing prior notice to any
party that owns or otherwise provided the material to the
Bureau and had designated such material as confidential.
(e) Petition for Enforcement.--
(1) In general.--Whenever any person fails to comply with
any civil investigative demand duly served upon him under
this section, or whenever satisfactory copying or
reproduction of material requested pursuant to the demand
cannot be accomplished and such person refuses to surrender
such material, the Bureau, through such officers or attorneys
as it may designate, may file, in the district court of the
United States for any judicial district in which such person
resides, is found, or transacts business, and serve upon such
person, a petition for an order of such court for the
enforcement of this section.
(2) Service of process.--All process of any court to which
application may be made as provided in this subsection may be
served in any judicial district.
(f) Petition for Order Modifying or Setting Aside Demand.--
(1) In general.--Not later than 20 days after the service
of any civil investigative demand upon any person under
subsection

[[Page S3244]]

(b), or at any time before the return date specified in the
demand, whichever period is shorter, or within such period
exceeding 20 days after service or in excess of such return
date as may be prescribed in writing, subsequent to service,
by any Bureau investigator named in the demand, such person
may file with the Bureau a petition for an order by the
Bureau modifying or setting aside the demand.
(2) Compliance during pendency.--The time permitted for
compliance with the demand in whole or in part, as determined
proper and ordered by the Bureau, shall not run during the
pendency of a petition under paragraph (1) at the Bureau,
except that such person shall comply with any portions of the
demand not sought to be modified or set aside.
(3) Specific grounds.--A petition under paragraph (1) shall
specify each ground upon which the petitioner relies in
seeking relief, and may be based upon any failure of the
demand to comply with the provisions of this section, or upon
any constitutional or other legal right or privilege of such
person.
(g) Custodial Control.--At any time during which any
custodian is in custody or control of any documentary
material, tangible things, reports, answers to questions, or
transcripts of oral testimony given by any person in
compliance with any civil investigative demand, such person
may file, in the district court of the United States for the
judicial district within which the office of such custodian
is situated, and serve upon such custodian, a petition for an
order of such court requiring the performance by such
custodian of any duty imposed upon him by this section or
rule promulgated by the Bureau.
(h) Jurisdiction of Court.--
(1) In general.--Whenever any petition is filed in any
district court of the United States under this section, such
court shall have jurisdiction to hear and determine the
matter so presented, and to enter such order or orders as may
be required to carry out the provisions of this section.
(2) Appeal.--Any final order entered as described in
paragraph (1) shall be subject to appeal pursuant to section
1291 of title 28, United States Code.

SEC. 1053. HEARINGS AND ADJUDICATION PROCEEDINGS.

(a) In General.--The Bureau is authorized to conduct
hearings and adjudication proceedings with respect to any
person in the manner prescribed by chapter 5 of title 5,
United States Code in order to ensure or enforce compliance
with--
(1) the provisions of this title, including any rules
prescribed by the Bureau under this title; and
(2) any other Federal law that the Bureau is authorized to
enforce, including an enumerated consumer law, and any
regulations or order prescribed thereunder, unless such
Federal law specifically limits the Bureau from conducting a
hearing or adjudication proceeding and only to the extent of
such limitation.
(b) Special Rules for Cease-and-Desist Proceedings.--
(1) Orders authorized.--
(A) In general.--If, in the opinion of the Bureau, any
covered person or service provider is engaging or has engaged
in an activity that violates a law, rule, or any condition
imposed in writing on the person by the Bureau, the Bureau
may, subject to sections 1024, 1025, and 1026, issue and
serve upon the covered person or service provider a notice of
charges in respect thereof.
(B) Content of notice.--The notice under subparagraph (A)
shall contain a statement of the facts constituting the
alleged violation or violations, and shall fix a time and
place at which a hearing will be held to determine whether an
order to cease and desist should issue against the covered
person or service provider, such hearing to be held not
earlier than 30 days nor later than 60 days after the date of
service of such notice, unless an earlier or a later date is
set by the Bureau, at the request of any party so served.
(C) Consent.--Unless the party or parties served under
subparagraph (B) appear at the hearing personally or by a
duly authorized representative, such person shall be deemed
to have consented to the issuance of the cease-and-desist
order.
(D) Procedure.--In the event of consent under subparagraph
(C), or if, upon the record, made at any such hearing, the
Bureau finds that any violation specified in the notice of
charges has been established, the Bureau may issue and serve
upon the covered person or service provider an order to cease
and desist from the violation or practice. Such order may, by
provisions which may be mandatory or otherwise, require the
covered person or service provider to cease and desist from
the subject activity, and to take affirmative action to
correct the conditions resulting from any such violation.
(2) Effectiveness of order.--A cease-and-desist order shall
become effective at the expiration of 30 days after the date
of service of an order under paragraph (1) upon the covered
person or service provider concerned (except in the case of a
cease-and-desist order issued upon consent, which shall
become effective at the time specified therein), and shall
remain effective and enforceable as provided therein, except
to such extent as the order is stayed, modified, terminated,
or set aside by action of the Bureau or a reviewing court.
(3) Decision and appeal.--Any hearing provided for in this
subsection shall be held in the Federal judicial district or
in the territory in which the residence or principal office
or place of business of the person is located unless the
person consents to another place, and shall be conducted in
accordance with the provisions of chapter 5 of title 5 of the
United States Code. After such hearing, and within 90 days
after the Bureau has notified the parties that the case has
been submitted to the Bureau for final decision, the Bureau
shall render its decision (which shall include findings of
fact upon which its decision is predicated) and shall issue
and serve upon each party to the proceeding an order or
orders consistent with the provisions of this section.
Judicial review of any such order shall be exclusively as
provided in this subsection. Unless a petition for review is
timely filed in a court of appeals of the United States, as
provided in paragraph (4), and thereafter until the record in
the proceeding has been filed as provided in paragraph (4),
the Bureau may at any time, upon such notice and in such
manner as the Bureau shall determine proper, modify,
terminate, or set aside any such order. Upon filing of the
record as provided, the Bureau may modify, terminate, or set
aside any such order with permission of the court.
(4) Appeal to court of appeals.--Any party to any
proceeding under this subsection may obtain a review of any
order served pursuant to this subsection (other than an order
issued with the consent of the person concerned) by the
filing in the court of appeals of the United States for the
circuit in which the principal office of the covered person
is located, or in the United States Court of Appeals for the
District of Columbia Circuit, within 30 days after the date
of service of such order, a written petition praying that the
order of the Bureau be modified, terminated, or set aside. A
copy of such petition shall be forthwith transmitted by the
clerk of the court to the Bureau, and thereupon the Bureau
shall file in the court the record in the proceeding, as
provided in section 2112 of title 28 of the United States
Code. Upon the filing of such petition, such court shall have
jurisdiction, which upon the filing of the record shall
except as provided in the last sentence of paragraph (3) be
exclusive, to affirm, modify, terminate, or set aside, in
whole or in part, the order of the Bureau. Review of such
proceedings shall be had as provided in chapter 7 of title 5
of the United States Code. The judgment and decree of the
court shall be final, except that the same shall be subject
to review by the Supreme Court of the United States, upon
certiorari, as provided in section 1254 of title 28 of the
United States Code.
(5) No stay.--The commencement of proceedings for judicial
review under paragraph (4) shall not, unless specifically
ordered by the court, operate as a stay of any order issued
by the Bureau.
(c) Special Rules for Temporary Cease-and-Desist
Proceedings.--
(1) In general.--Whenever the Bureau determines that the
violation specified in the notice of charges served upon a
person, including a service provider, pursuant to subsection
(b), or the continuation thereof, is likely to cause the
person to be insolvent or otherwise prejudice the interests
of consumers before the completion of the proceedings
conducted pursuant to subsection (b), the Bureau may issue a
temporary order requiring the person to cease and desist from
any such violation or practice and to take affirmative action
to prevent or remedy such insolvency or other condition
pending completion of such proceedings. Such order may
include any requirement authorized under this subtitle. Such
order shall become effective upon service upon the person
and, unless set aside, limited, or suspended by a court in
proceedings authorized by paragraph (2), shall remain
effective and enforceable pending the completion of the
administrative proceedings pursuant to such notice and until
such time as the Bureau shall dismiss the charges specified
in such notice, or if a cease-and-desist order is issued
against the person, until the effective date of such order.
(2) Appeal.--Not later than 10 days after the covered
person or service provider concerned has been served with a
temporary cease-and-desist order, the person may apply to the
United States district court for the judicial district in
which the residence or principal office or place of business
of the person is located, or the United States District Court
for the District of Columbia, for an injunction setting
aside, limiting, or suspending the enforcement, operation, or
effectiveness of such order pending the completion of the
administrative proceedings pursuant to the notice of charges
served upon the person under subsection (b), and such court
shall have jurisdiction to issue such injunction.
(3) Incomplete or inaccurate records.--
(A) Temporary order.--If a notice of charges served under
subsection (b) specifies, on the basis of particular facts
and circumstances, that the books and records of a covered
person or service provider are so incomplete or inaccurate
that the Bureau is unable to determine the financial
condition of that person or the details or purpose of any
transaction or transactions that may have a material effect
on the financial condition of that person, the Bureau may
issue a temporary order requiring--
(i) the cessation of any activity or practice which gave
rise, whether in whole or in part, to the incomplete or
inaccurate state of the books or records; or
(ii) affirmative action to restore such books or records to
a complete and accurate

[[Page S3245]]

state, until the completion of the proceedings under
subsection (b)(1).
(B) Effective period.--Any temporary order issued under
subparagraph (A)--
(i) shall become effective upon service; and
(ii) unless set aside, limited, or suspended by a court in
proceedings under paragraph (2), shall remain in effect and
enforceable until the earlier of--

(I) the completion of the proceeding initiated under
subsection (b) in connection with the notice of charges; or
(II) the date the Bureau determines, by examination or
otherwise, that the books and records of the covered person
or service provider are accurate and reflect the financial
condition thereof.

(d) Special Rules for Enforcement of Orders.--
(1) In general.--The Bureau may in its discretion apply to
the United States district court within the jurisdiction of
which the principal office or place of business of the person
is located, for the enforcement of any effective and
outstanding notice or order issued under this section, and
such court shall have jurisdiction and power to order and
require compliance herewith.
(2) Exception.--Except as otherwise provided in this
subsection, no court shall have jurisdiction to affect by
injunction or otherwise the issuance or enforcement of any
notice or order or to review, modify, suspend, terminate, or
set aside any such notice or order.
(e) Rules.--The Bureau shall prescribe rules establishing
such procedures as may be necessary to carry out this
section.

SEC. 1054. LITIGATION AUTHORITY.

(a) In General.--If any person violates a Federal consumer
financial law, the Bureau may, subject to sections 1024,
1025, and 1026, commence a civil action against such person
to impose a civil penalty or to seek all appropriate legal
and equitable relief including a permanent or temporary
injunction as permitted by law.
(b) Representation.--The Bureau may act in its own name and
through its own attorneys in enforcing any provision of this
title, rules thereunder, or any other law or regulation, or
in any action, suit, or proceeding to which the Bureau is a
party.
(c) Compromise of Actions.--The Bureau may compromise or
settle any action if such compromise is approved by the
court.
(d) Notice to the Attorney General.--When commencing a
civil action under Federal consumer financial law, or any
rule thereunder, the Bureau shall notify the Attorney General
and, with respect to a civil action against an insured
depository institution or insured credit union, the
appropriate prudential regulator.
(e) Appearance Before the Supreme Court.--The Bureau may
represent itself in its own name before the Supreme Court of
the United States, provided that the Bureau makes a written
request to the Attorney General within the 10-day period
which begins on the date of entry of the judgment which would
permit any party to file a petition for writ of certiorari,
and the Attorney General concurs with such request or fails
to take action within 60 days of the request of the Bureau.
(f) Forum.--Any civil action brought under this title may
be brought in a United States district court or in any court
of competent jurisdiction of a state in a district in which
the defendant is located or resides or is doing business, and
such court shall have jurisdiction to enjoin such person and
to require compliance with any Federal consumer financial
law.
(g) Time for Bringing Action.--
(1) In general.--Except as otherwise permitted by law or
equity, no action may be brought under this title more than 3
years after the date of discovery of the violation to which
an action relates.
(2) Limitations under other federal laws.--
(A) In general.--For purposes of this subsection, an action
arising under this title does not include claims arising
solely under enumerated consumer laws.
(B) Bureau authority.--In any action arising solely under
an enumerated consumer law, the Bureau may commence, defend,
or intervene in the action in accordance with the
requirements of that provision of law, as applicable.
(C) Transferred authority.--In any action arising solely
under laws for which authorities were transferred under
subtitles F and H, the Bureau may commence, defend, or
intervene in the action in accordance with the requirements
of that provision of law, as applicable.

SEC. 1055. RELIEF AVAILABLE.

(a) Administrative Proceedings or Court Actions.--
(1) Jurisdiction.--The court (or the Bureau, as the case
may be) in an action or adjudication proceeding brought under
Federal consumer financial law, shall have jurisdiction to
grant any appropriate legal or equitable relief with respect
to a violation of Federal consumer financial law, including a
violation of a rule or order prescribed under a Federal
consumer financial law.
(2) Relief.--Relief under this section may include, without
limitation--
(A) rescission or reformation of contracts;
(B) refund of moneys or return of real property;
(C) restitution;
(D) disgorgement or compensation for unjust enrichment;
(E) payment of damages or other monetary relief;
(F) public notification regarding the violation, including
the costs of notification;
(G) limits on the activities or functions of the person;
and
(H) civil money penalties, as set forth more fully in
subsection (c).
(3) No exemplary or punitive damages.--Nothing in this
subsection shall be construed as authorizing the imposition
of exemplary or punitive damages.
(b) Recovery of Costs.--In any action brought by the
Bureau, a State attorney general, or any State regulator to
enforce any Federal consumer financial law, the Bureau, the
State attorney general, or the State regulator may recover
its costs in connection with prosecuting such action if the
Bureau, the State attorney general, or the State regulator is
the prevailing party in the action.
(c) Civil Money Penalty in Court and Administrative
Actions.--
(1) In general.--Any person that violates, through any act
or omission, any provision of Federal consumer financial law
shall forfeit and pay a civil penalty pursuant to this
subsection.
(2) Penalty amounts.--
(A) First tier.--For any violation of a law, rule, or final
order or condition imposed in writing by the Bureau, a civil
penalty may not exceed $5,000 for each day during which such
violation or failure to pay continues.
(B) Second tier.--Notwithstanding paragraph (A), for any
person that recklessly engages in a violation of a Federal
consumer financial law, a civil penalty may not exceed
$25,000 for each day during which such violation continues.
(C) Third tier.--Notwithstanding subparagraphs (A) and (B),
for any person that knowingly violates a Federal consumer
financial law, a civil penalty may not exceed $1,000,000 for
each day during which such violation continues.
(3) Mitigating factors.--In determining the amount of any
penalty assessed under paragraph (2), the Bureau or the court
shall take into account the appropriateness of the penalty
with respect to--
(A) the size of financial resources and good faith of the
person charged;
(B) the gravity of the violation or failure to pay;
(C) the severity of the risks to or losses of the consumer,
which may take into account the number of products or
services sold or provided;
(D) the history of previous violations; and
(E) such other matters as justice may require.
(4) Authority to modify or remit penalty.--The Bureau may
compromise, modify, or remit any penalty which may be
assessed or had already been assessed under paragraph (2).
The amount of such penalty, when finally determined, shall be
exclusive of any sums owed by the person to the United States
in connection with the costs of the proceeding, and may be
deducted from any sums owing by the United States to the
person charged.
(5) Notice and hearing.--No civil penalty may be assessed
under this subsection with respect to a violation of any
Federal consumer financial law, unless--
(A) the Bureau gives notice and an opportunity for a
hearing to the person accused of the violation; or
(B) the appropriate court has ordered such assessment and
entered judgment in favor of the Bureau.

SEC. 1056. REFERRALS FOR CRIMINAL PROCEEDINGS.

If the Bureau obtains evidence that any person, domestic or
foreign, has engaged in conduct that may constitute a
violation of Federal criminal law, the Bureau shall have the
power to transmit such evidence to the Attorney General of
the United States, who may institute criminal proceedings
under appropriate law. Nothing in this section affects any
other authority of the Bureau to disclose information.

SEC. 1057. EMPLOYEE PROTECTION.

(a) In General.--No covered person or service provider
shall terminate or in any other way discriminate against, or
cause to be terminated or discriminated against, any covered
employee or any authorized representative of covered
employees by reason of the fact that such employee or
representative, whether at the initiative of the employee or
in the ordinary course of the duties of the employee (or any
person acting pursuant to a request of the employee), has--
(1) provided, caused to be provided, or is about to provide
or cause to be provided, information to the employer, the
Bureau, or any other State, local, or Federal, government
authority or law enforcement agency relating to any violation
of, or any act or omission that the employee reasonably
believes to be a violation of, any provision of this title or
any other provision of law that is subject to the
jurisdiction of the Bureau, or any rule, order, standard, or
prohibition prescribed by the Bureau;
(2) testified or will testify in any proceeding resulting
from the administration or enforcement of any provision of
this title or any other provision of law that is subject to
the jurisdiction of the Bureau, or any rule, order, standard,
or prohibition prescribed by the Bureau;
(3) filed, instituted, or caused to be filed or instituted
any proceeding under any Federal consumer financial law; or
(4) objected to, or refused to participate in, any
activity, policy, practice, or assigned task that the
employee (or other such person) reasonably believed to be in
violation of

[[Page S3246]]

any law, rule, order, standard, or prohibition, subject to
the jurisdiction of, or enforceable by, the Bureau.
(b) Definition of Covered Employee.--For the purposes of
this section, the term ``covered employee'' means any
individual performing tasks related to the offering or
provision of a consumer financial product or service.
(c) Procedures and Timetables.--
(1) Complaint.--
(A) In general.--A person who believes that he or she has
been discharged or otherwise discriminated against by any
person in violation of subsection (a) may, not later than 180
days after the date on which such alleged violation occurs,
file (or have any person file on his or her behalf) a
complaint with the Secretary of Labor alleging such discharge
or discrimination and identifying the person responsible for
such act.
(B) Actions of secretary of labor.--Upon receipt of such a
complaint, the Secretary of Labor shall notify, in writing,
the person named in the complaint who is alleged to have
committed the violation, of --
(i) the filing of the complaint;
(ii) the allegations contained in the complaint;
(iii) the substance of evidence supporting the complaint;
and
(iv) opportunities that will be afforded to such person
under paragraph (2).
(2) Investigation by secretary of labor.--
(A) In general.--Not later than 60 days after the date of
receipt of a complaint filed under paragraph (1), and after
affording the complainant and the person named in the
complaint who is alleged to have committed the violation that
is the basis for the complaint an opportunity to submit to
the Secretary of Labor a written response to the complaint
and an opportunity to meet with a representative of the
Secretary of Labor to present statements from witnesses, the
Secretary of Labor shall--
(i) initiate an investigation and determine whether there
is reasonable cause to believe that the complaint has merit;
and
(ii) notify the complainant and the person alleged to have
committed the violation of subsection (a), in writing, of
such determination.
(B) Notice of relief available.--If the Secretary of Labor
concludes that there is reasonable cause to believe that a
violation of subsection (a) has occurred, the Secretary of
Labor shall, together with the notice under subparagraph
(A)(ii), issue a preliminary order providing the relief
prescribed by paragraph (4)(B).
(C) Request for hearing.--Not later than 30 days after the
date of receipt of notification of a determination of the
Secretary of Labor under this paragraph, either the person
alleged to have committed the violation or the complainant
may file objections to the findings or preliminary order, or
both, and request a hearing on the record. The filing of such
objections shall not operate to stay any reinstatement remedy
contained in the preliminary order. Any such hearing shall be
conducted expeditiously, and if a hearing is not requested in
such 30-day period, the preliminary order shall be deemed a
final order that is not subject to judicial review.
(3) Grounds for determination of complaints.--
(A) In general.--The Secretary of Labor shall dismiss a
complaint filed under this subsection, and shall not conduct
an investigation otherwise required under paragraph (2),
unless the complainant makes a prima facie showing that any
behavior described in paragraphs (1) through (4) of
subsection (a) was a contributing factor in the unfavorable
personnel action alleged in the complaint.
(B) Rebuttal evidence.--Notwithstanding a finding by the
Secretary of Labor that the complainant has made the showing
required under subparagraph (A), no investigation otherwise
required under paragraph (2) shall be conducted, if the
employer demonstrates, by clear and convincing evidence, that
the employer would have taken the same unfavorable personnel
action in the absence of that behavior.
(C) Evidentiary standards.--The Secretary of Labor may
determine that a violation of subsection (a) has occurred
only if the complainant demonstrates that any behavior
described in paragraphs (1) through (4) of subsection (a) was
a contributing factor in the unfavorable personnel action
alleged in the complaint. Relief may not be ordered under
subparagraph (A) if the employer demonstrates by clear and
convincing evidence that the employer would have taken the
same unfavorable personnel action in the absence of that
behavior.
(4) Issuance of final orders; review procedures.--
(A) Timing.--Not later than 120 days after the date of
conclusion of any hearing under paragraph (2), the Secretary
of Labor shall issue a final order providing the relief
prescribed by this paragraph or denying the complaint. At any
time before issuance of a final order, a proceeding under
this subsection may be terminated on the basis of a
settlement agreement entered into by the Secretary of Labor,
the complainant, and the person alleged to have committed the
violation.
(B) Penalties.--
(i) Order of secretary of labor.--If, in response to a
complaint filed under paragraph (1), the Secretary of Labor
determines that a violation of subsection (a) has occurred,
the Secretary of Labor shall order the person who committed
such violation--

(I) to take affirmative action to abate the violation;
(II) to reinstate the complainant to his or her former
position, together with compensation (including back pay) and
restore the terms, conditions, and privileges associated with
his or her employment; and
(III) to provide compensatory damages to the complainant.

(ii) Penalty.--If an order is issued under clause (i), the
Secretary of Labor, at the request of the complainant, shall
assess against the person against whom the order is issued, a
sum equal to the aggregate amount of all costs and expenses
(including attorney fees and expert witness fees) reasonably
incurred, as determined by the Secretary of Labor, by the
complainant for, or in connection with, the bringing of the
complaint upon which the order was issued.
(C) Penalty for frivolous claims.--If the Secretary of
Labor finds that a complaint under paragraph (1) is frivolous
or has been brought in bad faith, the Secretary of Labor may
award to the prevailing employer a reasonable attorney fee,
not exceeding $1,000, to be paid by the complainant.
(D) De novo review.--
(i) Failure of the secretary to act.--If the Secretary of
Labor has not issued a final order within 210 days after the
date of filing of a complaint under this subsection, or
within 90 days after the date of receipt of a written
determination, the complainant may bring an action at law or
equity for de novo review in the appropriate district court
of the United States having jurisdiction, which shall have
jurisdiction over such an action without regard to the amount
in controversy, and which action shall, at the request of
either party to such action, be tried by the court with a
jury.
(ii) Procedures.--A proceeding under clause (i) shall be
governed by the same legal burdens of proof specified in
paragraph (3). The court shall have jurisdiction to grant all
relief necessary to make the employee whole, including
injunctive relief and compensatory damages, including--

(I) reinstatement with the same seniority status that the
employee would have had, but for the discharge or
discrimination;
(II) the amount of back pay, with interest; and
(III) compensation for any special damages sustained as a
result of the discharge or discrimination, including
litigation costs, expert witness fees, and reasonable
attorney fees.

(E) Other appeals.--Unless the complainant brings an action
under subparagraph (D), any person adversely affected or
aggrieved by a final order issued under subparagraph (A) may
file a petition for review of the order in the United States
Court of Appeals for the circuit in which the violation with
respect to which the order was issued, allegedly occurred or
the circuit in which the complainant resided on the date of
such violation, not later than 60 days after the date of the
issuance of the final order of the Secretary of Labor under
subparagraph (A). Review shall conform to chapter 7 of title
5, United States Code. The commencement of proceedings under
this subparagraph shall not, unless ordered by the court,
operate as a stay of the order. An order of the Secretary of
Labor with respect to which review could have been obtained
under this subparagraph shall not be subject to judicial
review in any criminal or other civil proceeding.
(5) Failure to comply with order.--
(A) Actions by the secretary.--If any person has failed to
comply with a final order issued under paragraph (4), the
Secretary of Labor may file a civil action in the United
States district court for the district in which the violation
was found to have occurred, or in the United States district
court for the District of Columbia, to enforce such order. In
actions brought under this paragraph, the district courts
shall have jurisdiction to grant all appropriate relief
including injunctive relief and compensatory damages.
(B) Civil actions to compel compliance.--A person on whose
behalf an order was issued under paragraph (4) may commence a
civil action against the person to whom such order was issued
to require compliance with such order. The appropriate United
States district court shall have jurisdiction, without regard
to the amount in controversy or the citizenship of the
parties, to enforce such order.
(C) Award of costs authorized.--The court, in issuing any
final order under this paragraph, may award costs of
litigation (including reasonable attorney and expert witness
fees) to any party, whenever the court determines such award
is appropriate.
(D) Mandamus proceedings.--Any nondiscretionary duty
imposed by this section shall be enforceable in a mandamus
proceeding brought under section 1361 of title 28, United
States Code.
(d) Unenforceability of Certain Agreements.--
(1) No waiver of rights and remedies.--Except as provided
under paragraph (3), and notwithstanding any other provision
of law, the rights and remedies provided for in this section
may not be waived by any agreement, policy, form, or
condition of employment, including by any predispute
arbitration agreement.
(2) No predispute arbitration agreements.--Except as
provided under paragraph (3), and notwithstanding any other
provision of law, no predispute arbitration agreement shall
be valid or enforceable to the extent

[[Page S3247]]

that it requires arbitration of a dispute arising under this
section.
(3) Exception.--Notwithstanding paragraphs (1) and (2), an
arbitration provision in a collective bargaining agreement
shall be enforceable as to disputes arising under subsection
(a)(4), unless the Bureau determines, by rule, that such
provision is inconsistent with the purposes of this title.

SEC. 1058. EFFECTIVE DATE.

This subtitle shall become effective on the designated
transfer date.

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

SEC. 1061. TRANSFER OF CONSUMER FINANCIAL PROTECTION
FUNCTIONS.

(a) Defined Terms.--For purposes of this subtitle--
(1) the term ``consumer financial protection functions''
means research, rulemaking, issuance of orders or guidance,
supervision, examination, and enforcement activities, powers,
and duties relating to the offering or provision of consumer
financial products or services; and
(2) the terms ``transferor agency'' and ``transferor
agencies'' mean, respectively--
(A) the Board of Governors (and any Federal reserve bank,
as the context requires), the Federal Deposit Insurance
Corporation, the Federal Trade Commission, the National
Credit Union Administration, the Office of the Comptroller of
the Currency, the Office of Thrift Supervision, and the
Department of Housing and Urban Development, and the heads of
those agencies; and
(B) the agencies listed in subparagraph (A), collectively.
(b) In General.--Except as provided in subsection (c),
consumer financial protection functions are transferred as
follows:
(1) Board of governors.--
(A) Transfer of functions.--All consumer financial
protection functions of the Board of Governors are
transferred to the Bureau.
(B) Board of governors authority.--The Bureau shall have
all powers and duties that were vested in the Board of
Governors, relating to consumer financial protection
functions, on the day before the designated transfer date.
(2) Comptroller of the currency.--
(A) Transfer of functions.--All consumer financial
protection functions of the Comptroller of the Currency are
transferred to the Bureau.
(B) Comptroller authority.--The Bureau shall have all
powers and duties that were vested in the Comptroller of the
Currency, relating to consumer financial protection
functions, on the day before the designated transfer date.
(3) Director of the office of thrift supervision.--
(A) Transfer of functions.--All consumer financial
protection functions of the Director of the Office of Thrift
Supervision are transferred to the Bureau.
(B) Director authority.--The Bureau shall have all powers
and duties that were vested in the Director of the Office of
Thrift Supervision, relating to consumer financial protection
functions, on the day before the designated transfer date.
(4) Federal deposit insurance corporation.--
(A) Transfer of functions.--All consumer financial
protection functions of the Federal Deposit Insurance
Corporation are transferred to the Bureau.
(B) Corporation authority.--The Bureau shall have all
powers and duties that were vested in the Federal Deposit
Insurance Corporation, relating to consumer financial
protection functions, on the day before the designated
transfer date.
(5) Federal trade commission.--
(A) Transfer of functions.--Except as provided in
subparagraph (C), all consumer financial protection functions
of the Federal Trade Commission are transferred to the
Bureau.
(B) Commission authority.--Except as provided in
subparagraph (C), the Bureau shall have all powers and duties
that were vested in the Federal Trade Commission relating to
consumer financial protection functions on the day before the
designated transfer date.
(C) Continuation of certain commission authorities.--
Notwithstanding subparagraphs (A) and (B), the Federal Trade
Commission shall continue to have authority to enforce, and
issue rules with respect to--
(i) the Credit Repair Organizations Act (15 U.S.C. 1679 et
seq.);
(ii) section 5 of the Federal Trade Commission Act (15
U.S.C. 45); and
(iii) the Telemarketing and Consumer Fraud and Abuse
Prevention Act (15 U.S.C. 6101 et seq.).
(6) National credit union administration.--
(A) Transfer of functions.--All consumer financial
protection functions of the National Credit Union
Administration are transferred to the Bureau.
(B) National credit union administration authority.--The
Bureau shall have all powers and duties that were vested in
the National Credit Union Administration, relating to
consumer financial protection functions, on the day before
the designated transfer date.
(7) Department of housing and urban development.--
(A) Transfer of functions.--All consumer protection
functions of the Secretary of the Department of Housing and
Urban Development relating to the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2601 et seq.) and the
Secure and Fair Enforcement for Mortgage Licensing Act of
2008 (12 U.S.C. 5102 et seq.) are transferred to the Bureau.
(B) Authority of the department of housing and urban
development.--The Bureau shall have all powers and duties
that were vested in the Secretary of the Department of
Housing and Urban Development relating to the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.),
and the Secure and Fair Enforcement for Mortgage Licensing
Act of 2008 (12 U.S.C. 5101 et seq.), on the day before the
designated transfer date.
(c) Transfers of Functions Subject to Examination and
Enforcement Authority Remaining With Transferor Agencies.--
The transfers of functions in subsection (b) do not affect
the authority of the agencies identified in subsection (b)
from conducting examinations or initiating and maintaining
enforcement proceedings, including performing appropriate
supervisory and support functions relating thereto, in
accordance with sections 1024, 1025, and 1026.
(d) Effective Date.--Subsections (b) and (c) shall become
effective on the designated transfer date.

SEC. 1062. DESIGNATED TRANSFER DATE.

(a) In General.--Not later than 60 days after the date of
enactment of this Act, the Secretary shall--
(1) in consultation with the Chairman of the Board of
Governors, the Chairperson of the Corporation, the Chairman
of the Federal Trade Commission, the Chairman of the National
Credit Union Administration Board, the Comptroller of the
Currency, the Director of the Office of Thrift Supervision,
the Secretary of the Department of Housing and Urban
Development, and the Director of the Office of Management and
Budget, designate a single calendar date for the transfer of
functions to the Bureau under section 1061; and
(2) publish notice of that designated date in the Federal
Register.
(b) Changing Designation.--The Secretary--
(1) may, in consultation with the Chairman of the Board of
Governors, the Chairperson of the Federal Deposit Insurance
Corporation, the Chairman of the Federal Trade Commission,
the Chairman of the National Credit Union Administration
Board, the Comptroller of the Currency, the Director of the
Office of Thrift Supervision, the Secretary of the Department
of Housing and Urban Development, and the Director of the
Office of Management and Budget, change the date designated
under subsection (a); and
(2) shall publish notice of any changed designated date in
the Federal Register.
(c) Permissible Dates.--
(1) In general.--Except as provided in paragraph (2), any
date designated under this section shall be not earlier than
180 days, nor later than 18 months, after the date of
enactment of this Act.
(2) Extension of time.--The Secretary may designate a date
that is later than 18 months after the date of enactment of
this Act if the Secretary transmits to appropriate committees
of Congress--
(A) a written determination that orderly implementation of
this title is not feasible before the date that is 18 months
after the date of enactment of this Act;
(B) an explanation of why an extension is necessary for the
orderly implementation of this title; and
(C) a description of the steps that will be taken to effect
an orderly and timely implementation of this title within the
extended time period.
(3) Extension limited.--In no case may any date designated
under this section be later than 24 months after the date of
enactment of this Act.

SEC. 1063. SAVINGS PROVISIONS.

(a) Board of Governors.--
(1) Existing rights, duties, and obligations not
affected.--Section 1061(b)(1) does not affect the validity of
any right, duty, or obligation of the United States, the
Board of Governors (or any Federal reserve bank), or any
other person that--
(A) arises under any provision of law relating to any
consumer financial protection function of the Board of
Governors transferred to the Bureau by this title; and
(B) existed on the day before the designated transfer date.
(2) Continuation of suits.--No provision of this Act shall
abate any proceeding commenced by or against the Board of
Governors (or any Federal reserve bank) before the designated
transfer date with respect to any consumer financial
protection function of the Board of Governors (or any Federal
reserve bank) transferred to the Bureau by this title, except
that the Bureau, subject to sections 1024, 1025, and 1026,
shall be substituted for the Board of Governors (or Federal
reserve bank) as a party to any such proceeding as of the
designated transfer date.
(b) Federal Deposit Insurance Corporation.--
(1) Existing rights, duties, and obligations not
affected.--Section 1061(b)(4) does not affect the validity of
any right, duty, or obligation of the United States, the
Federal Deposit Insurance Corporation, the Board of Directors
of that Corporation, or any other person, that--
(A) arises under any provision of law relating to any
consumer financial protection function of the Federal Deposit
Insurance Corporation transferred to the Bureau by this
title; and
(B) existed on the day before the designated transfer date.

[[Page S3248]]

(2) Continuation of suits.--No provision of this Act shall
abate any proceeding commenced by or against the Federal
Deposit Insurance Corporation (or the Board of Directors of
that Corporation) before the designated transfer date with
respect to any consumer financial protection function of the
Federal Deposit Insurance Corporation transferred to the
Bureau by this title, except that the Bureau, subject to
sections 1024, 1025, and 1026, shall be substituted for the
Federal Deposit Insurance Corporation (or Board of Directors)
as a party to any such proceeding as of the designated
transfer date.
(c) Federal Trade Commission.--
(1) Existing rights, duties, and obligations not
affected.--Section 1061(b)(5) does not affect the validity of
any right, duty, or obligation of the United States, the
Federal Trade Commission, or any other person, that--
(A) arises under any provision of law relating to any
consumer financial protection function of the Federal Trade
Commission transferred to the Bureau by this title; and
(B) existed on the day before the designated transfer date.
(2) Continuation of suits.--No provision of this Act shall
abate any proceeding commenced by or against the Federal
Trade Commission before the designated transfer date with
respect to any consumer financial protection function of the
Federal Trade Commission transferred to the Bureau by this
title, except that the Bureau, subject to sections 1024,
1025, and 1026, shall be substituted for the Federal Trade
Commission as a party to any such proceeding as of the
designated transfer date.
(d) National Credit Union Administration.--
(1) Existing rights, duties, and obligations not
affected.--Section 1061(b)(6) does not affect the validity of
any right, duty, or obligation of the United States, the
National Credit Union Administration, the National Credit
Union Administration Board, or any other person, that--
(A) arises under any provision of law relating to any
consumer financial protection function of the National Credit
Union Administration transferred to the Bureau by this title;
and
(B) existed on the day before the designated transfer date.
(2) Continuation of suits.--No provision of this Act shall
abate any proceeding commenced by or against the National
Credit Union Administration (or the National Credit Union
Administration Board) before the designated transfer date
with respect to any consumer financial protection function of
the National Credit Union Administration transferred to the
Bureau by this title, except that the Bureau, subject to
sections 1024, 1025, and 1026, shall be substituted for the
National Credit Union Administration (or National Credit
Union Administration Board) as a party to any such proceeding
as of the designated transfer date.
(e) Office of the Comptroller of the Currency.--
(1) Existing rights, duties, and obligations not
affected.--Section 1061(b)(2) does not affect the validity of
any right, duty, or obligation of the United States, the
Comptroller of the Currency, the Office of the Comptroller of
the Currency, or any other person, that--
(A) arises under any provision of law relating to any
consumer financial protection function of the Comptroller of
the Currency transferred to the Bureau by this title; and
(B) existed on the day before the designated transfer date.
(2) Continuation of suits.--No provision of this Act shall
abate any proceeding commenced by or against the Comptroller
of the Currency (or the Office of the Comptroller of the
Currency) with respect to any consumer financial protection
function of the Comptroller of the Currency transferred to
the Bureau by this title before the designated transfer date,
except that the Bureau, subject to sections 1024, 1025, and
1026, shall be substituted for the Comptroller of the
Currency (or the Office of the Comptroller of the Currency)
as a party to any such proceeding as of the designated
transfer date.
(f) Office of Thrift Supervision.--
(1) Existing rights, duties, and obligations not
affected.--Section 1061(b)(3) does not affect the validity of
any right, duty, or obligation of the United States, the
Director of the Office of Thrift Supervision, the Office of
Thrift Supervision, or any other person, that--
(A) arises under any provision of law relating to any
consumer financial protection function of the Director of the
Office of Thrift Supervision transferred to the Bureau by
this title; and
(B) that existed on the day before the designated transfer
date.
(2) Continuation of suits.--No provision of this Act shall
abate any proceeding commenced by or against the Director of
the Office of Thrift Supervision (or the Office of Thrift
Supervision) with respect to any consumer financial
protection function of the Director of the Office of Thrift
Supervision transferred to the Bureau by this title before
the designated transfer date, except that the Bureau, subject
to sections 1024, 1025, and 1026, shall be substituted for
the Director (or the Office of Thrift Supervision) as a party
to any such proceeding as of the designated transfer date.
(g) Department of Housing and Urban Development.--
(1) Existing rights, duties, and obligations not
affected.--Section 1061(b)(7) shall not affect the validity
of any right, duty, or obligation of the United States, the
Secretary of the Department of Housing and Urban Development
(or the Department of Housing and Urban Development), or any
other person, that--
(A) arises under any provision of law relating to any
function of the Secretary of the Department of Housing and
Urban Development with respect to the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2601 et seq.) or the Secure
and Fair Enforcement for Mortgage Licensing Act of 2008 (12
U.S.C. 5102 et seq.) transferred to the Bureau by this title;
and
(B) existed on the day before the designated transfer date.
(2) Continuation of suits.--This title shall not abate any
proceeding commenced by or against the Secretary of the
Department of Housing and Urban Development (or the
Department of Housing and Urban Development) with respect to
any consumer financial protection function of the Secretary
of the Department of Housing and Urban Development
transferred to the Bureau by this title before the designated
transfer date, except that the Bureau, subject to sections
1024, 1025, and 1026, shall be substituted for the Secretary
of the Department of Housing and Urban Development (or the
Department of Housing and Urban Development) as a party to
any such proceeding as of the designated transfer date.
(h) Continuation of Existing Orders, Rules, Determinations,
Agreements, and Resolutions.--All orders, resolutions,
determinations, agreements, and rules that have been issued,
made, prescribed, or allowed to become effective by any
transferor agency or by a court of competent jurisdiction, in
the performance of consumer financial protection functions
that are transferred by this title and that are in effect on
the day before the designated transfer date, shall continue
in effect according to the terms of those orders,
resolutions, determinations, agreements, and rules, and shall
not be enforceable by or against the Bureau.
(i) Identification of Rules Continued.--Not later than the
designated transfer date, the Bureau--
(1) shall, after consultation with the head of each
transferor agency, identify the rules continued under
subsection (h) that will be enforced by the Bureau; and
(2) shall publish a list of such rules in the Federal
Register.
(j) Status of Rules Proposed or Not Yet Effective.--
(1) Proposed rules.--Any proposed rule of a transferor
agency which that agency, in performing consumer financial
protection functions transferred by this title, has proposed
before the designated transfer date, but has not been
published as a final rule before that date, shall be deemed
to be a proposed rule of the Bureau.
(2) Rules not yet effective.--Any interim or final rule of
a transferor agency which that agency, in performing consumer
financial protection functions transferred by this title, has
published before the designated transfer date, but which has
not become effective before that date, shall become effective
as a rule of the Bureau according to its terms.

SEC. 1064. TRANSFER OF CERTAIN PERSONNEL.

(a) In General.--
(1) Certain federal reserve system employees transferred.--
(A) Identifying employees for transfer.--The Bureau and the
Board of Governors shall--
(i) jointly determine the number of employees of the Board
of Governors necessary to perform or support the consumer
financial protection functions of the Board of Governors that
are transferred to the Bureau by this title; and
(ii) consistent with the number determined under clause
(i), jointly identify employees of the Board of Governors for
transfer to the Bureau, in a manner that the Bureau and the
Board of Governors, in their sole discretion, determine
equitable.
(B) Identified employees transferred.--All employees of the
Board of Governors identified under subparagraph (A)(ii)
shall be transferred to the Bureau for employment.
(C) Federal reserve bank employees.--Employees of any
Federal reserve bank who, on the day before the designated
transfer date, are performing consumer financial protection
functions on behalf of the Board of Governors shall be
treated as employees of the Board of Governors for purposes
of subparagraphs (A) and (B).
(2) Certain fdic employees transferred.--
(A) Identifying employees for transfer.--The Bureau and the
Board of Directors of the Federal Deposit Insurance
Corporation shall--
(i) jointly determine the number of employees of that
Corporation necessary to perform or support the consumer
financial protection functions of the Corporation that are
transferred to the Bureau by this title; and
(ii) consistent with the number determined under clause
(i), jointly identify employees of the Corporation for
transfer to the Bureau, in a manner that the Bureau and the
Board of Directors of the Corporation, in their sole
discretion, determine equitable.
(B) Identified employees transferred.--All employees of the
Corporation identified under subparagraph (A)(ii) shall be
transferred to the Bureau for employment.
(3) Certain ncua employees transferred.--

[[Page S3249]]

(A) Identifying employees for transfer.--The Bureau and the
National Credit Union Administration Board shall--
(i) jointly determine the number of employees of the
National Credit Union Administration necessary to perform or
support the consumer financial protection functions of the
National Credit Union Administration that are transferred to
the Bureau by this title; and
(ii) consistent with the number determined under clause
(i), jointly identify employees of the National Credit Union
Administration for transfer to the Bureau, in a manner that
the Bureau and the National Credit Union Administration
Board, in their sole discretion, determine equitable.
(B) Identified employees transferred.--All employees of the
National Credit Union Administration identified under
subparagraph (A)(ii) shall be transferred to the Bureau for
employment.
(4) Certain office of the comptroller of the currency
employees transferred.--
(A) Identifying employees for transfer.--The Bureau and the
Comptroller of the Currency shall--
(i) jointly determine the number of employees of the Office
of the Comptroller of the Currency necessary to perform or
support the consumer financial protection functions of the
Office of the Comptroller of the Currency that are
transferred to the Bureau by this title; and
(ii) consistent with the number determined under clause
(i), jointly identify employees of the Office of the
Comptroller of the Currency for transfer to the Bureau, in a
manner that the Bureau and the Office of the Comptroller of
the Currency, in their sole discretion, determine equitable.
(B) Identified employees transferred.--All employees of the
Office of the Comptroller of the Currency identified under
subparagraph (A)(ii) shall be transferred to the Bureau for
employment.
(5) Certain office of thrift supervision employees
transferred.--
(A) Identifying employees for transfer.--The Bureau and the
Director of the Office of Thrift Supervision shall--
(i) jointly determine the number of employees of the Office
of Thrift Supervision necessary to perform or support the
consumer financial protection functions of the Office of
Thrift Supervision that are transferred to the Bureau by this
title; and
(ii) consistent with the number determined under clause
(i), jointly identify employees of the Office of Thrift
Supervision for transfer to the Bureau, in a manner that the
Bureau and the Office of Thrift Supervision, in their sole
discretion, determine equitable.
(B) Identified employees transferred.--All employees of the
Office of Thrift Supervision identified under subparagraph
(A)(ii) shall be transferred to the Bureau for employment.
(6) Certain employees of department of housing and urban
development transferred.--
(A) Identifying employees for transfer.--The Bureau and the
Secretary of the Department of Housing and Urban Development
shall--
(i) jointly determine the number of employees of the
Department of Housing and Urban Development necessary to
perform or support the consumer protection functions of the
Department that are transferred to the Bureau by this title;
and
(ii) consistent with the number determined under clause
(i), jointly identify employees of the Department of Housing
and Urban Development for transfer to the Bureau in a manner
that the Bureau and the Secretary of the Department of
Housing and Urban Development, in their sole discretion, deem
equitable.
(B) Identified employees transferred.--All employees of the
Department of Housing and Urban Development identified under
subparagraph (A)(ii) shall be transferred to the Bureau for
employment.
(7) Appointment authority for excepted service and senior
executive service transferred.--
(A) In general.--In the case of an employee occupying a
position in the excepted service or the Senior Executive
Service, any appointment authority established pursuant to
law or regulations of the Office of Personnel Management for
filling such positions shall be transferred, subject to
subparagraph (B).
(B) Declining transfers allowed.--An agency or entity may
decline to make a transfer of authority under subparagraph
(A) (and the employees appointed pursuant thereto) to the
extent that such authority relates to positions excepted from
the competitive service because of their confidential,
policy-making, policy-determining, or policy-advocating
character, and non-career positions in the Senior Executive
Service (within the meaning of section 3132(a)(7) of title 5,
United States Code).
(b) Timing of Transfers and Position Assignments.--Each
employee to be transferred under this section shall--
(1) be transferred not later than 90 days after the
designated transfer date; and
(2) receive notice of a position assignment not later than
120 days after the effective date of his or her transfer.
(c) Transfer of Function.--
(1) In general.--Notwithstanding any other provision of
law, the transfer of employees shall be deemed a transfer of
functions for the purpose of section 3503 of title 5, United
States Code.
(2) Priority of this title.--If any provisions of this
title conflict with any protection provided to transferred
employees under section 3503 of title 5, United States Code,
the provisions of this title shall control.
(d) Equal Status and Tenure Positions.--
(1) Employees transferred from fdic, ftc, hud, ncua, occ,
and ots.--Each employee transferred from the Federal Deposit
Insurance Corporation, the Federal Trade Commission, the
National Credit Union Administration, the Office of the
Comptroller of the Currency, the Office of Thrift
Supervision, or the Department of Housing and Urban
Development shall be placed in a position at the Bureau with
the same status and tenure as that employee held on the day
before the designated transfer date.
(2) Employees transferred from the federal reserve
system.--
(A) Comparability.--Each employee transferred from the
Board of Governors or from a Federal reserve bank shall be
placed in a position with the same status and tenure as that
of an employee transferring to the Bureau from the Office of
the Comptroller of the Currency who perform similar functions
and have similar periods of service.
(B) Service periods credited.--For purposes of this
paragraph, periods of service with the Board of Governors or
a Federal reserve bank shall be credited as periods of
service with a Federal agency.
(e) Additional Certification Requirements Limited.--
Examiners transferred to the Bureau are not subject to any
additional certification requirements before being placed in
a comparable examiner position at the Bureau examining the
same types of institutions as they examined before they were
transferred.
(f) Personnel Actions Limited.--
(1) 2-Year protection.--Except as provided in paragraph
(2), each transferred employee holding a permanent position
on the day before the designated transfer date may not,
during the 2-year period beginning on the designated transfer
date, be involuntarily separated, or involuntarily reassigned
outside his or her locality pay area, as defined by the
Office of Personnel Management.
(2) Exceptions.--Paragraph (1) does not limit the right of
the Bureau--
(A) to separate an employee for cause or for unacceptable
performance;
(B) to terminate an appointment to a position excepted from
the competitive service because of its confidential policy-
making, policy-determining, or policy-advocating character;
or
(C) to reassign a supervisory employee outside his or her
locality pay area, as defined by the Office of Personnel
Management, when the Bureau determines that the reassignment
is necessary for the efficient operation of the Bureau.
(g) Pay.--
(1) 2-Year protection.--Except as provided in paragraph
(2), each transferred employee shall, during the 2-year
period beginning on the designated transfer date, receive pay
at a rate equal to not less than the basic rate of pay
(including any geographic differential) that the employee
received during the pay period immediately preceding the date
of transfer.
(2) Exceptions.--Paragraph (1) does not limit the right of
the Bureau to reduce the rate of basic pay of a transferred
employee--
(A) for cause;
(B) for unacceptable performance; or
(C) with the consent of the employee.
(3) Protection only while employed.--Paragraph (1) applies
to a transferred employee only while that employee remains
employed by the Bureau.
(4) Pay increases permitted.--Paragraph (1) does not limit
the authority of the Bureau to increase the pay of a
transferred employee.
(h) Reorganization.--
(1) Between 1st and 3rd year.--
(A) In general.--If the Bureau determines, during the 2-
year period beginning 1 year after the designated transfer
date, that a reorganization of the staff of the Bureau is
required--
(i) that reorganization shall be deemed a ``major
reorganization'' for purposes of affording affected employees
retirement under section 8336(d)(2) or 8414(b)(1)(B) of title
5, United States Code;
(ii) before the reorganization occurs, all employees in the
same locality pay area as defined by the Office of Personnel
Management shall be placed in a uniform position
classification system; and
(iii) any resulting reduction in force shall be governed by
the provisions of chapter 35 of title 5, United States Code,
except that the Bureau shall--

(I) establish competitive areas (as that term is defined in
regulations issued by the Office of Personnel Management) to
include at a minimum all employees in the same locality pay
area as defined by the Office of Personnel Management;
(II) establish competitive levels (as that term is defined
in regulations issued by the Office of Personnel Management)
without regard to whether the particular employees have been
appointed to positions in the competitive service or the
excepted service; and
(III) afford employees appointed to positions in the
excepted service (other than to a position excepted from the
competitive service because of its confidential policy-
making, policy-determining, or policy-advocating character)
the same assignment rights to positions within the Bureau as
employees appointed to positions in the competitive service.

[[Page S3250]]

(B) Service credit for reductions in force.--For purposes
of this paragraph, periods of service with a Federal home
loan bank, a joint office of the Federal home loan banks, the
Board of Governors, a Federal reserve bank, the Federal
Deposit Insurance Corporation, or the National Credit Union
Administration shall be credited as periods of service with a
Federal agency.
(2) After 3rd year.--
(A) In general.--If the Bureau determines, at any time
after the 3-year period beginning on the designated transfer
date, that a reorganization of the staff of the Bureau is
required, any resulting reduction in force shall be governed
by the provisions of chapter 35 of title 5, United States
Code, except that the Bureau shall establish competitive
levels (as that term is defined in regulations issued by the
Office of Personnel Management) without regard to types of
appointment held by particular employees transferred under
this section.
(B) Service credit for reductions in force.--For purposes
of this paragraph, periods of service with a Federal home
loan bank, a joint office of the Federal home loan banks, the
Board of Governors, a Federal reserve bank, the Federal
Deposit Insurance Corporation, or the National Credit Union
Administration shall be credited as periods of service with a
Federal agency.
(i) Benefits.--
(1) Retirement benefits for transferred employees.--
(A) In general.--
(i) Continuation of existing retirement plan.--Except as
provided in subparagraph (B), each transferred employee shall
remain enrolled in his or her existing retirement plan,
through any period of continuous employment with the Bureau.
(ii) Employer contribution.--The Bureau shall pay any
employer contributions to the existing retirement plan of
each transferred employee, as required under that plan.
(B) Option for employees transferred from federal reserve
system to be subject to federal employee retirement
program.--
(i) Election.--Any transferred employee who was enrolled in
a Federal Reserve System retirement plan on the day before
his or her transfer to the Bureau may, during the 1-year
period beginning 6 months after the designated transfer date,
elect to be subject to the Federal employee retirement
program.
(ii) Effective date of coverage.--For any employee making
an election under clause (i), coverage by the Federal
employee retirement program shall begin 1 year after the
designated transfer date.
(C) Bureau participation in federal reserve system
retirement plan.--
(i) Separate account in federal reserve system retirement
plan established.--Notwithstanding any other provision of
law, and subject to the terms and conditions of this section,
a separate account in the Federal Reserve System retirement
plan shall be established for Bureau employees who do not
make the election under subparagraph (B).
(ii) Funds attributable to transferred employees remaining
in federal reserve system retirement plan transferred.--The
proportionate share of funds in the Federal Reserve System
retirement plan, including the proportionate share of any
funding surplus in that plan, attributable to a transferred
employee who does not make the election under subparagraph
(B), shall be transferred to the account established under
clause (i).
(iii) Employer contributions deposited.--The Bureau shall
deposit into the account established under clause (i) the
employer contributions that the Bureau makes on behalf of
employees who do not make the election under subparagraph
(B).
(iv) Account administration.--The Bureau shall administer
the account established under clause (i) as a participating
employer in the Federal Reserve System retirement plan.
(D) Definitions.--For purposes of this paragraph--
(i) the term ``existing retirement plan'' means, with
respect to any employee transferred under this section, the
particular retirement plan (including the Financial
Institutions Retirement Fund) and any associated thrift
savings plan of the agency or Federal reserve bank from which
the employee was transferred, in which the employee was
enrolled on the day before the designated transfer date; and
(ii) the term ``Federal employee retirement program'' means
the retirement program for Federal employees established by
chapter 84 of title 5, United States Code.
(2) Benefits other than retirement benefits for transferred
employees.--
(A) During 1st year.--
(i) Existing plans continue.--Each transferred employee
may, for 1 year after the designated transfer date, retain
membership in any other employee benefit program of the
agency or bank from which the employee transferred, including
a dental, vision, long term care, or life insurance program,
to which the employee belonged on the day before the
designated transfer date.
(ii) Employer contribution.--The Bureau shall reimburse the
agency or bank from which an employee was transferred for any
cost incurred by that agency or bank in continuing to extend
coverage in the benefit program to the employee, as required
under that program or negotiated agreements.
(B) Dental, vision, or life insurance after 1st year.--If,
after the 1-year period beginning on the designated transfer
date, the Bureau decides not to continue participation in any
dental, vision, or life insurance program of an agency or
bank from which an employee transferred, a transferred
employee who is a member of such a program may, before the
decision of the Bureau takes effect, elect to enroll, without
regard to any regularly scheduled open season, in--
(i) the enhanced dental benefits established by chapter 89A
of title 5, United States Code;
(ii) the enhanced vision benefits established by chapter
89B of title 5, United States Code; or
(iii) the Federal Employees Group Life Insurance Program
established by chapter 87 of title 5, United States Code,
without regard to any requirement of insurability.
(C) Long term care insurance after 1st year.--If, after the
1-year period beginning on the designated transfer date, the
Bureau decides not to continue participation in any long term
care insurance program of an agency or bank from which an
employee transferred, a transferred employee who is a member
of such a program may, before the decision of the Bureau
takes effect, elect to apply for coverage under the Federal
Long Term Care Insurance Program established by chapter 90 of
title 5, United States Code, under the underwriting
requirements applicable to a new active workforce member (as
defined in part 875, title 5, Code of Federal Regulations).
(D) Employee contribution.--An individual enrolled in the
Federal Employees Health Benefits program shall pay any
employee contribution required by the plan.
(E) Additional funding.--The Bureau shall transfer to the
Federal Employees Health Benefits Fund established under
section 8909 of title 5, United States Code, an amount
determined by the Director of the Office of Personnel
Management, after consultation with the Bureau and the Office
of Management and Budget, to be necessary to reimburse the
Fund for the cost to the Fund of providing benefits under
this paragraph.
(F) Credit for time enrolled in other plans.--For employees
transferred under this title, enrollment in a health benefits
plan administered by a transferor agency or a Federal reserve
bank, as the case may be, immediately before enrollment in a
health benefits plan under chapter 89 of title 5, United
States Code, shall be considered as enrollment in a health
benefits plan under that chapter for purposes of section
8905(b)(1)(A) of title 5, United States Code.
(G) Special provisions to ensure continuation of life
insurance benefits.--
(i) In general.--An annuitant (as defined in section
8901(3) of title 5, United States Code) who is enrolled in a
life insurance plan administered by a transferor agency on
the day before the designated transfer date shall be eligible
for coverage by a life insurance plan under sections 8706(b),
8714a, 8714b, and 8714c of title 5, United States Code, or in
a life insurance plan established by the Bureau, without
regard to any regularly scheduled open season and requirement
of insurability.
(ii) Employee contribution.--An individual enrolled in a
life insurance plan under this subparagraph shall pay any
employee contribution required by the plan.
(iii) Additional funding.--The Bureau shall transfer to the
Employees' Life Insurance Fund established under section 8714
of title 5, United States Code, an amount determined by the
Director of the Office of Personnel Management, after
consultation with the Bureau and the Office of Management and
Budget, to be necessary to reimburse the Fund for the cost to
the Fund of providing benefits under this subparagraph not
otherwise paid for by the employee under clause (ii).
(iv) Credit for time enrolled in other plans.--For
employees transferred under this title, enrollment in a life
insurance plan administered by a transferor agency
immediately before enrollment in a life insurance plan under
chapter 87 of title 5, United States Code, shall be
considered as enrollment in a life insurance plan under that
chapter for purposes of section 8706(b)(1)(A) of title 5,
United States Code.
(3) OPM rules.--The Office of Personnel Management shall
issue such rules as are necessary to carry out this
subsection.
(j) Implementation of Uniform Pay and Classification
System.--Not later than 2 years after the designated transfer
date, the Bureau shall implement a uniform pay and
classification system for all employees transferred under
this title.
(k) Equitable Treatment.--In administering the provisions
of this section, the Bureau--
(1) shall take no action that would unfairly disadvantage
transferred employees relative to each other based on their
prior employment by the Board of Governors, the Federal
Deposit Insurance Corporation, the Federal Trade Commission,
the National Credit Union Administration, the Office of the
Comptroller of the Currency, the Office of Thrift
Supervision, a Federal reserve bank, a Federal home loan
bank, or a joint office of the Federal home loan banks; and
(2) may take such action as is appropriate in individual
cases so that employees transferred under this section
receive equitable treatment, with respect to the status,
tenure, pay, benefits (other than benefits under programs
administered by the Office of Personnel Management), and
accrued leave or vacation time of those employees, for prior
periods of service with any Federal agency,

[[Page S3251]]

including the Board of Governors, the Corporation, the
Federal Trade Commission, the National Credit Union
Administration, the Office of the Comptroller of the
Currency, the Office of Thrift Supervision, a Federal reserve
bank, a Federal home loan bank, or a joint office of the
Federal home loan banks.
(l) Implementation.--In implementing the provisions of this
section, the Bureau shall coordinate with the Office of
Personnel Management and other entities having expertise in
matters related to employment to ensure a fair and orderly
transition for affected employees.

SEC. 1065. INCIDENTAL TRANSFERS.

(a) Incidental Transfers Authorized.--The Director of the
Office of Management and Budget, in consultation with the
Secretary, shall make such additional incidental transfers
and dispositions of assets and liabilities held, used,
arising from, available, or to be made available, in
connection with the functions transferred by this title, as
the Director may determine necessary to accomplish the
purposes of this title.
(b) Sunset.--The authority provided in this section shall
terminate 5 years after the date of enactment of this Act.

SEC. 1066. INTERIM AUTHORITY OF THE SECRETARY.

(a) In General.--The Secretary is authorized to perform the
functions of the Bureau under this subtitle until the
Director of the Bureau is confirmed by the Senate in
accordance with section 1011.
(b) Interim Administrative Services by the Department of
the Treasury.--The Department of the Treasury may provide
administrative services necessary to support the Bureau
before the designated transfer date.

SEC. 1067. TRANSITION OVERSIGHT.

(a) Purpose.--The purpose of this section is to ensure that
the Bureau--
(1) has an orderly and organized startup;
(2) attracts and retains a qualified workforce; and
(3) establishes comprehensive employee training and
benefits programs.
(b) Reporting Requirement.--
(1) In general.--The Bureau shall submit an annual report
to the Committee on Banking, Housing, and Urban Affairs of
the Senate and the Committee on Financial Services of the
House of Representatives that includes the plans described in
paragraph (2).
(2) Plans.--The plans described in this paragraph are as
follows:
(A) Training and workforce development plan.--The Bureau
shall submit a training and workforce development plan that
includes, to the extent practicable--
(i) identification of skill and technical expertise needs
and actions taken to meet those requirements;
(ii) steps taken to foster innovation and creativity;
(iii) leadership development and succession planning; and
(iv) effective use of technology by employees.
(B) Workplace flexibilities plan.--The Bureau shall submit
a workforce flexibility plan that includes, to the extent
practicable--
(i) telework;
(ii) flexible work schedules;
(iii) phased retirement;
(iv) reemployed annuitants;
(v) part-time work;
(vi) job sharing;
(vii) parental leave benefits and childcare assistance;
(viii) domestic partner benefits;
(ix) other workplace flexibilities; or
(x) any combination of the items described in clauses (i)
through (ix).
(C) Recruitment and retention plan.--The Bureau shall
submit a recruitment and retention plan that includes, to the
extent practicable, provisions relating to--
(i) the steps necessary to target highly qualified
applicant pools with diverse backgrounds;
(ii) streamlined employment application processes;
(iii) the provision of timely notification of the status of
employment applications to applicants; and
(iv) the collection of information to measure indicators of
hiring effectiveness.
(c) Expiration.--The reporting requirement under subsection
(b) shall terminate 5 years after the date of enactment of
this Act.
(d) Rule of Construction.--Nothing in this section may be
construed to affect--
(1) a collective bargaining agreement, as that term is
defined in section 7103(a)(8) of title 5, United States Code,
that is in effect on the date of enactment of this Act; or
(2) the rights of employees under chapter 71 of title 5,
United States Code.

Subtitle G--Regulatory Improvements

SEC. 1071. GAO STUDY ON THE EFFECTIVENESS AND IMPACT OF
VARIOUS APPRAISAL METHODS.

(a) In General.--The Government Accountability Office shall
conduct a study on the effectiveness and impact of various
appraisal methods, including the cost approach, the
comparative sales approach, the income approach, and others
that may be available.
(b) Study.--Not later than--
(1) 1 year after the date of enactment of this Act, the
Government Accountability Office shall submit a study to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives;
(2) 90 days after the date of enactment of this Act, the
Government Accountability Office shall provide a report on
the status of the study and any preliminary findings to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives.
(c) Content of Study.--The study required by this section
shall include an examination of--
(1) the prevalence, alone or in combination, of these
approaches in purchase-money and refinance mortgage
transactions;
(2) the accuracy of the various approaches in assessing the
property as collateral;
(3) whether and how the approaches contributed to price
speculation in the previous cycle;
(4) the costs to consumers of these approaches;
(5) the disclosure of fees to consumers in the appraisal
process;
(6) to what extent such approaches may be influenced by a
conflict of interest between the mortgage lender and the
appraiser and the mechanism by which the lender selects and
compensates the appraiser; and
(7) the suitability of appraisal approaches in rural versus
urban areas.

SEC. 1072. PROHIBITION ON CERTAIN PREPAYMENT PENALTIES.

(a) In General.--Chapter 2 of the Truth in Lending Act (15
U.S.C. 1631 et seq.) is amended by inserting after section
129A (15 U.S.C. 1639a) the following new section:

``SEC. 129B. PROHIBITION ON CERTAIN PREPAYMENT PENALTIES.

``(a) Prohibited on Certain Loans.--A residential mortgage
loan that is not a qualified mortgage may not contain terms
under which a consumer is required to pay a prepayment
penalty for paying all or part of the principal after the
loan is consummated.
``(b) Phased-Out Penalties on Qualified Mortgages.--
``(1) In general.--A qualified mortgage may not contain
terms under which a consumer is required to pay a prepayment
penalty for paying all or part of the principal after the
loan is consummated in excess of--
``(A) during the 1-year period beginning on the date on
which the loan is consummated, an amount equal to 3 percent
of the outstanding balance on the loan;
``(B) during the 1-year period beginning immediately after
the end of the period described in subparagraph (A), an
amount equal to 2 percent of the outstanding balance on the
loan; and
``(C) during the 1-year period beginning immediately after
the end of the 1-year period described in subparagraph (B),
an amount equal to 1 percent of the outstanding balance on
the loan.
``(2) Prohibition.--After the end of the 3-year period
beginning on the date on which the loan is consummated, no
prepayment penalty may be imposed on a qualified mortgage.
``(c) Option for No Prepayment Penalty Required.--A
creditor may not offer a consumer a residential mortgage loan
product that has a prepayment penalty for paying all or part
of the principal after the loan is consummated as a term of
the loan, without offering to the consumer a residential
mortgage loan product that does not have a prepayment penalty
as a term of the loan.
``(d) Prohibitions on Evasions, Structuring of
Transactions, and Reciprocal Arrangements.--A creditor may
not take any action in connection with a residential mortgage
loan--
``(1) to structure a loan transaction as an open end
consumer credit plan or another form of loan for the purpose
and with the intent of evading the provisions of this
section; or
``(2) to divide any loan transaction into separate parts
for the purpose and with the intent of evading provisions of
this section.
``(e) Publication of Average Prime Offer Rate and APR
Thresholds.--The Board--
``(1) shall publish, and update at least weekly, average
prime offer rates;
``(2) may publish multiple rates based on varying types of
mortgage transactions; and
``(3) shall adjust the thresholds of 1.50 percentage points
in subsection (g)(3)(A)(v)(I), 2.50 percentage points in
subsection (g)(3)(A)(v)(II), and 3.50 percentage points in
subsection (g)(3)(A)(v)(III), as necessary to reflect
significant changes in market conditions and to effectuate
the purposes of this section.
``(f) Regulations.--
``(1) In general.--The Bureau shall prescribe regulations
to carry out this section.
``(2) Revision of safe harbor criteria.--The Bureau may
prescribe regulations that revise, add to, or subtract from
the criteria that define a qualified mortgage, upon a finding
that such regulations are necessary or appropriate--
``(A) to ensure that responsible, affordable mortgage
credit remains available to consumers in a manner consistent
with the purposes of this section;
``(B) to effectuate the purposes of this section;
``(C) to prevent circumvention or evasion thereof; or
``(D) to facilitate compliance with this section.
``(3) Interagency harmonization.--
``(A) Determination of qualifying mortgage treatment.--The
agencies and officials described in subparagraph (B) shall,
in consultation with the Bureau, prescribe rules defining the
types of loans they insure, guarantee, or administer, as the
case may be,

[[Page S3252]]

that are qualified mortgages for purposes of this section,
upon a finding that such rules are consistent with the
purposes of this section or are appropriate to prevent
circumvention or evasion thereof or to facilitate compliance
with this section.
``(B) Agencies and officials.--The agencies and officials
described in this subparagraph are--
``(i) the Secretary of the Department of Housing and Urban
Development, with regard to mortgages insured under title II
of the National Housing Act (12 U.S.C. 1707 et seq.);
``(ii) the Secretary of Veterans Affairs, with regard to a
loan made or guaranteed by the Secretary of Veterans Affairs;
``(iii) the Secretary of Agriculture, with regard to loans
guaranteed by the Secretary of Agriculture pursuant to
section 502 of the Housing Act of 1949 (42 U.S.C. 1472(h));
``(iv) the Federal Housing Finance Agency, with regard to
loans meeting the conforming loan standards of the Federal
National Mortgage Association or the Federal Home Loan
Mortgage Corporation; and
``(v) the Rural Housing Service, with regard to loans
insured by the Rural Housing Service.
``(4) Implementation.--Regulations required or authorized
to be prescribed under this subsection--
``(A) shall be prescribed in final form before the end of
the 12-month period beginning on the date of enactment of
this section; and
``(B) shall take effect not later than 18 months after the
date of enactment of this section.
``(g) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Average prime offer rate.--The term `average prime
offer rate' means an annual percentage rate that is derived
from average interest rates, points, and other loan pricing
terms currently offered to consumers by a representative
sample of creditors for mortgage transactions that have low-
risk pricing characteristics.
``(2) Prepayment penalty.--The term `prepayment penalty'
means any penalty for paying all or part of the principal on
an extension of credit before the date on which the principal
is due, including a computation of a refund of unearned
interest by a method that is less favorable to the consumer
than the actuarial method, as defined in section 933(d) of
the Housing and Community Development Act of 1992 (15 U.S.C.
1615(d)).
``(3) Qualified mortgage.--The term `qualified mortgage'
means--
``(A) any residential mortgage loan--
``(i) that does not have an adjustable rate;
``(ii) that does not allow a consumer to defer repayment of
principal or interest, or is not otherwise deemed a `non-
traditional mortgage' under guidance, advisories, or
regulations prescribed by the Bureau;
``(iii) that does not provide for a repayment schedule that
results in negative amortization at any time;
``(iv) for which the terms are fully amortizing and which
does not result in a balloon payment, where a `balloon
payment' is a scheduled payment that is more than twice as
large as the average of earlier scheduled payments;
``(v) which has an annual percentage rate that does not
exceed the average prime offer rate for a comparable
transaction, as of the date on which the interest rate is
set--

``(I) by 1.5 or more percentage points, in the case of a
first lien residential mortgage loan having an original
principal obligation amount that is equal to or less than the
amount of the maximum limitation on the original principal
obligation of a mortgage in effect for a residence of the
applicable size, as of the date on which such interest rate
is set, pursuant to the sixth sentence of section 305(a)(2)
of the Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2));
``(II) by 2.5 or more percentage points, in the case of a
first lien residential mortgage loan having an original
principal obligation amount that is more than the amount of
the maximum limitation on the original principal obligation
of a mortgage in effect for a residence of the applicable
size, as of the date on which such interest rate is set,
pursuant to the sixth sentence of section 305(a)(2) of the
Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2)); or
``(III) by 3.5 or more percentage points, in the case of a
subordinate lien residential mortgage loan;

``(vi) for which the income and financial resources relied
upon to qualify the obligors on the loan are verified and
documented;
``(vii) for which the underwriting process is based on a
payment schedule that fully amortizes the loan over the loan
term and takes into account all applicable taxes, insurance,
and assessments;
``(viii) that does not cause the total monthly debts of the
consumer, including amounts under the loan, to exceed a
percentage established by regulation of the monthly gross
income of the consumer, or such other maximum percentage of
such income, as may be prescribed by regulation under
subsection (g), which rules shall take into consideration the
income of the consumer available to pay regular expenses
after payment of all installment and revolving debt;
``(ix) for which the total points and fees payable in
connection with the loan do not exceed 2 percent of the total
loan amount, where the term `points and fees' means points
and fees as defined by Section 103(aa)(4) of the Truth in
Lending Act (15 U.S.C. 1602(aa)(4)); and
``(x) for which the term of the loan does not exceed 30
years, except as such term may be extended under subsection
(g); and
``(B) any reverse mortgage that is insured by the Federal
Housing Administration or complies with the condition
established in subparagraph (A)(v).
``(4) Residential mortgage loan.--The term `residential
mortgage loan' means any consumer credit transaction that is
secured by a mortgage, deed of trust, or other equivalent
consensual security interest on a dwelling or on residential
real property that includes a dwelling, other than a consumer
credit transaction under an open end credit plan or an
extension of credit relating to a plan described in section
101(53D) of title 11, United States Code.''.
(b) Conforming Amendments.--Section 129(c) of the Truth in
Lending Act (15 U.S.C. 1639(c)) is amended--
(1) by striking paragraph (2);
(2) by striking ``(1) In general.--''; and
(3) by redesignating subparagraphs (A) and (B) as
paragraphs (1) and (2), respectively.

SEC. 1073. ASSISTANCE FOR ECONOMICALLY VULNERABLE INDIVIDUALS
AND FAMILIES.

(a) HERA Amendments.--Section 1132 of the Housing and
Economic Recovery Act of 2008 (12 U.S.C. 1701x note) is
amended--
(1) in subsection (a), by inserting in each of paragraphs
(1), (2), (3), and (4) ``or economically vulnerable
individuals and families'' after ``homebuyers'' each place
that term appears;
(2) in subsection (b)(1), by inserting ``or economically
vulnerable individuals and families'' after ``homebuyers'';
(3) in subsection (c)(1)--
(A) in subparagraph (A), by striking ``or'' at the end;
(B) in subparagraph (B), by striking the period at the end
and inserting ``; or''; and
(C) by adding at the end the following:
``(C) a nonprofit corporation that--
``(i) is exempt from taxation under section 501(c)(3) of
the Internal Revenue Code of 1986; and
``(ii) specializes or has expertise in working with
economically vulnerable individuals and families, but whose
primary purpose is not provision of credit counseling
services.''; and
(4) in subsection (d)(1), by striking ``not more than 5''.
(b) Applicability.--Amendments made by subsection (a) shall
not apply to programs authorized by section 1132 of the
Housing and Economic Recovery Act of 2008 (12 U.S.C. 1701x
note) that are funded with appropriations prior to fiscal
year 2011.

SEC. 1074. REMITTANCE TRANSFERS.

(a) Treatment of Remittance Transfers.--The Electronic Fund
Transfer Act (15 U.S.C. 1693 et seq.) is amended--
(1) in section 902(b) (15 U.S.C. 1693(b)), by inserting
``and remittance'' after ``electronic fund'';
(2) by redesignating sections 919, 920, 921, and 922 as
sections 920, 921, 922, and 923, respectively; and
(3) by inserting after section 918 the following:

``SEC. 919. REMITTANCE TRANSFERS.

``(a) Disclosures Required for Remittance Transfers.--
``(1) In general.--Each remittance transfer provider shall
make disclosures as required under this section and in
accordance with rules prescribed by the Board.
``(2) Storefront disclosures.--
``(A) In general.--At every physical storefront location
owned or controlled by a remittance transfer provider (with
respect to remittance transfer activities), the remittance
transfer provider shall prominently post, and update daily, a
notice describing a model transfer for the amounts of $100
and $200 (in United States dollars) showing the amount of
currency that will be received by the designated recipient,
using the values of the currency into which the funds will be
exchanged for the 3 currencies to which that particular
storefront sends the greatest number of remittance transfer
payments, measured irrespective of the value of such
payments. The values shall include all fees charged by the
remittance transfer provider, taken out of the $100 and $200
amounts.
``(B) Electronic disclosure.--Subject to the rules
prescribed by the Board, a remittance transfer provider shall
prominently post, and update daily, a notice describing a
model transfer, as described in subparagraph (A), on the
Internet site owned or controlled by the remittance transfer
provider which senders use to electronically conduct
remittance transfer transactions.
``(3) Specific disclosures.--In addition to any other
disclosures applicable under this title, and subject to
paragraph (4), a remittance transfer provider shall provide,
in writing and in a form that the sender may keep, to each
sender requesting a remittance transfer, as applicable to the
transaction--
``(A) at the time at which the sender requests a remittance
transfer to be initiated, and prior to the sender making any
payment in connection with the remittance transfer, a
disclosure describing the amount of currency that will be
sent to the designated recipient, using the values of the
currency into which the funds will be exchanged; and
``(B) at the time at which the sender makes payment in
connection with the remittance transfer--
``(i) a receipt showing--

``(I) the information described in subparagraph (A);

[[Page S3253]]

``(II) the promised date of delivery to the designated
recipient; and
``(III) the name and either the telephone number or the
address of the designated recipient; and

``(ii) a statement containing--

``(I) information about the rights of the sender under this
section regarding the resolution of errors; and
``(II) appropriate contact information for--

``(aa) the remittance transfer provider; and
``(bb) each State or Federal agency supervising the
remittance transfer provider, including its State licensing
authority or Federal regulator, as applicable.
``(4) Requirements relating to disclosures.--With respect
to each disclosure required to be provided under paragraph
(3), and subject to paragraph (5), a remittance transfer
provider shall--
``(A) provide an initial notice and receipt, as required by
subparagraphs (A) and (B) of paragraph (3), and an error
resolution statement, as required by subsection (c), that
clearly and conspicuously describe the information required
to be disclosed therein; and
``(B) with respect to any transaction that a sender
conducts electronically, comply with the Electronic
Signatures in Global and National Commerce Act (15 U.S.C.
7001 et seq.).
``(5) Exemption authority.--The Board may, by rule, permit
a remittance transfer provider to satisfy the requirements
of--
``(A) paragraph (3)(A) orally, if the transaction is
conducted entirely by telephone;
``(B) paragraph (3)(B), by mailing the documents required
under such subparagraph to the sender, not later than 1
business day after the date on which the transaction is
conducted, if the transaction is conducted entirely by
telephone;
``(C) subparagraphs (A) and (B) of paragraph (3) together
in one written disclosure, but only to the extent that the
information provided in accordance with paragraph (3)(A) is
accurate at the time at which payment is made in connection
with the subject remittance transfer;
``(D) paragraph (3)(A), if a sender initiates a transaction
to one of those countries displayed, in the exact amount of
the transfers displayed pursuant to paragraph (2), if the
Board finds it to be appropriate; and
``(E) paragraph (3)(A), without compliance with section
101(c) of the Electronic Signatures in Global Commerce Act,
if a sender initiates the transaction electronically and the
information is displayed electronically in a manner that the
sender can keep.
``(b) Foreign Language Disclosures.--
``(1) In general.--The disclosures required under this
section shall be made in English and in each of the same
foreign languages principally used by the remittance transfer
provider, or any of its agents, to advertise, solicit, or
market, either orally or in writing, at that office.
``(2) Accounts.--In the case of a sender who holds a demand
deposit, savings deposit, or other asset account with the
remittance transfer provider (other than an occasional or
incidental credit balance under an open end credit plan, as
defined in section 103(i) of the Truth in Lending Act), the
disclosures required under this section shall be made in the
language or languages principally used by the remittance
transfer provider to communicate to the sender with respect
to the account.
``(c) Remittance Transfer Errors.--
``(1) Error resolution.--
``(A) In general.--If a remittance transfer provider
receives oral or written notice from the sender within 180
days of the promised date of delivery that an error occurred
with respect to a remittance transfer, including the amount
of currency designated in subsection (a)(3)(A) that was to be
sent to the designated recipient of the remittance transfer,
using the values of the currency into which the funds should
have been exchanged, but was not made available to the
designated recipient in the foreign country, the remittance
transfer provider shall resolve the error pursuant to this
subsection and investigate the reason for the error.
``(B) Remedies.--Not later than 90 days after the date of
receipt of a notice from the sender pursuant to subparagraph
(A), the remittance transfer provider shall, as applicable to
the error and as designated by the sender--
``(i) refund to the sender the total amount of funds
tendered by the sender in connection with the remittance
transfer which was not properly transmitted;
``(ii) make available to the designated recipient, without
additional cost to the designated recipient or to the sender,
the amount appropriate to resolve the error;
``(iii) provide such other remedy, as determined
appropriate by rule of the Board for the protection of
senders; or
``(iv) provide written notice to the sender that there was
no error with an explanation responding to the specific
complaint of the sender.
``(2) Rules.--The Board shall establish, by rule issued not
later than 1 calendar year after the date of enactment of the
Restoring American Financial Stability Act of 2010, clear and
appropriate standards for remittance transfer providers with
respect to error resolution relating to remittance transfers,
to protect senders from such errors. Standards prescribed
under this paragraph shall include appropriate standards
regarding record keeping, as required, including
documentation--
``(A) of the complaint of the sender;
``(B) that the sender provides the remittance transfer
provider with respect to the alleged error; and
``(C) of the findings of the remittance transfer provider
regarding the investigation of the alleged error that the
sender brought to their attention.
``(d) Applicability of This Title.--
``(1) In general.--A remittance transfer that is not an
electronic fund transfer, as defined in section 903, shall
not be subject to any of the provisions of sections 905
through 913. A remittance transfer that is an electronic fund
transfer, as defined in section 903, shall be subject to all
provisions of this title, except for section 908, that are
otherwise applicable to electronic fund transfers under this
title.
``(2) Rule of construction.--Nothing in this section shall
be construed--
``(A) to affect the application to any transaction, to any
remittance provider, or to any other person of any of the
provisions of subchapter II of chapter 53 of title 31, United
States Code, section 21 of the Federal Deposit Insurance Act
(12 U.S.C. 1829b), or chapter 2 of title I of Public Law 91-
508 (12 U.S.C. 1951-1959), or any regulations promulgated
thereunder; or
``(B) to cause any fund transfer that would not otherwise
be treated as such under paragraph (1) to be treated as an
electronic fund transfer, or as otherwise subject to this
title, for the purposes of any of the provisions referred to
in subparagraph (A) or any regulations promulgated
thereunder.
``(e) Acts of Agents.--A remittance transfer provider shall
be liable for any violation of this section by any agent,
authorized delegate, or person affiliated with such provider,
when such agent, authorized delegate, or affiliate acts for
that remittance transfer provider.
``(f) Definitions.--As used in this section--
``(1) the term `designated recipient' means any person
located in a foreign country and identified by the sender as
the authorized recipient of a remittance transfer to be made
by a remittance transfer provider, except that a designated
recipient shall not be deemed to be a consumer for purposes
of this Act;
``(2) the term `remittance transfer' means the electronic
(as defined in section 106(2) of the Electronic Signatures in
Global and National Commerce Act (15 U.S.C. 7006(2)))
transfer of funds requested by a sender located in any State
to a designated recipient that is initiated by a remittance
transfer provider, whether or not the sender holds an account
with the remittance transfer provider or whether or not the
remittance transfer is also an electronic fund transfer, as
defined in section 903;
``(3) the term `remittance transfer provider' means any
person or financial institution that provides remittance
transfers for a consumer in the normal course of its
business, whether or not the consumer holds an account with
such person or financial institution; and
``(4) the term `sender' means a consumer who requests a
remittance provider to send a remittance transfer for the
consumer to a designated recipient.''.
(b) Automated Clearinghouse System.--
(1) Expansion of system.--The Board of Governors shall work
with the Federal reserve banks to expand the use of the
automated clearinghouse system for remittance transfers to
foreign countries, with a focus on countries that receive
significant remittance transfers from the United States,
based on--
(A) the number, volume, and size of such transfers;
(B) the significance of the volume of such transfers
relative to the external financial flows of the receiving
country, including--
(i) the total amount transferred; and
(ii) the total volume of payments made by United States
Government agencies to beneficiaries and retirees living
abroad;
(C) the feasibility of such an expansion; and
(D) the ability of the Federal Reserve System to establish
payment gateways in different geographic regions and currency
zones to receive remittance transfers and route them through
the payments systems in the destination countries.
(2) Report to congress.--Not later than one calendar year
after the date of enactment of this Act, and on April 30
biennially thereafter during the 10-year period beginning on
that date of enactment, the Board of Governors shall submit a
report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives on the status of the
automated clearinghouse system and its progress in complying
with the requirements of this subsection. The report shall
include an analysis of adoption rates of International ACH
Transactions rules and formats, the efficacy of increasing
adoption rates, and potential recommendations to increase
adoption.
(c) Expansion of Financial Institution Provision of
Remittance Transfers.--
(1) Provision of guidelines to institutions.--Each of the
Federal banking agencies and the National Credit Union
Administration shall provide guidelines to financial
institutions under the jurisdiction of the agency regarding
the offering of low-cost remittance transfers and no-cost or
low-cost basic consumer accounts, as well as agency services
to remittance transfer providers.
(2) Assistance to financial literacy commission.--As part
of its duties as members of the Financial Literacy and
Education Commission, the Bureau, the Federal banking

[[Page S3254]]

agencies, and the National Credit Union Administration shall
assist the Financial Literacy and Education Commission in
executing the Strategy for Assuring Financial Empowerment (or
the ``SAFE Strategy''), as it relates to remittances.
(d) Federal Credit Union Act Conforming Amendment.--
Paragraph (12) of section 107 of the Federal Credit Union Act
(12 U.S.C. 1757) is amended to read as follows:
``(12) in accordance with regulations prescribed by the
Board--
``(A) to sell, to persons in the field of membership,
negotiable checks (including travelers checks), money orders,
and other similar money transfer instruments (including
international and domestic electronic fund transfers);
``(B) to provide remittance transfers, as defined in
section 919 of the Electronic Fund Transfer Act, to persons
in the field of membership; and
``(C) to cash checks and money orders for persons in the
field of membership for a fee;''.

Subtitle H--Conforming Amendments

SEC. 1081. AMENDMENTS TO THE INSPECTOR GENERAL ACT.

Effective on the date of enactment of this Act, the
Inspector General Act of 1978 (5 U.S.C. App. 3) is amended--
(1) in section 8G(a)(2), by inserting ``and the Bureau of
Consumer Financial Protection'' after ``Board of Governors of
the Federal Reserve System'';
(2) in section 8G(c), by adding at the end the following:
``For purposes of implementing this section, the Chairman of
the Board of Governors of the Federal Reserve System shall
appoint the Inspector General of the Board of Governors of
the Federal Reserve System and the Bureau of Consumer
Financial Protection. The Inspector General of the Board of
Governors of the Federal Reserve System and the Bureau of
Consumer Financial Protection shall have all of the
authorities and responsibilities provided by this Act with
respect to the Bureau of Consumer Financial Protection, as if
the Bureau were part of the Board of Governors of the Federal
Reserve System.''; and
(3) in section 8G(g)(3), by inserting ``and the Bureau of
Consumer Financial Protection'' after ``Board of Governors of
the Federal Reserve System'' the first place that term
appears.

SEC. 1082. AMENDMENTS TO THE PRIVACY ACT OF 1974.

Effective on the date of enactment of this Act, section
552a of title 5, United States Code, is amended by adding at
the end the following:
``(w) Applicability to Bureau of Consumer Financial
Protection.--Except as provided in the Consumer Financial
Protection Act of 2010, this section shall apply with respect
to the Bureau of Consumer Financial Protection.''.

SEC. 1083. AMENDMENTS TO THE ALTERNATIVE MORTGAGE TRANSACTION
PARITY ACT OF 1982.

(a) In General.--The Alternative Mortgage Transaction
Parity Act of 1982 (12 U.S.C. 3801 et seq.) is amended--
(1) in section 803 (12 U.S.C. 3802(1)), by striking
``1974'' and all that follows through ``described and
defined'' and inserting the following: ``1974), in which the
interest rate or finance charge may be adjusted or
renegotiated, described and defined''; and
(2) in section 804 (12 U.S.C. 3803)--
(A) in subsection (a)--
(i) in each of paragraphs (1), (2), and (3), by inserting
after ``transactions made'' each place that term appears ``on
or before the designated transfer date, as determined under
section 1062 of the Consumer Financial Protection Act of
2010,'';
(ii) in paragraph (2), by striking ``and'' at the end;
(iii) in paragraph (3), by striking the period at the end
and inserting ``; and''; and
(iv) by adding at the end the following new paragraph:
``(4) with respect to transactions made after the
designated transfer date, only in accordance with regulations
governing alternative mortgage transactions, as issued by the
Bureau of Consumer Financial Protection for federally
chartered housing creditors, in accordance with the
rulemaking authority granted to the Bureau of Consumer
Financial Protection with regard to federally chartered
housing creditors under provisions of law other than this
section.'';
(B) by striking subsection (c) and inserting the following:
``(c) Preemption of State Law.--An alternative mortgage
transaction may be made by a housing creditor in accordance
with this section, notwithstanding any State constitution,
law, or regulation that prohibits an alternative mortgage
transaction. For purposes of this subsection, a State
constitution, law, or regulation that prohibits an
alternative mortgage transaction does not include any State
constitution, law, or regulation that regulates mortgage
transactions generally, including any restriction on
prepayment penalties or late charges.''; and
(C) by adding at the end the following:
``(d) Bureau Actions.--The Bureau of Consumer Financial
Protection shall--
``(1) review the regulations identified by the Comptroller
of the Currency and the National Credit Union Administration,
(as those rules exist on the designated transfer date), as
applicable under paragraphs (1) through (3) of subsection
(a);
``(2) determine whether such regulations are fair and not
deceptive and otherwise meet the objectives of the Consumer
Financial Protection Act of 2010; and
``(3) promulgate regulations under subsection (a)(4) after
the designated transfer date.
``(e) Designated Transfer Date.--As used in this section,
the term `designated transfer date' means the date determined
under section 1062 of the Consumer Financial Protection Act
of 2010.''.
(b) Effective Date.--This section and the amendments made
by this section shall become effective on the designated
transfer date.
(c) Rule of Construction.--The amendments made by
subsection (a) shall not affect any transaction covered by
the Alternative Mortgage Transaction Parity Act of l982 (12
U.S.C. 3801 et seq.) and entered into on or before the
designated transfer date.

SEC. 1084. AMENDMENTS TO THE ELECTRONIC FUND TRANSFER ACT.

The Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.)
is amended--
(1) by striking ``Board'' each place that term appears and
inserting ``Bureau'', except in section 918 (as so designated
by the Credit Card Act of 2009) (15 U.S.C. 1693o);
(2) in section 903 (15 U.S.C. 1693a), by striking paragraph
(3) and inserting the following:
``(3) the term `Bureau' means the Bureau of Consumer
Financial Protection;'';
(3) in section 916(d) (as so designated by section 401 of
the Credit CARD Act of 2009) (15 U.S.C. 1693m)--
(A) by striking ``Federal Reserve System'' and inserting
``Bureau of Consumer Financial Protection''; and
(B) by striking ``Federal Reserve System'' and inserting
``Bureau of Consumer Financial Protection''; and
(4) in section 918 (as so designated by the Credit CARD Act
of 2009) (15 U.S.C. 1693o)--
(A) in subsection (a)--
(i) by striking ``Compliance'' and inserting ``Except as
otherwise provided by subtitle B of the Consumer Financial
Protection Act of 2010, compliance''; and
(ii) by striking paragraph (2) and inserting the following:
``(2) subtitle E of the Consumer Financial Protection Act
of 2010, by the Bureau;''; and
(B) by striking subsection (c) and inserting the following:
``(c) Overall Enforcement Authority of the Federal Trade
Commission.--Except to the extent that enforcement of the
requirements imposed under this title is specifically
committed to some other Government agency under subsection
(a), and subject to subtitle B of the Consumer Financial
Protection Act of 2010, the Federal Trade Commission shall
enforce such requirements. For the purpose of the exercise by
the Federal Trade Commission of its functions and powers
under the Federal Trade Commission Act, a violation of any
requirement imposed under this title shall be deemed a
violation of a requirement imposed under that Act. All of the
functions and powers of the Federal Trade Commission under
the Federal Trade Commission Act are available to the Federal
Trade Commission to enforce compliance by any person subject
to the jurisdiction of the Federal Trade Commission with the
requirements imposed under this title, irrespective of
whether that person is engaged in commerce or meets any other
jurisdictional tests under the Federal Trade Commission
Act.''.

SEC. 1085. AMENDMENTS TO THE EQUAL CREDIT OPPORTUNITY ACT.

The Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.)
is amended--
(1) by striking ``Board'' each place that term appears and
inserting ``Bureau'';
(2) in section 702 (15 U.S.C. 1691a), by striking
subsection (c) and inserting the following:
``(c) The term `Bureau' means the Bureau of Consumer
Financial Protection.'';
(3) in section 703 (15 U.S.C. 1691b)--
(A) by striking the section heading and inserting the
following:

``SEC. 703. PROMULGATION OF REGULATIONS BY THE BUREAU.'';

(B) by striking ``(a) Regulations.--'';
(C) by striking subsection (b);
(D) by redesignating paragraphs (1) through (5) as
subsections (a) through (e), respectively; and
(E) in subsection (c), as so redesignated, by striking
``paragraph (2)'' and inserting ``subsection (b)'';
(4) in section 704 (15 U.S.C. 1691c)--
(A) in subsection (a)--
(i) by striking ``Compliance'' and inserting ``Except as
otherwise provided by subtitle B of the Consumer Protection
Financial Protection Act of 2010''; and
(ii) by striking paragraph (2) and inserting the following:
``(2) Subtitle E of the Consumer Financial Protection Act
of 2010, by the Bureau.'';
(B) by striking subsection (c) and inserting the following:
``(c) Overall Enforcement Authority of Federal Trade
Commission.--Except to the extent that enforcement of the
requirements imposed under this title is specifically
committed to some other Government agency under subsection
(a), and subject to subtitle B of the Consumer Financial
Protection Act of 2010, the Federal Trade Commission shall
enforce such requirements. For the purpose of the exercise by
the Federal Trade Commission of its functions and powers
under the Federal Trade Commission Act (15 U.S.C. 41 et
seq.), a violation of any requirement imposed under this
subchapter shall be deemed a violation of a requirement
imposed under that Act. All of the functions and powers of
the Federal Trade Commission under

[[Page S3255]]

the Federal Trade Commission Act are available to the Federal
Trade Commission to enforce compliance by any person with the
requirements imposed under this title, irrespective of
whether that person is engaged in commerce or meets any other
jurisdictional tests under the Federal Trade Commission Act,
including the power to enforce any rule prescribed by the
Bureau under this title in the same manner as if the
violation had been a violation of a Federal Trade Commission
trade regulation rule.''; and
(C) in subsection (d), by striking ``Board'' and inserting
``Bureau''; and
(5) in section 706(e) (15 U.S.C. 1691e(e))--
(A) in the subsection heading--
(i) by striking ``Board'' each place that term appears and
inserting ``Bureau''; and
(ii) by striking ``Federal Reserve System'' and inserting
``Bureau of Consumer Financial Protection''; and
(B) by striking ``Federal Reserve System'' and inserting
``Bureau of Consumer Financial Protection''.

SEC. 1086. AMENDMENTS TO THE EXPEDITED FUNDS AVAILABILITY
ACT.

(a) Amendment to Section 603.--Section 603(d)(1) of the
Expedited Funds Availability Act (12 U.S.C. 4002) is amended
by inserting after ``Board'' the following ``, jointly with
the Director of the Bureau of Consumer Financial
Protection,''.
(b) Amendments to Section 604.--Section 604 of the
Expedited Funds Availability Act (12 U.S.C. 4003) is
amended--
(1) by inserting after ``Board'' each place that term
appears, other than in subsection (f), the following: ``,
jointly with the Director of the Bureau of Consumer Financial
Protection,''; and
(2) in subsection (f), by striking ``Board.'' each place
that term appears and inserting the following: ``Board,
jointly with the Director of the Bureau of Consumer Financial
Protection.''.
(c) Amendments to Section 605.--Section 605 of the
Expedited Funds Availability Act (12 U.S.C. 4004) is
amended--
(1) by inserting after ``Board'' each place that term
appears, other than in the heading for section 605(f)(1), the
following: ``, jointly with the Director of the Bureau of
Consumer Financial Protection,''; and
(2) in subsection (f)(1), in the paragraph heading, by
inserting ``and bureau'' after ``board''.
(d) Amendments to Section 609.--Section 609 of the
Expedited Funds Availability Act (12 U.S.C. 4008) is amended:
(1) in subsection (a), by inserting after ``Board'' the
following ``, jointly with the Director of the Bureau of
Consumer Financial Protection,''; and
(2) by striking subsection (e) and inserting the following:
``(e) Consultations.--In prescribing regulations under
subsections (a) and (b), the Board and the Director of the
Bureau of Consumer Financial Protection, in the case of
subsection (a), and the Board, in the case of subsection (b),
shall consult with the Comptroller of the Currency, the Board
of Directors of the Federal Deposit Insurance Corporation,
and the National Credit Union Administration Board.''.
(e) Expedited Funds Availability Improvements.--Section 603
of the Expedited Funds Availability Act (12 U.S.C. 4002) is
amended--
(1) in subsection (a)(2)(D), by striking ``$100'' and
inserting ``$200''; and
(2) in subsection (b)(3)(C), in the subparagraph heading,
by striking ``$100'' and inserting ``$200''; and
(3) in subsection (c)(1)(B)(iii), in the clause heading, by
striking ``$100'' and inserting ``$200''.
(f) Regular Adjustments for Inflation.--Section 607 of the
Expedited Funds Availability Act (12 U.S.C. 4006) is amended
by adding at the end the following:
``(f) Adjustments to Dollar Amounts for Inflation.--The
dollar amounts under this title shall be adjusted every 5
years after December 31, 2011, by the annual percentage
increase in the Consumer Price Index for Urban Wage Earners
and Clerical Workers, as published by the Bureau of Labor
Statistics, rounded to the nearest multiple of $25.''.

SEC. 1087. AMENDMENTS TO THE FAIR CREDIT BILLING ACT.

The Fair Credit Billing Act (15 U.S.C. 1666-1666j) is
amended by striking ``Board'' each place that term appears
and inserting ``Bureau''.

SEC. 1088. AMENDMENTS TO THE FAIR CREDIT REPORTING ACT AND
THE FAIR AND ACCURATE CREDIT TRANSACTIONS ACT.

(a) Fair Credit Reporting Act.--The Fair Credit Reporting
Act (15 U.S.C. 1681 et seq.) is amended--
(1) in section 603 (15 U.S.C. 1681a)--
(A) by redesignating subsections (w) and (x) as subsections
(x) and (y), respectively; and
(B) by inserting after subsection (v) the following:
``(w) The term `Bureau' means the Bureau of Consumer
Financial Protection.''; and
(2) except as otherwise specifically provided in this
subsection--
(A) by striking ``Federal Trade Commission'' each place
that term appears and inserting ``Bureau'';
(B) by striking ``FTC'' each place that term appears and
inserting ``Bureau'';
(C) by striking ``the Commission'' each place that term
appears and inserting ``the Bureau''; and
(D) by striking ``The Federal banking agencies, the
National Credit Union Administration, and the Commission
shall jointly'' each place that term appears and inserting
``The Bureau shall'';
(3) in section 603(k)(2) (15 U.S.C. 1681a(k)(2)), by
striking ``Board of Governors of the Federal Reserve System''
and inserting ``Bureau'';
(4) in section 604(g) (15 U.S.C. 1681b(g))--
(A) in paragraph (3), by striking subparagraph (C) and
inserting the following:
``(C) as otherwise determined to be necessary and
appropriate, by regulation or order, by the Bureau
(consistent with the enforcement authorities prescribed under
section 621(b)), or the applicable State insurance authority
(with respect to any person engaged in providing insurance or
annuities).'';
(B) by striking paragraph (5) and inserting the following:
``(5) Regulations and effective date for paragraph (2).--
``(A) Regulations required.--The Bureau may, after notice
and opportunity for comment, prescribe regulations that
permit transactions under paragraph (2) that are determined
to be necessary and appropriate to protect legitimate
operational, transactional, risk, consumer, and other needs
(and which shall include permitting actions necessary for
administrative verification purposes), consistent with the
intent of paragraph (2) to restrict the use of medical
information for inappropriate purposes.''; and
(C) by striking paragraph (6);
(5) in section 611(e)(2) (15 U.S.C. 1681i(e)), by striking
paragraph (2) and inserting the following:
``(2) Exclusion.--Complaints received or obtained by the
Bureau pursuant to its investigative authority under the
Consumer Financial Protection Act of 2010 shall not be
subject to paragraph (1).'';
(6) in section 615(h)(6) (15 U.S.C. 1681m(h)(6)), by
striking subparagraph (A) and inserting the following:
``(A) Rules required.--The Bureau shall prescribe rules to
carry out this subsection.'';
(7) in section 621 (15 U.S.C. 1681s)--
(A) by striking subsection (a) and inserting the following:
``(a) Enforcement by Federal Trade Commission.--
``(1) In general.--Except as otherwise provided by subtitle
B of the Consumer Financial Protection Act of 2010,
compliance with the requirements imposed under this title
shall be enforced under the Federal Trade Commission Act (15
U.S.C. 41 et seq.) by the Federal Trade Commission, with
respect to consumer reporting agencies and all other persons
subject thereto, except to the extent that enforcement of the
requirements imposed under this title is specifically
committed to some other Government agency under subsection
(b). For the purpose of the exercise by the Federal Trade
Commission of its functions and powers under the Federal
Trade Commission Act, a violation of any requirement or
prohibition imposed under this title shall constitute an
unfair or deceptive act or practice in commerce, in violation
of section 5(a) of the Federal Trade Commission Act (15
U.S.C. 45(a)), and shall be subject to enforcement by the
Federal Trade Commission under section 5(b) of that Act with
respect to any consumer reporting agency or person that is
subject to enforcement by the Federal Trade Commission
pursuant to this subsection, irrespective of whether that
person is engaged in commerce or meets any other
jurisdictional tests under the Federal Trade Commission Act.
The Federal Trade Commission shall have such procedural,
investigative, and enforcement powers (except as otherwise
provided by subtitle B of the Consumer Financial Protection
Act of 2010), including the power to issue procedural rules
in enforcing compliance with the requirements imposed under
this title and to require the filing of reports, the
production of documents, and the appearance of witnesses, as
though the applicable terms and conditions of the Federal
Trade Commission Act were part of this title. Any person
violating any of the provisions of this title shall be
subject to the penalties and entitled to the privileges and
immunities provided in the Federal Trade Commission Act as
though the applicable terms and provisions of such Act are
part of this title.
``(2) Penalties.--
``(A) Knowing violations.--Except as otherwise provided by
subtitle B of the Consumer Financial Protection Act of 2010,
in the event of a knowing violation, which constitutes a
pattern or practice of violations of this title, the Federal
Trade Commission may commence a civil action to recover a
civil penalty in a district court of the United States
against any person that violates this title. In such action,
such person shall be liable for a civil penalty of not more
than $2,500 per violation.
``(B) Determining penalty amount.--In determining the
amount of a civil penalty under subparagraph (A), the court
shall take into account the degree of culpability, any
history of such prior conduct, ability to pay, effect on
ability to continue to do business, and such other matters as
justice may require.
``(C) Limitation.--Notwithstanding paragraph (2), a court
may not impose any civil penalty on a person for a violation
of section 623(a)(1), unless the person has been enjoined
from committing the violation, or ordered not to commit the
violation, in an action or proceeding brought by or on behalf
of the Federal Trade Commission, and has violated the
injunction or order, and the court may

[[Page S3256]]

not impose any civil penalty for any violation occurring
before the date of the violation of the injunction or
order.'';
(8) by striking subsection (b) and inserting the following:
``(b) Enforcement by Other Agencies.--
``(1) In general.--Except as otherwise provided by subtitle
B of the Consumer Financial Protection Act of 2010,
compliance with the requirements imposed under this title
with respect to consumer reporting agencies, persons who use
consumer reports from such agencies, persons who furnish
information to such agencies, and users of information that
are subject to section 615(d) shall be enforced under--
``(A) section 8 of the Federal Deposit Insurance Act (12
U.S.C. 1818), in the case of--
``(i) any national bank, and any Federal branch or Federal
agency of a foreign bank, by the Office of the Comptroller of
the Currency;
``(ii) any member bank of the Federal Reserve System (other
than a national bank), a branch or agency of a foreign bank
(other than a Federal branch, Federal agency, or insured
State branch of a foreign bank), a commercial lending company
owned or controlled by a foreign bank, and any organization
operating under section 25 or 25A of the Federal Reserve Act,
by the Board of Governors of the Federal Reserve System; and
``(iii) any bank insured by the Federal Deposit Insurance
Corporation (other than a member of the Federal Reserve
System) and any insured State branch of a foreign bank, by
the Board of Directors of the Federal Deposit Insurance
Corporation;
``(B) subtitle E of the Consumer Financial Protection Act
of 2010, by the Bureau;
``(C) the Federal Credit Union Act (12 U.S.C. 1751 et
seq.), by the Administrator of the National Credit Union
Administration with respect to any Federal credit union;
``(D) subtitle IV of title 49, United States Code, by the
Secretary of Transportation, with respect to all carriers
subject to the jurisdiction of the Surface Transportation
Board;
``(E) the Federal Aviation Act of 1958 (49 U.S.C. App. 1301
et seq.), by the Secretary of Transportation, with respect to
any air carrier or foreign air carrier subject to that Act;
``(F) the Packers and Stockyards Act, 1921 (7 U.S.C. 181 et
seq.) (except as provided in section 406 of that Act), by the
Secretary of Agriculture, with respect to any activities
subject to that Act;
``(G) the Commodity Exchange Act, with respect to a person
subject to the jurisdiction of the Commodity Futures Trading
Commission; and
``(H) the Federal securities laws, and any other laws that
are subject to the jurisdiction of the Securities and
Exchange Commission, with respect to a person that is subject
to the jurisdiction of the Securities and Exchange
Commission.
``(2) Incorporated definitions.--The terms used in
paragraph (1) that are not defined in this title or otherwise
defined in section 3(s) of the Federal Deposit Insurance Act
(12 U.S.C. 1813(s)) have the same meanings as in section 1(b)
of the International Banking Act of 1978 (12 U.S.C. 3101).'';
(9) by striking subsection (e) and inserting the following:
``(e) Regulatory Authority.--The Bureau shall prescribe
such regulations as are necessary to carry out the purposes
of this Act. The regulations prescribed by the Bureau under
this subsection shall apply to any person that is subject to
this Act, notwithstanding the enforcement authorities granted
to other agencies under this section.''; and
(10) in section 623 (15 U.S.C. 1681s-2)--
(A) in subsection (a)(7), by striking subparagraph (D) and
inserting the following:
``(D) Model disclosure.--
``(i) Duty of bureau.--The Bureau shall prescribe a brief
model disclosure that a financial institution may use to
comply with subparagraph (A), which shall not exceed 30
words.
``(ii) Use of model not required.--No provision of this
paragraph may be construed to require a financial institution
to use any such model form prescribed by the Bureau.
``(iii) Compliance using model.--A financial institution
shall be deemed to be in compliance with subparagraph (A) if
the financial institution uses any model form prescribed by
the Bureau under this subparagraph, or the financial
institution uses any such model form and rearranges its
format.''; and
(B) by striking subsection (e) and inserting the following:
``(e) Accuracy Guidelines and Regulations Required.--
``(1) Guidelines.--The Bureau shall, with respect to
persons or entities that are subject to the enforcement
authority of the Bureau under section 621--
``(A) establish and maintain guidelines for use by each
person that furnishes information to a consumer reporting
agency regarding the accuracy and integrity of the
information relating to consumers that such entities furnish
to consumer reporting agencies, and update such guidelines as
often as necessary; and
``(B) prescribe regulations requiring each person that
furnishes information to a consumer reporting agency to
establish reasonable policies and procedures for implementing
the guidelines established pursuant to subparagraph (A).
``(2) Criteria.--In developing the guidelines required by
paragraph (1)(A), the Bureau shall--
``(A) identify patterns, practices, and specific forms of
activity that can compromise the accuracy and integrity of
information furnished to consumer reporting agencies;
``(B) review the methods (including technological means)
used to furnish information relating to consumers to consumer
reporting agencies;
``(C) determine whether persons that furnish information to
consumer reporting agencies maintain and enforce policies to
ensure the accuracy and integrity of information furnished to
consumer reporting agencies; and
``(D) examine the policies and processes that persons that
furnish information to consumer reporting agencies employ to
conduct reinvestigations and correct inaccurate information
relating to consumers that has been furnished to consumer
reporting agencies.''.
(b) Fair and Accurate Credit Transactions Act of 2003.--
Section 214(b)(1) of the Fair and Accurate Credit
Transactions Act of 2003 (15 U.S.C. 1681s-3 note) is amended
by striking paragraph (1) and inserting the following:
``(1) In general.--Regulations to carry out section 624 of
the Fair Credit Reporting Act (15 U.S.C. 1681s-3), shall be
prescribed, as described in paragraph (2), by--
``(A) the Commodity Futures Trading Commission, with
respect to entities subject to its enforcement authorities;
``(B) the Securities and Exchange Commission, with respect
to entities subject to its enforcement authorities; and
``(C) the Bureau, with respect to other entities subject to
this Act.''.

SEC. 1089. AMENDMENTS TO THE FAIR DEBT COLLECTION PRACTICES
ACT.

The Fair Debt Collection Practices Act (15 U.S.C. 1692 et
seq.) is amended--
(1) by striking ``Commission'' each place that term appears
and inserting ``Bureau'';
(2) in section 803 (15 U.S.C. 1692a)--
(A) by striking paragraph (1) and inserting the following:
``(1) The term `Bureau' means the Bureau of Consumer
Financial Protection.'';
(3) in section 814 (15 U.S.C. 1692l)--
(A) by striking subsection (a) and inserting the following:
``(a) Federal Trade Commission.--Except as otherwise
provided by subtitle B of the Consumer Financial Protection
Act of 2010, compliance with this title shall be enforced by
the Federal Trade Commission, except to the extent that
enforcement of the requirements imposed under this title is
specifically committed to another Government agency under
subsection (b). For purpose of the exercise by the Federal
Trade Commission of its functions and powers under the
Federal Trade Commission Act (15 U.S.C. 41 et seq.), a
violation of this title shall be deemed an unfair or
deceptive act or practice in violation of that Act. All of
the functions and powers of the Federal Trade Commission
under the Federal Trade Commission Act are available to the
Federal Trade Commission to enforce compliance by any person
with this title, irrespective of whether that person is
engaged in commerce or meets any other jurisdictional tests
under the Federal Trade Commission Act, including the power
to enforce the provisions of this title, in the same manner
as if the violation had been a violation of a Federal Trade
Commission trade regulation rule.''; and
(B) in subsection (b)--
(i) by striking ``Compliance'' and inserting ``Except as
otherwise provided by subtitle B of the Consumer Financial
Protection Act of 2010, compliance''; and
(ii) by striking paragraph (2) and inserting the following:
``(2) subtitle E of the Consumer Financial Protection Act
of 2010, by the Bureau;''; and
(4) in subsection (d), by striking ``Neither the
Commission'' and all that follows through the end of the
subsection and inserting the following: ``The Bureau may
prescribe rules with respect to the collection of debts by
debt collectors, as defined in this Act.''.

SEC. 1090. AMENDMENTS TO THE FEDERAL DEPOSIT INSURANCE ACT.

The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.)
is amended--
(1) in section 8(t) (12 U.S.C. 1818(t)), by adding at the
end the following:
``(6) Referral to bureau of consumer financial
protection.--Subject to subtitle B of the Consumer Financial
Protection Act of 2010, each appropriate Federal banking
agency shall make a referral to the Bureau of Consumer
Financial Protection when the Federal banking agency has a
reasonable belief that a violation of an enumerated consumer
law, as defined in the Consumer Financial Protection Act of
2010, has been committed by any insured depository
institution or institution-affiliated party within the
jurisdiction of that appropriate Federal banking agency.'';
and
(2) in section 43 (12 U.S.C. 1831t)--
(A) in subsection (c), by striking ``Federal Trade
Commission'' and inserting ``Bureau'';
(B) in subsection (d), by striking ``Federal Trade
Commission'' and inserting ``Bureau'';
(C) in subsection (e)--
(i) in paragraph (2), by striking ``Federal Trade
Commission'' and inserting ``Bureau''; and
(ii) by adding at the end the following new paragraph:
``(5) Bureau.--The term `Bureau' means the Bureau of
Consumer Financial Protection.''; and
(D) in subsection (f)--

[[Page S3257]]

(i) by striking paragraph (1) and inserting the following:
``(1) Limited enforcement authority.--Compliance with the
requirements of subsections (b), (c), and (e), and any
regulation prescribed or order issued under such subsection,
shall be enforced under the Consumer Financial Protection Act
of 2010, by the Bureau, subject to subtitle B of the Consumer
Financial Protection Act of 2010, and under the Federal Trade
Commission Act (15 U.S.C. 41 et seq.) by the Federal Trade
Commission.''; and
(ii) in paragraph (2), by striking subparagraph (C) and
inserting the following:
``(C) Limitation on state action while federal action
pending.--If the Bureau or Federal Trade Commission has
instituted an enforcement action for a violation of this
section, no appropriate State supervisory agency may, during
the pendency of such action, bring an action under this
section against any defendant named in the complaint of the
Bureau or Federal Trade Commission for any violation of this
section that is alleged in that complaint.''.

SEC. 1091. AMENDMENTS TO THE GRAMM-LEACH-BLILEY ACT.

Title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et
seq.) is amended--
(1) in section 504(a)(1) (15 U.S.C. 6804(a)(1))--
(A) by striking ``The Federal banking agencies, the
National Credit Union Administration, the Secretary of the
Treasury,'' and inserting ``The Bureau of Consumer Financial
Protection and''; and
(B) by striking ``, and the Federal Trade Commission'';
(2) in section 505(a) (15 U.S.C. 6805(a))--
(A) by striking ``This subtitle'' and all that follows
through ``as follows:'' and inserting ``Except as otherwise
provided by subtitle B of the Consumer Financial Protection
Act of 2010, this subtitle and the regulations prescribed
thereunder shall be enforced by the Bureau of Consumer
Financial Protection, the Federal functional regulators, the
State insurance authorities, and the Federal Trade Commission
with respect to financial institutions and other persons
subject to their jurisdiction under applicable law, as
follows:'';
(B) in paragraph (1)--
(i) in subparagraph (B), by inserting ``and'' after the
semicolon;
(ii) in subparagraph (C), by striking ``; and'' and
inserting a period; and
(iii) by striking subparagraph (D); and
(C) by adding at the end the following:
``(8) Under the Consumer Financial Protection Act of 2010,
by the Bureau of Consumer Financial Protection, in the case
of any financial institution and other covered person or
service provider that is subject to the jurisdiction of the
Bureau under that Act, but not with respect to the standards
under section 501.''; and
(3) in section 505(b)(1) (15 U.S.C. 6805(b)(1)), by
inserting ``, other than the Bureau of Consumer Financial
Protection,'' after ``subsection (a)''.

SEC. 1092. AMENDMENTS TO THE HOME MORTGAGE DISCLOSURE ACT.

The Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2801 et
seq.) is amended--
(1) except as otherwise specifically provided in this
section, by striking ``Board'' each place that term appears
and inserting ``Bureau'';
(2) in section 303 (12 U.S.C. 2802)--
(A) by redesignating paragraphs (1) through (6) as
paragraphs (2) through (7), respectively; and
(B) by inserting before paragraph (2) the following:
``(1) the term `Bureau' means the Bureau of Consumer
Financial Protection;'';
(3) in section 304 (12 U.S.C. 2803)--
(A) in subsection (b)--
(i) in paragraph (4), by inserting ``age,'' before ``and
gender'';
(ii) in paragraph (3), by striking ``and'' at the end;
(iii) in paragraph (4), by striking the period at the end
and inserting a semicolon; and
(iv) by adding at the end the following:
``(5) the number and dollar amount of mortgage loans
grouped according to measurements of--
``(A) the total points and fees payable at origination in
connection with the mortgage as determined by the Bureau,
taking into account 15 U.S.C. 1602(aa)(4);
``(B) the difference between the annual percentage rate
associated with the loan and a benchmark rate or rates for
all loans;
``(C) the term in months of any prepayment penalty or other
fee or charge payable on repayment of some portion of
principal or the entire principal in advance of scheduled
payments; and
``(D) such other information as the Bureau may require; and
``(6) the number and dollar amount of mortgage loans and
completed applications grouped according to measurements of--
``(A) the value of the real property pledged or proposed to
be pledged as collateral;
``(B) the actual or proposed term in months of any
introductory period after which the rate of interest may
change;
``(C) the presence of contractual terms or proposed
contractual terms that would allow the mortgagor or applicant
to make payments other than fully amortizing payments during
any portion of the loan term;
``(D) the actual or proposed term in months of the mortgage
loan;
``(E) the channel through which application was made,
including retail, broker, and other relevant categories;
``(F) as the Bureau may determine to be appropriate, a
unique identifier that identifies the loan originator as set
forth in section 1503 of the S.A.F.E. Mortgage Licensing Act
of 2008;
``(G) as the Bureau may determine to be appropriate, a
universal loan identifier;
``(H) as the Bureau may determine to be appropriate, the
parcel number that corresponds to the real property pledged
or proposed to be pledged as collateral;
``(I) the credit score of mortgage applicants and
mortgagors, in such form as the Bureau may prescribe, except
that the Bureau shall modify or require modification of
credit score data that is or will be available to the public
to protect the compelling privacy interest of the mortgage
applicant or mortgagors; and
``(J) such other information as the Bureau may require.'';
(B) in subsection (i), by striking ``subsection (b)(4)''
and inserting ``subsections (b)(4), (b)(5), and (b)(6)'';
(C) in subsection (j)--
(i) in paragraph (1), by striking ``(as'' and inserting
``(containing loan-level and application-level information
relating to disclosures required under subsections (a) and
(b) and as otherwise'';
(ii) by striking paragraph (3) and inserting the following:
``(3) Change of form not required.--A depository
institution meets the disclosure requirement of paragraph (1)
if the institution provides the information required under
such paragraph in such formats as the Bureau may require'';
and
(iii) in paragraph (2)(A), by striking ``in the format in
which such information is maintained by the institution'' and
inserting ``in such formats as the Bureau may require'';
(D) in subsection (m), by striking paragraph (2) and
inserting the following:
``(2) Form of information.--In complying with paragraph
(1), a depository institution shall provide the person
requesting the information with a copy of the information
requested in such formats as the Bureau may require'';
(E) by striking subsection (h) and inserting the following:
``(h) Submission to Agencies.--
``(1) In general.--The data required to be disclosed under
subsection (b) shall be submitted to the Bureau or to the
appropriate agency for the institution reporting under this
title, in accordance with rules prescribed by the Bureau.
Notwithstanding the requirement of subsection (a)(2)(A) for
disclosure by census tract, the Bureau, in cooperation with
other appropriate regulators described in paragraph (2),
shall develop regulations that--
``(A) prescribe the format for such disclosures, the method
for submission of the data to the appropriate regulatory
agency, and the procedures for disclosing the information to
the public;
``(B) require the collection of data required to be
disclosed under subsection (b) with respect to loans sold by
each institution reporting under this title;
``(C) require disclosure of the class of the purchaser of
such loans; and
``(D) permit any reporting institution to submit in writing
to the Bureau or to the appropriate agency such additional
data or explanations as it deems relevant to the decision to
originate or purchase mortgage loans.
``(2) Other appropriate agencies.--The appropriate
regulators described in this paragraph are--
``(A) the Office of the Comptroller of the Currency
(hereafter referred to in this Act as `Comptroller') for
national banks and Federal branches, Federal agencies of
foreign banks, and savings associations;
``(B) the Federal Deposit Insurance Corporation for banks
insured by the Federal Deposit Insurance Corporation (other
than members of the Federal Reserve System), mutual savings
banks, insured State branches of foreign banks, and any other
depository institution described in section 303(2)(A) which
is not otherwise referred to in this paragraph;
``(C) the National Credit Union Administration Board for
credit unions; and
``(D) the Secretary of Housing and Urban Development for
other lending institutions not regulated by the agencies
referred to in subparagraphs (A) through (C).''; and
(F) by adding at the end the following:
``(n) Timing of Certain Disclosures.--The data required to
be disclosed under subsection (b) shall be submitted to the
Bureau or to the appropriate agency for any institution
reporting under this title, in accordance with regulations
prescribed by the Bureau. Institutions shall not be required
to report new data under paragraph (5) or (6) of subsection
(b) before the first January 1 that occurs after the end of
the 9-month period beginning on the date on which regulations
are issued by the Bureau in final form with respect to such
disclosures.'';
(4) in section 305 (12 U.S.C. 2804)--
(A) by striking subsection (b) and inserting the following:
``(b) Powers of Certain Other Agencies.--
``(1) In general.--Except as otherwise provided by subtitle
B of the Consumer Financial Protection Act of 2010,
compliance with the requirements of this title shall be
enforced--
``(A) under section 8 of the Federal Deposit Insurance Act,
in the case of--
``(i) any national bank, and any Federal branch or Federal
agency of a foreign bank,

[[Page S3258]]

by the Office of the Comptroller of the Currency;
``(ii) any member bank of the Federal Reserve System (other
than a national bank), branch or agency of a foreign bank
(other than a Federal branch, Federal agency, and insured
State branch of a foreign bank), commercial lending company
owned or controlled by a foreign bank, and any organization
operating under section 25 or 25(a) of the Federal Reserve
Act, by the Board; and
``(iii) any bank insured by the Federal Deposit Insurance
Corporation (other than a member of the Federal Reserve
System), any mutual savings bank as, defined in section 3(f)
of the Federal Deposit Insurance Act (12 U.S.C. 1813(f)), any
insured State branch of a foreign bank, and any other
depository institution not referred to in this paragraph or
subparagraph (B) or (C), by the Federal Deposit Insurance
Corporation;
``(B) under subtitle E of the Consumer Financial Protection
Act of 2010, by the Bureau;
``(C) under the Federal Credit Union Act, by the
Administrator of the National Credit Union Administration
with respect to any insured credit union; and
``(D) with respect to other lending institutions, by the
Secretary of Housing and Urban Development.
``(2) Incorporated definitions.--The terms used in
paragraph (1) that are not defined in this title or otherwise
defined in section 3(s) of the Federal Deposit Insurance Act
(12 U.S.C. 1813(s)) shall have the same meanings as in
section 1(b) of the International Banking Act of 1978 (12
U.S.C. 3101).''; and
(B) by adding at the end the following:
``(d) Overall Enforcement Authority of the Bureau of
Consumer Financial Protection.--Subject to subtitle B of the
Consumer Financial Protection Act of 2010, enforcement of the
requirements imposed under this title is committed to each of
the agencies under subsection (b). The Bureau may exercise
its authorities under the Consumer Financial Protection Act
of 2010 to exercise principal authority to examine and
enforce compliance by any person with the requirements of
this title.'';
(5) in section 306 (12 U.S.C. 2805(b)), by striking
subsection (b) and inserting the following:
``(b) Exemption Authority.--The Bureau may, by regulation,
exempt from the requirements of this title any State-
chartered depository institution within any State or
subdivision thereof, if the agency determines that, under the
law of such State or subdivision, that institution is subject
to requirements that are substantially similar to those
imposed under this title, and that such law contains adequate
provisions for enforcement. Notwithstanding any other
provision of this subsection, compliance with the
requirements imposed under this subsection shall be enforced
by the Office of the Comptroller of the Currency under
section 8 of the Federal Deposit Insurance Act, in the case
of national banks and savings associations, the deposits of
which are insured by the Federal Deposit Insurance
Corporation.''; and
(6) by striking section 307 (12 U.S.C. 2806) and inserting
the following:

``SEC. 307. COMPLIANCE IMPROVEMENT METHODS.

``(a) In General.--
``(1) Consultation required.--The Director of the Bureau of
Consumer Financial Protection, with the assistance of the
Secretary, the Director of the Bureau of the Census, the
Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, and such other persons as the
Bureau deems appropriate, shall develop or assist in the
improvement of, methods of matching addresses and census
tracts to facilitate compliance by depository institutions in
as economical a manner as possible with the requirements of
this title.
``(2) Authorization of appropriations.--There are
authorized to be appropriated, such sums as may be necessary
to carry out this subsection.
``(3) Contracting authority.--The Director of the Bureau of
Consumer Financial Protection is authorized to utilize,
contract with, act through, or compensate any person or
agency in order to carry out this subsection.
``(b) Recommendations to Congress.--The Director of the
Bureau of Consumer Financial Protection shall recommend to
the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives, such additional legislation as the
Director of the Bureau of Consumer Financial Protection deems
appropriate to carry out the purpose of this title.''.

SEC. 1093. AMENDMENTS TO THE HOMEOWNERS PROTECTION ACT OF
1998.

Section 10 of the Homeowners Protection Act of 1998 (12
U.S.C. 4909) is amended--
(1) in subsection (a)--
(A) by striking ``Compliance'' and inserting ``Except as
otherwise provided by subtitle B of the Consumer Financial
Protection Act of 2010, compliance'';
(B) in paragraph (2), by striking ``and'' at the end;
(C) in paragraph (3), by striking the period at the end and
inserting ``; and''; and
(D) by adding at the end the following:
``(4) subtitle E of the Consumer Financial Protection Act
of 2010, by the Bureau of Consumer Financial Protection.'';
and
(2) in subsection (b)(2), by inserting before the period at
the end the following: ``, subject to subtitle B of the
Consumer Financial Protection Act of 2010''.

SEC. 1094. AMENDMENTS TO THE HOME OWNERSHIP AND EQUITY
PROTECTION ACT OF 1994.

The Home Ownership and Equity Protection Act of 1994 (15
U.S.C. 1601 note) is amended--
(1) in section 158(a), by striking ``Consumer Advisory
Council of the Board'' and inserting ``Advisory Board to the
Bureau''; and
(2) by striking ``Board'' each place that term appears and
inserting ``Bureau''.

SEC. 1095. AMENDMENTS TO THE OMNIBUS APPROPRIATIONS ACT,
2009.

Section 626 of the Omnibus Appropriations Act, 2009 (15
U.S.C. 1638 note) is amended--
(1) by striking subsection (a) and inserting the following:
``(a)(1) The Bureau of Consumer Financial Protection shall
have authority to prescribe rules with respect to mortgage
loans in accordance with section 553 of title 5, United
States Code. Such rulemaking shall relate to unfair or
deceptive acts or practices regarding mortgage loans, which
may include unfair or deceptive acts or practices involving
loan modification and foreclosure rescue services. Any
violation of a rule prescribed under this paragraph shall be
treated as a violation of a rule prohibiting unfair,
deceptive, or abusive acts or practices under the Consumer
Financial Protection Act of 2010 and a violation of a rule
under section 18 of the Federal Trade Commission Act (15
U.S.C. 57a) regarding unfair or deceptive acts or practices.
``(2) The Bureau of Consumer Financial Protection shall
enforce the rules issued under paragraph (1) in the same
manner, by the same means, and with the same jurisdiction,
powers, and duties, as though all applicable terms and
provisions of the Consumer Financial Protection Act of 2010
were incorporated into and made part of this subsection.'';
and
(2) in subsection (b)--
(A) by striking paragraph (1) and inserting the following:
``(1) Except as provided in paragraph (6), in any case in
which the attorney general of a State has reason to believe
that an interest of the residents of the State has been or is
threatened or adversely affected by the engagement of any
person subject to a rule prescribed under subsection (a) in
practices that violate such rule, the State, as parens
patriae, may bring a civil action on behalf of its residents
in an appropriate district court of the United States or
other court of competent jurisdiction--
``(A) to enjoin that practice;
``(B) to enforce compliance with the rule;
``(C) to obtain damages, restitution, or other compensation
on behalf of the residents of the State; or
``(D) to obtain penalties and relief provided under the
Consumer Financial Protection Act of 2010, the Federal Trade
Commission Act, and such other relief as the court deems
appropriate.'';
(B) in paragraphs (2) and (3), by striking ``the primary
Federal regulator'' each time the term appears and inserting
``the Bureau of Consumer Financial Protection or the
Commission, as appropriate'';
(C) in paragraph (3), by inserting ``and subject to
subtitle B of the Consumer Financial Protection Act of
2010,'' after ``paragraph (2),''; and
(D) in paragraph (6), by striking ``the primary Federal
regulator'' each place that term appears and inserting ``the
Bureau of Consumer Financial Protection or the Commission''.

SEC. 1096. AMENDMENTS TO THE REAL ESTATE SETTLEMENT
PROCEDURES ACT.

The Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2601 et seq.) is amended--
(1) in section 3 (12 U.S.C. 2602)--
(A) in paragraph (7), by striking ``and'' at the end;
(B) in paragraph (8), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(9) the term `Bureau' means the Bureau of Consumer
Financial Protection.'';
(2) in section 4 (12 U.S.C. 2603)--
(A) in subsection (a), by striking the first sentence and
inserting the following: ``The Bureau shall publish a single,
integrated disclosure for mortgage loan transactions
(including real estate settlement cost statements) which
includes the disclosure requirements of this title, in
conjunction with the disclosure requirements of the Truth in
Lending Act that, taken together, may apply to a transaction
that is subject to both or either provisions of law. The
purpose of such model disclosure shall be to facilitate
compliance with the disclosure requirements of this title and
the Truth in Lending Act, and to aid the borrower or lessee
in understanding the transaction by utilizing readily
understandable language to simplify the technical nature of
the disclosures.'';
(B) by striking ``Secretary'' each place that term appears
and inserting ``Bureau''; and
(C) by striking ``form'' each place that term appears and
inserting ``forms'';
(3) in section 5 (12 U.S.C. 2604)--
(A) by striking ``Secretary'' each place that term appears
and inserting ``Bureau''; and
(B) in subsection (a), by striking the first sentence and
inserting the following: ``The Bureau shall prepare and
distribute booklets jointly addressing compliance with the
requirements of the Truth in Lending Act and the provisions
of this title, in order to help

[[Page S3259]]

persons borrowing money to finance the purchase of
residential real estate better to understand the nature and
costs of real estate settlement services.'';
(4) in section 6(j)(3) (12 U.S.C. 2605(j)(3))--
(A) by striking ``Secretary'' and inserting ``Bureau''; and
(B) by striking ``, by regulations that shall take effect
not later than April 20, 1991,'';
(5) in section 7(b) (12 U.S.C. 2606(b)) by striking
``Secretary'' and inserting ``Bureau'';
(6) in section 8(d) (12 U.S.C. 2607(d))--
(A) in the subsection heading, by inserting ``Bureau and''
before ``Secretary''; and
(B) by striking paragraph (4), and inserting the following:
``(4) The Bureau, the Secretary, or the attorney general or
the insurance commissioner of any State may bring an action
to enjoin violations of this section. Except, to the extent
that a person is subject to the jurisdiction of the Bureau,
the Secretary, or the attorney general or the insurance
commissioner of any State, the Bureau shall have primary
authority to enforce or administer this section, subject to
subtitle B of the Consumer Financial Protection Act of
2010.''.
(7) in section 10(c) (12 U.S.C. 2609(c) and (d)), by
striking ``Secretary'' and inserting ``Bureau'';
(8) in section 16 (12 U.S.C. 2614), by inserting ``the
Bureau,'' before ``the Secretary'';
(9) in section 18 (12 U.S.C. 2616), by striking
``Secretary'' each place that term appears and inserting
``Bureau''; and
(10) in section 19 (12 U.S.C. 2617)--
(A) in the section heading by striking ``SECRETARY'' and
inserting ``BUREAU'';
(B) by striking ``Secretary'' each place that term appears
and inserting ``Bureau'';
(C) in subsection (b), by inserting ``the Bureau'' before
``the Secretary''; and
(D) in subsection (c), by inserting ``or the Bureau'' after
``the Secretary'' each time that term appears.

SEC. 1097. AMENDMENTS TO THE RIGHT TO FINANCIAL PRIVACY ACT
OF 1978.

The Right to Financial Privacy Act of 1978 (12 U.S.C. 3401
et seq.) is amended--
(1) in section 1101--
(A) in paragraph (6)--
(i) in subparagraph (A), by inserting ``and'' after the
semicolon;
(ii) in subparagraph (B), by striking ``and'' at the end;
and
(iii) by striking subparagraph (C); and
(B) in paragraph (7), by striking subparagraph (E), and
inserting the following:
``(E) the Bureau of Consumer Financial Protection;'';
(2) in section 1112(e) (12 U.S.C. 3412(e)), by striking
``and the Commodity Futures Trading Commission is permitted''
and inserting ``the Commodity Futures Trading Commission, and
the Bureau of Consumer Financial Protection is permitted'';
and
(3) in section 1113 (12 U.S.C. 3413), by adding at the end
the following new subsection:
``(r) Disclosure to the Bureau of Consumer Financial
Protection.--Nothing in this title shall apply to the
examination by or disclosure to the Bureau of Consumer
Financial Protection of financial records or information in
the exercise of its authority with respect to a financial
institution.''.

SEC. 1098. AMENDMENTS TO THE SECURE AND FAIR ENFORCEMENT FOR
MORTGAGE LICENSING ACT OF 2008.

The S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101
et seq.) is amended--
(1) by striking ``a Federal banking agency'' each place
that term appears, other than in paragraphs (7) and (11) of
section 1503 and section 1507(a)(1), and inserting ``the
Bureau'';
(2) by striking ``Federal banking agencies'' each place
that term appears and inserting ``Bureau''; and
(3) by striking ``Secretary'' each place that term appears
and inserting ``Director'';
(4) in section 1503 (12 U.S.C. 5102)--
(A) by redesignating paragraphs (2) through (12) as (3)
through (13), respectively;
(B) by striking paragraph (1) and inserting the following:
``(1) Bureau.--The term `Bureau' means the Bureau of
Consumer Financial Protection.
``(2) Federal banking agency.--The term `Federal banking
agency' means the Board of Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency, the
National Credit Union Administration, and the Federal Deposit
Insurance Corporation.''; and
(C) by striking paragraph (10), as so designated by this
section, and inserting the following:
``(10) Director.--The term `Director' means the Director of
the Bureau of Consumer Financial Protection.''; and
(5) in section 1507 (12 U.S.C. 5106)--
(A) in subsection (a)--
(i) by striking paragraph (1) and inserting the following:
``(1) In general.--The Bureau shall develop and maintain a
system for registering employees of a depository institution,
employees of a subsidiary that is owned and controlled by a
depository institution and regulated by a Federal banking
agency, or employees of an institution regulated by the Farm
Credit Administration, as registered loan originators with
the Nationwide Mortgage Licensing System and Registry. The
system shall be implemented before the end of the 1-year
period beginning on the date of enactment of the Consumer
Financial Protection Act of 2010.''; and
(ii) in paragraph (2)--

(I) by striking ``appropriate Federal banking agency and
the Farm Credit Administration'' and inserting ``Bureau'';
and
(II) by striking ``employees's identity'' and inserting
``identity of the employee''; and

(B) in subsection (b), by striking ``through the Financial
Institutions Examination Council, and the Farm Credit
Administration'', and inserting ``and the Bureau of Consumer
Financial Protection'';
(6) in section 1508 (12 U.S.C. 5107)--
(A) by striking the section heading and inserting the
following: ``SEC. 1508. BUREAU OF CONSUMER FINANCIAL
PROTECTION BACKUP AUTHORITY TO ESTABLISH LOAN ORIGINATOR
LICENSING SYSTEM.''; and
(B) by adding at the end the following:
``(f) Regulation Authority.--
``(1) In general.--The Bureau is authorized to promulgate
regulations setting minimum net worth or surety bond
requirements for residential mortgage loan originators and
minimum requirements for recovery funds paid into by loan
originators.
``(2) Considerations.--In issuing regulations under
paragraph (1), the Bureau shall take into account the need to
provide originators adequate incentives to originate
affordable and sustainable mortgage loans, as well as the
need to ensure a competitive origination market that
maximizes consumer access to affordable and sustainable
mortgage loans.'';
(7) by striking section 1510 (12 U.S.C. 5109) and inserting
the following:

``SEC. 1510. FEES.

``The Bureau, the Farm Credit Administration, and the
Nationwide Mortgage Licensing System and Registry may charge
reasonable fees to cover the costs of maintaining and
providing access to information from the Nationwide Mortgage
Licensing System and Registry, to the extent that such fees
are not charged to consumers for access to such system and
registry.'';
(8) by striking section 1513 (12 U.S.C. 5112) and inserting
the following:

``SEC. 1513. LIABILITY PROVISIONS.

``The Bureau, any State official or agency, or any
organization serving as the administrator of the Nationwide
Mortgage Licensing System and Registry or a system
established by the Director under section 1509, or any
officer or employee of any such entity, shall not be subject
to any civil action or proceeding for monetary damages by
reason of the good faith action or omission of any officer or
employee of any such entity, while acting within the scope of
office or employment, relating to the collection, furnishing,
or dissemination of information concerning persons who are
loan originators or are applying for licensing or
registration as loan originators.''; and
(9) in section 1514 (12 U.S.C. 5113) in the section
heading, by striking ``UNDER HUD BACKUP LICENSING SYSTEM''
and inserting ``BY THE BUREAU''.

SEC. 1099. AMENDMENTS TO THE TRUTH IN LENDING ACT.

The Truth in Lending Act (15 U.S.C. 1601 et seq.) is
amended--
(1) in section 103 (5 U.S.C. 1602)--
(A) by redesignating subsections (b) through (bb) as
subsections (c) through (cc), respectively; and
(B) by inserting after subsection (a) the following:
``(b) Bureau.--The term `Bureau' means the Bureau of
Consumer Financial Protection.'';
(2) by striking ``Board'' each place that term appears,
other than in section 140(d) and section 108(a), as amended
by this section, and inserting ``Bureau'';
(3) by striking ``Federal Trade Commission'' each place
that term appears, other than in section 108(c) and section
129(m), as amended by this Act, and other than in the context
of a reference to the Federal Trade Commission Act, and
inserting ``Bureau'';
(4) in section 105(a) (15 U.S.C. 1604(a)), in the second
sentence--
(A) by striking ``Except in the case of a mortgage referred
to in section 103(aa), these regulations may contain such''
and inserting ``Except with respect to the provisions of
section 129 that apply to a mortgage referred to in section
103(aa), such regulations may contain such additional
requirements,''; and
(B) by inserting ``all or'' after ``exceptions for'';
(5) in section 105(b) (15 U.S.C. 1604(b)), by striking the
first sentence and inserting the following: ``The Bureau
shall publish a single, integrated disclosure for mortgage
loan transactions (including real estate settlement cost
statements) which includes the disclosure requirements of
this title in conjunction with the disclosure requirements of
the Real Estate Settlement Procedures Act of 1974 that, taken
together, may apply to a transaction that is subject to both
or either provisions of law. The purpose of such model
disclosure shall be to facilitate compliance with the
disclosure requirements of this title and the Real Estate
Settlement Procedures Act of 1974, and to aid the borrower or
lessee in understanding the transaction by utilizing readily
understandable language to simplify the technical nature of
the disclosures.'';
(6) in section 105(f)(1) (15 U.S.C. 1604(f)(1)), by
inserting ``all or'' after ``from all or part of this
title'';
(7) in section 108 (15 U.S.C. 1607)--
(A) by striking subsection (a) and inserting the following:

[[Page S3260]]

``(a) Enforcing Agencies.--Except as otherwise provided in
subtitle B of the Consumer Financial Protection Act of 2010,
compliance with the requirements imposed under this title
shall be enforced under--
``(1) section 8 of the Federal Deposit Insurance Act, in
the case of--
``(A) any national bank, and Federal branch or Federal
agency of a foreign bank, by the Office of the Comptroller of
the Currency;
``(B) any member bank of the Federal Reserve System (other
than a national bank), any branch or agency of a foreign bank
(other than a Federal branch, Federal agency, or insured
State branch of a foreign bank), any commercial lending
company owned or controlled by a foreign bank, and
organizations operating under section 25 or 25(a) of the
Federal Reserve Act, by the Board; and
``(C) any bank insured by the Federal Deposit Insurance
Corporation (other than a member of the Federal Reserve
System) and an insured State branch of a foreign bank, by the
Board of Directors of the Federal Deposit Insurance
Corporation;
``(2) subtitle E of the Consumer Financial Protection Act
of 2010, by the Bureau;
``(3) the Federal Credit Union Act, by the Director of the
National Credit Union Administration, with respect to any
Federal credit union;
``(4) the Federal Aviation Act of 1958, by the Secretary of
Transportation, with respect to any air carrier or foreign
air carrier subject to that Act;
``(5) the Packers and Stockyards Act, 1921 (except as
provided in section 406 of that Act), by the Secretary of
Agriculture, with respect to any activities subject to that
Act; and
``(6) the Farm Credit Act of 1971, by the Farm Credit
Administration with respect to any Federal land bank, Federal
land bank association, Federal intermediate credit bank, or
production credit association.''; and
(B) by striking subsection (c) and inserting the following:
``(c) Overall Enforcement Authority of the Federal Trade
Commission.--Except to the extent that enforcement of the
requirements imposed under this title is specifically
committed to some other Government agency under subsection
(a), and subject to subtitle B of the Consumer Financial
Protection Act of 2010, the Federal Trade Commission shall
enforce such requirements. For the purpose of the exercise by
the Federal Trade Commission of its functions and powers
under the Federal Trade Commission Act, a violation of any
requirement imposed under this title shall be deemed a
violation of a requirement imposed under that Act. All of the
functions and powers of the Federal Trade Commission under
the Federal Trade Commission Act are available to the Federal
Trade Commission to enforce compliance by any person with the
requirements under this title, irrespective of whether that
person is engaged in commerce or meets any other
jurisdictional tests under the Federal Trade Commission
Act.'';
(8) in section 129 (15 U.S.C. 1639), by striking subsection
(m) and inserting the following:
``(m) Civil Penalties in Federal Trade Commission
Enforcement Actions.--For purposes of enforcement by the
Federal Trade Commission, any violation of a regulation
issued by the Bureau pursuant to subsection (l)(2) shall be
treated as a violation of a rule promulgated under section 18
of the Federal Trade Commission Act (15 U.S.C. 57a) regarding
unfair or deceptive acts or practices.''; and
(9) in chapter 5 (15 U.S.C. 1667 et seq.)--
(A) by striking ``the Board'' each place that term appears
and inserting ``the Bureau''; and
(B) by striking ``The Board'' each place that term appears
and inserting ``The Bureau''.

SEC. 1100. AMENDMENTS TO THE TRUTH IN SAVINGS ACT.

The Truth in Savings Act (12 U.S.C. 4301 et seq.) is
amended--
(1) by striking ``Board'' each place that term appears and
inserting ``Bureau'';
(2) in section 270(a) (12 U.S.C. 4309)--
(A) by striking ``Compliance'' and inserting ``Except as
otherwise provided in subtitle B of the Consumer Financial
Protection Act of 2010, compliance'';
(B) in paragraph (1)--
(i) in subparagraph (B), by striking ``and'' at the end;
and
(ii) by striking subparagraph (C);
(C) in paragraph (2), by striking the period at the end and
inserting ``; and''; and
(D) by adding at the end the following:
``(3) subtitle E of the Consumer Financial Protection Act
of 2010, by the Bureau.'';
(3) in section 272(b) (12 U.S.C. 4311(b)), by striking
``regulation prescribed by the Board'' each place that term
appears and inserting ``regulation prescribed by the
Bureau''; and
(4) in section 274 (12 U.S.C. 4313), by striking paragraph
(4) and inserting the following:
``(4) Bureau.--The term `Bureau' means the Bureau of
Consumer Financial Protection.''.

SEC. 1101. AMENDMENTS TO THE TELEMARKETING AND CONSUMER FRAUD
AND ABUSE PREVENTION ACT.

(a) Amendments to Section 3.--Section 3 of the
Telemarketing and Consumer Fraud and Abuse Prevention Act (15
U.S.C. 6102) is amended by striking subsections (b) and (c)
and inserting the following:
``(b) Rulemaking Authority.--The Commission shall have
authority to prescribe rules under subsection (a), in
accordance with section 553 of title 5, United States Code.
In prescribing a rule under this section that relates to the
provision of a consumer financial product or service that is
subject to the Consumer Financial Protection Act of 2010,
including any enumerated consumer law thereunder, the
Commission shall consult with the Bureau of Consumer
Financial Protection regarding the consistency of a proposed
rule with standards, purposes, or objectives administered by
the Bureau of Consumer Financial Protection.
``(c) Violations.--Any violation of any rule prescribed
under subsection (a)--
``(1) shall be treated as a violation of a rule under
section 18 of the Federal Trade Commission Act regarding
unfair or deceptive acts or practices; and
``(2) that is committed by a person subject to the Consumer
Financial Protection Act of 2010 shall be treated as a
violation of a rule under section 1031 of that Act regarding
unfair, deceptive, or abusive acts or practices.''.
(b) Amendments to Section 4.--Section 4(d) of the
Telemarketing and Consumer Fraud and Abuse Prevention Act (15
U.S.C. 6103(d)) is amended by inserting after ``Commission''
each place that term appears the following: ``or the Bureau
of Consumer Financial Protection''.
(c) Amendments to Section 5.--Section 5(c) of the
Telemarketing and Consumer Fraud and Abuse Prevention Act (15
U.S.C. 6104(c)) is amended by inserting after ``Commission''
each place that term appears the following: ``or the Bureau
of Consumer Financial Protection''.
(d) Amendment to Section 6.--Section 6 of the Telemarketing
and Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6105)
is amended by adding at the end the following:
``(d) Enforcement by Bureau of Consumer Financial
Protection.--Except as otherwise provided in sections 3(d),
3(e), 4, and 5, and subject to subtitle B of the Consumer
Financial Protection Act of 2010, this Act shall be enforced
by the Bureau of Consumer Financial Protection under subtitle
E of the Consumer Financial Protection Act of 2010.''.

SEC. 1102. AMENDMENTS TO THE PAPERWORK REDUCTION ACT.

(a) Designation as an Independent Agency.--Section 2(5) of
the Paperwork Reduction Act (44 U.S.C. 3502(5)) is amended by
inserting ``the Bureau of Consumer Financial Protection, the
Office of Financial Research,'' after ``the Securities and
Exchange Commission,''.
(b) Comparable Treatment.--Section 3513 of title 44, United
States Code, is amended by adding at the end the following:
``(c) Comparable Treatment.--Notwithstanding any other
provision of law, the Director shall treat or review a rule
or order prescribed or proposed by the Director of the Bureau
of Consumer Financial Protection on the same terms and
conditions as apply to any rule or order prescribed or
proposed by the Board of Governors of the Federal Reserve
System.''.

SEC. 1103. ADJUSTMENTS FOR INFLATION IN THE TRUTH IN LENDING
ACT.

(a) Caps.--
(1) Credit transactions.--Section 104(3) of the Truth in
Lending Act (15 U.S.C. 1603(3)) is amended by striking
``$25,000'' and inserting ``$50,000''.
(2) Consumer leases.--Section 181(1) of the Truth in
Lending Act (15 U.S.C. 1667(1)) is amended by striking
``$25,000'' and inserting ``$50,000''.
(b) Adjustments for Inflation.--On and after December 31,
2011, the Bureau may adjust annually the dollar amounts
described in sections 104(3) and 181(1) of the Truth in
Lending Act (as amended by this section), by the annual
percentage increase in the Consumer Price Index for Urban
Wage Earners and Clerical Workers, as published by the Bureau
of Labor Statistics, rounded to the nearest multiple of $100,
or $1,000, as applicable.

SEC. 1104. EFFECTIVE DATE.

Except as otherwise provided in this subtitle and the
amendments made by this subtitle, this subtitle and the
amendments made by this subtitle, other than sections 1081
and 1082, shall become effective on the designated transfer
date.
______

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''.....

______

SA 3833. Mrs. HUTCHISON 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:

At the appropriate place, insert the following:

SEC. _. SHAREHOLDER REGISTRATION THRESHOLD.

(a) Amendments to the Securities Exchange Act of 1934.--
(1) Section 12.--Section 12(g) of the Securities Exchange
Act of 1934 (15 U.S.C. 781(g)) is amended--
(A) in paragraph (1)--
(i) by striking subparagraphs (A) and (B) and inserting the
following:
``(A) in the case of an issuer that is a bank, as such term
is defined in section 3(a)(6) of this title, or a bank
holding company, as such term is defined in section (2) of
the Bank Holding Company Act of 1956 (12 U.S.C. 1841), 2000
persons or more; and
``(B) in the case of an issuer that is not a bank or bank
holding company, 500 persons or more,''; and
(ii) by striking ``commerce shall'' and inserting
``commerce shall, not later than 120 days after the last day
of its first fiscal year ended after the effective date of
this subsection, on which the issuer has total assets
exceeding $10,000,000 and a class of equity security (other
than an exempted security) held of record by''; and
(B) in paragraph (4), by striking ``three hundred'' and
inserting ``300 persons, or, in the case of a bank, as such
term is defined in section 3(a)(6) of this title, or a bank
holding company, as such term is defined in section (2) of
the Bank Holding Company Act of 1956 (12 U.S.C. 1841),
1200''.
(2) Section 15.--Section 15(d) of the Securities Exchange
Act of 1934 (15 U.S.C. 78o(d)) is amended, in the third
sentence, by striking ``three hundred'' and inserting ``300
persons, or, in the case of bank, as such term is defined in
section 3(a)(6) of this title, or a bank holding company, as
such term is defined in section (2) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841), 1200''.
(b) Study of Registration Thresholds.--
(1) Study.--
(A) Analysis required.--The Chief Economist and Director of
the Division of Corporation Finance of the Commission shall
jointly conduct a study, including a cost-benefit analysis,
of shareholder registration thresholds.
(B) Costs and benefits.--The cost-benefit analysis under
subparagraph (A) shall take into account--
(i) the incremental benefits to investors of the increased
disclosure that results from registration;
(ii) the incremental costs to issuers associated with
registration and reporting requirements; and
(iii) the incremental administrative costs to the
Commission associated with different thresholds.
(C) Thresholds.--The cost-benefit analysis under
subparagraph (A) shall evaluate whether it is advisable to--
(i) increase the asset threshold;
(ii) index the asset threshold to a measure of inflation;
(iii) increase the shareholder threshold;
(iv) change the shareholder threshold to be based on the
number of beneficial owners; and
(v) create new thresholds based on other criteria.
(2) Report.--Not later than 2 years after the date of
enactment of this Act, the Chief Economist and the Director
of the Division of Corporation Finance of the Commission
shall jointly submit to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives a report
that includes--
(A) the findings of the study required under paragraph (1);
and
(B) recommendations for statutory changes to improve the
shareholder registration thresholds.
(c) Rulemaking.--Not later than one year after the date of
enactment of this Act, the Commission shall issue final
regulations to implement this section and the amendments made
by this section.
______

SA 3834. Mr. CORKER (for himself, Mr. Gregg, Mr. Isakson, and Mr.
LeMieux) 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:

On page 1045, strike line 12 and all that follows through
``SEC. 942.'' on page 1052, line 3, and insert the following:
(b) Study on Risk Retention.--
(1) Study.--
(A) In general.--The Board of Governors, in coordination
and consultation with the Comptroller of the Currency, the
Corporation, the Federal Housing Finance Agency, and the
Commission, shall conduct a study of the asset-backed
securitization process.
(B) Issues to be studied.--In conducting the study under
subparagraph (A), the Board of Governors shall evaluate--
(i) the separate and combined impact of--

(I) requiring loan originators or securitizers to retain an
economic interest in a portion of the credit risk for any
asset that the securitizer, through the issuance of an asset-
backed security, transfers, sells, or conveys to a third
party; including--

(aa) whether existing risk retention requirements such as
contractual representations and warranties, and statutory and
regulatory underwriting and consumer protection requirements
are sufficient to ensure the long-term accountability of
originators for loans they originate; and

[[Page S3263]]

(bb) methodologies for establishing additional statutory
credit risk retention requirements;

(II) the Financial Accounting Statements 166 and 167 issued
by the Financial Accounting Standards Board, as well as any
other statements issued before or after the date of enactment
of this section the Federal banking agencies determine to be
relevant;

(ii) the impact of the factors described under subsection
(i) of this section on--

(I) different classes of assets, such as residential
mortgages, commercial mortgages, commercial loans, auto
loans, and other classes of assets;
(II) loan originators;
(III) securitizers;
(IV) access of consumers and businesses to credit on
reasonable terms.

(2) Report.--Not later than 18 months after the date of
enactment of this section, the Board of Governors shall
submit to Congress a report on the study conducted under
paragraph (1). Such report shall include statutory and
regulatory recommendations for eliminating any negative
impacts on the continued viability of the asset-backed
securitization markets and on the availability of credit for
new lending identified by the study conducted under paragraph
(1).

SEC. 942. RESIDENTIAL MORTGAGE UNDERWRITING STANDARDS.

(a) Standards Established.--Notwithstanding any other
provision of this Act or any other provision of Federal,
State, or local law, the Federal banking agencies, in
consultation with the Federal Housing Finance Agency and the
Department of Housing and Urban Development, shall jointly
establish specific minimum standards for mortgage
underwriting, including--
(1) a requirement that the mortgagee verify and document
the income and assets relied upon to qualify the mortgagor on
the residential mortgage, including the previous employment
and credit history of the mortgagor;
(2) a down payment requirement that--
(A) is equal to not less than 5 percent of the purchase
price of the property securing the residential mortgage; and
(B) in the case of a first lien residential mortgage loan
with an initial loan to value ratio that is more than 80
percent and not more than 95 percent, includes a requirement
for credit enhancements, as defined by the Federal banking
agencies, until the loan to value ratio of the residential
mortgage loan amortizes to a value that is less than 80
percent of the purchase price;
(3) a method for determining the ability of the mortgagor
to repay the residential mortgage that is based on factors
including--
(A) all terms of the residential mortgage, including
principal payments that fully amortize the balance of the
residential mortgage over the term of the residential
mortgage; and
(B) the debt to income ratio of the mortgagor; and
(4) any other specific standards the Federal banking
agencies jointly determine are appropriate to ensure prudent
underwriting of residential mortgages.
(b) Updates to Standards.--The Federal banking agencies, in
consultation with the Federal Housing Finance Agency and the
Department of Housing and Urban Development--
(1) shall review the standards established under this
section not less frequently than every 5 years; and
(2) based on the review under paragraph (1), may revise the
standards established under this section, as the Federal
banking agencies, in consultation with the Federal Housing
Finance Agency and the Department of Housing and Urban
Development, determine to be necessary.
(c) Compliance.--It shall be a violation of Federal law--
(1) for any mortgage loan originator to fail to comply with
the minimum standards for mortgage underwriting established
under subsection (a) in originating a residential mortgage
loan;
(2) for any company to maintain an extension of credit on a
revolving basis to any person to fund a residential mortgage
loan, unless the company reasonably determines that the
residential mortgage loan funded by such credit was subject
to underwriting standards no less stringent than the minimum
standards for mortgage underwriting established under
subsection (a); or
(3) for any company to purchase, fund by assignment, or
guarantee a residential mortgage loan, unless the company
reasonably determines that the residential mortgage loan was
subject to underwriting standards no less stringent than the
minimum standards for mortgage underwriting established under
subsection (a).
(d) Implementation.--
(1) Regulations required.--The Federal banking agencies, in
consultation with the Federal Housing Finance Agency, shall
issue regulations to implement subsections (a) and (c), which
shall take effect not later than 270 days after the date of
enactment of this Act.
(2) Report required.--If the Federal banking agencies have
not issued final regulations under subsections (a) and (c)
before the date that is 270 days after the date of enactment
of this Act, the Federal banking agencies shall jointly
submit to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives a report that--
(A) explains why final regulations have not been issued
under subsections (a) and (c); and
(B) provides a timeline for the issuance of final
regulations under subsections (a) and (c).
(e) Enforcement.--Compliance with the rules issued under
this section shall be enforced by--
(1) the primary financial regulatory agency of an entity,
with respect to an entity subject to the jurisdiction of a
primary financial regulatory agency, in accordance with the
statutes governing the jurisdiction of the primary financial
regulatory agency over the entity and as if the action of the
primary financial regulatory agency were taken under such
statutes; and
(2) the Bureau, with respect to a company that is not
subject to the jurisdiction of a primary financial regulatory
agency.
(f) Rule of Construction.--Nothing in this section may be
construed to permit the Federal National Mortgage Association
or the Federal Home Loan Mortgage Corporation to make or
guarantee a residential mortgage loan that does not meet the
minimum underwriting standards established under this
section.
(g) Definitions.--In this section, the following
definitions shall apply:
(1) Company.--The term ``company''--
(A) has the same meaning as in section 2(b) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841(b)); and
(B) includes a sole proprietorship.
(2) Mortgage loan originator.--The term ``mortgage loan
originator'' means any company that takes residential
mortgage loan applications and offers or negotiates terms of
residential mortgage loans.
(3) Residential mortgage loan.--The term ``residential
mortgage loan''--
(A) means any extension of credit primarily for personal,
family, or household use that is secured by a mortgage, deed
of trust, or other equivalent security interest in a dwelling
or residential real estate upon which is constructed or
intended to be constructed a dwelling; and
(B) does not include a mortgage loan for which mortgage
insurance is provided by the Veterans Administration, the
Federal Housing Administration, or the Rural Housing
Administration.
(4) Extension of credit; dwelling.--The terms ``extension
of credit'' and ``dwelling'' shall have the same meaning as
in section 103 of the Truth in Lending Act (15 U.S.C. 1602).

SEC. 943.

______

SA 3835. Mr. CORKER 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:

On page 1290, between lines 4 and 5, insert the following:
(s) No Authority Over Underwriting Standards for
Residential Mortgage Loans.--
(1) Rule of construction.--Nothing in this title may be
construed as conferring authority on the Bureau to exercise
any rulemaking or other authority for matters pertaining to
underwriting standards with respect to residential mortgage
loans, except as otherwise authorized under section 1024.
(2) Definitions.--For purposes of this subsection--
(A) the term ``residential mortgage loan'' means any
extension of credit primarily for personal, family, or
household use that is secured by a mortgage, deed of trust,
or other equivalent security interest in a dwelling or
residential real estate upon which is constructed or intended
to be constructed a dwelling; and
(B) the terms ``credit'' and ``dwelling'' have the same
meanings as in section 103 of the Truth in Lending Act (15
U.S.C. 1602).
______

SA 3836. Mr. CORKER 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:

On page 61, after line 24, add the following:

SEC. 122. COUNCIL REVIEW OF MEMBER AGENCY RULES.

(a) In General.--The Council shall conduct a review of each
rule or regulation that a member agency intends to propose
relating to capital, liquidity, or leverage requirements for,
or restrictions on the activities of, an entity regulated by
the member agency. The Council shall consider international
regulatory rules in conducting a review under this
subsection.

[[Page S3264]]

(b) Process.--
(1) In general.--Each member agency shall submit to the
Council for a binding decision an advanced notice of proposed
rulemaking and any other proposed or final rule or regulation
that proposes changes to capital, liquidity, or leverage
requirements or activity restrictions for a financial company
that is subject to regulation by the member agency.
(2) Standard for review.--In making a determination under
this subsection, the members of the Council shall consider
the safety and soundness of financial institutions and the
stability of the financial system of the United States.
(c) Timing.--Not later than 60 days after the date on which
the Council receives a notice under subsection (b), the
Council shall make a determination of whether to approve the
issuance of the proposed rule or regulation that is the
subject of the notice.
(d) Approval Required.--No rule or regulation described in
subsection (b) may become effective or enforceable, unless
approved by the Council under this section.
(e) Public Notice.--The Council shall make public any
notice of proposed rulemaking or other notice of a rule or
regulation submitted by a member agency under this section.
______

SA 3837. Mr. CORKER 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:

On page 1236, line 4 strike ``(3)'' and insert the
following:
``(3) FFIEC review of bureau regulations.--The Federal
Financial Institutions Examination Council shall review each
regulation prescribed by the Bureau prior to its effective
date, and unless approved by the Federal Financial
Institutions Examination Council, by majority vote, such
regulation shall not become effective.
``(4)''.
______

SA 3838. Mr. BROWN of Massachusetts (for himself, Mrs. Shaheen, and
Mr. Gregg) 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:

On page 295, between lines 19 and 20, insert the following:
(s) Treatment of Certain Nonbank Financial Companies Not
Subject to Orderly Liquidation.--
(1) In general.--Subsections (n) and (o) shall not apply to
any nonbank financial company that is subject to liquidation
or rehabilitation under State law, unless such company--
(A) is determined to be a nonbank financial company
supervised by the Board of Governors pursuant to section 113;
or
(B) is determined by the Corporation to have benefitted
financially from the orderly liquidation of a covered
financial company and the use of the Fund under this title by
receiving payments or credit pursuant to subsection (b)(4),
(d)(4), or (h)(5)(E).
(2) Exclusion of assets.--Any assets of a nonbank financial
company described in paragraph (1) shall be excluded for
purposes of calculating a financial company's total
consolidated assets under subsection (o).
______

SA 3839. Mr. McCAIN (for himself, Mr. Shelby, Mr. Gregg, Mr. Bennett,
Mr. Crapo, and Mr. Corker) 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 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:

=========================== NOTE ===========================

On page S3264, May 5, 2010, in the second column, the following
appears: SA 3839. Mr. McCAIN (for himself, Mrs. Shaheen, Mr.
Gregg, Mr. Bennett, Mr. Crapo, and Mr. Corker) 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,

The online version has been corrected to read: SA 3839. Mr.
McCAIN (for himself, Mr. Shelby, Mr. Gregg, Mr. Bennett, Mr.
Crapo, and Mr. Corker) 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,

========================= END NOTE =========================

At the end of the bill, add the following:

TITLE XIII--ENHANCED REGULATION OF GOVERNMENT-SPONSORED ENTERPRISES

Subtitle A--GSE Bailout Elimination and Taxpayer Protection

SECTION 1311. SHORT TITLE.

This subtitle may be cited as the ``GSE Bailout Elimination
and Taxpayer Protection Act''.

SEC. 1312. DEFINITIONS.

For purposes of this subtitle, the following definitions
shall apply:
(1) Charter.--The term ``charter'' means--
(A) with respect to the Federal National Mortgage
Association, the Federal National Mortgage Association
Charter Act (12 U.S.C. 1716 et seq.); and
(B) with respect to the Federal Home Loan Mortgage
Corporation, the Federal Home Loan Mortgage Corporation Act
(12 U.S.C. 1451 et seq.).
(2) Director.--The term ``Director'' means the Director of
the Federal Housing Finance Agency.
(3) Enterprise.--The term ``enterprise'' means--
(A) the Federal National Mortgage Association; and
(B) the Federal Home Loan Mortgage Corporation.
(4) Guarantee.--The term ``guarantee'' means, with respect
to an enterprise, the credit support of the enterprise that
is provided by the Federal Government through its charter as
a government-sponsored enterprise.

SEC. 1313. TERMINATION OF CURRENT CONSERVATORSHIP.

(a) In General.--Upon the expiration of the period referred
to in subsection (b), the Director of the Federal Housing
Finance Agency shall determine, with respect to each
enterprise, if the enterprise is financially viable at that
time and--
(1) if the Director determines that the enterprise is
financially viable, immediately take all actions necessary to
terminate the conservatorship for the enterprise that is in
effect pursuant to section 1367 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4617); or
(2) if the Director determines that the enterprise is not
financially viable, immediately appoint the Federal Housing
Finance Agency as receiver under section 1367 of the Federal
Housing Enterprises Financial Safety and Soundness Act of
1992 and carry out such receivership under the authority of
such section.
(b) Timing.--The period referred to in this subsection is,
with respect to an enterprise--
(1) except as provided in paragraph (2), the 24-month
beginning upon the date of the enactment of this Act; or
(2) if the Director determines before the expiration of the
period referred to in paragraph (1) that the financial
markets would be adversely affected without the extension of
such period under this paragraph with respect to that
enterprise, and upon making such determination notifies the
Congress in writing of such determination, the 30-month
period beginning upon the date of the enactment of this Act.
(c) Financial Viability.--The Director may not determine
that an enterprise is financially viable for purposes of
subsection (a) if the Director determines that any of the
conditions for receivership set forth in paragraph (3) or (4)
of section 1367(a) of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C.
4617(a)) exists at the time with respect to the enterprise.

SEC. 1314. LIMITATION OF ENTERPRISE AUTHORITY UPON EMERGENCE
FROM CONSERVATORSHIP.

(a) Revised Authority.--Upon the expiration of the period
referred to in section 1113(b), if the Director makes the
determination under section 1113(a)(1), the following
provisions shall take effect:
(1) Repeal of housing goals.--
(A) Repeal.--The Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 is amended by striking
sections 1331 through 1336 (12 U.S.C. 4561-6).
(B) Conforming amendments.--Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 is amended--
(i) in section 1303(28) (12 U.S.C. 4502(28)), by striking
``and, for the purposes'' and all that follows through
``designated disaster areas'';
(ii) in section 1324(b)(1)(A) (12 U.S.C. 4544(b)(1)(A))--

(I) by striking clauses (i), (ii), and (iv);
(II) in clause (iii), by inserting ``and'' after the
semicolon at the end; and
(III) by redesignating clauses (iii) and (v) as clauses (i)
and (ii), respectively;

(iii) in section 1338(c)(10) (12 U.S.C. 4568(c)(10)), by
striking subparagraph (E);
(iv) in section 1339(h) (12 U.S.C. 4569), by striking
paragraph (7);
(v) in section 1341 (12 U.S.C. 4581)--

(I) in subsection (a)--

(aa) in paragraph (1), by inserting ``or'' after the
semicolon at the end;
(bb) in paragraph (2), by striking the semicolon at the end
and inserting a period; and
(cc) by striking paragraphs (3) and (4); and

(II) in subsection (b)(2)--

(aa) in subparagraph (A), by inserting ``or'' after the
semicolon at the end;
(bb) by striking subparagraphs (B) and (C); and
(cc) by redesignating subparagraph (D) as subparagraph (B);
(vi) in section 1345(a) (12 U.S.C. 4585(a))--

(I) in paragraph (1), by inserting ``or'' after the
semicolon at the end;
(II) in paragraph (2), by striking the semicolon at the end
and inserting a period; and
(III) by striking paragraphs (3) and (4); and

(vii) in section 1371(a)(2) (12 U.S.C. 4631(a)(2))--

(I) by striking ``with any housing goal established under
subpart B of part 2 of subtitle A of this title,''; and
(II) by striking ``section 1336 or''.

[[Page S3265]]

(2) Portfolio limitations.--Subtitle B of title XIII of the
Housing and Community Development Act of 1992 (12 U.S.C. 4611
et seq.) is amended by adding at the end the following new
section:

``SEC. 1369E. RESTRICTION ON MORTGAGE ASSETS OF ENTERPRISES.

``(a) Restriction.--No enterprise shall own, as of any
applicable date in this subsection or thereafter, mortgage
assets in excess of--
``(1) upon the expiration of the period referred to in
section 1113(b) of the GSE Bailout Elimination and Taxpayer
Protection Act or thereafter, 95 percent of the aggregate
amount of mortgage assets that the regulated entity owned on
December 31 of the previous year, provided, that in no event
shall the regulated entity be required under this paragraph
to own less than $250,000,000,000 in mortgage assets;
``(2) upon the expiration of the 1-year period that begins
on the date described in paragraph (1) or thereafter, 75
percent of the aggregate amount of mortgage assets that the
regulated entity owned in section 1113(b) of the GSE Bailout
Elimination and Taxpayer Protection Act, provided, that in no
event shall the regulated entity be required under this
paragraph to own less than $250,000,000,000 in mortgage
assets;
``(3) upon the expiration of the 2-year period that begins
on the date described in paragraph (1) or thereafter, 75
percent of the aggregate amount of mortgage assets that the
regulated entity owned upon the expiration of the 1-year
period that begins on the date described in paragraph (1),
provided, that in no event shall the regulated entity be
required under this paragraph to own less than
$250,000,000,000 in mortgage assets; and
``(4) upon the expiration of the 3-year period that begins
on the date described in paragraph (1), $250,000,000,000.
``(b) Definition of Mortgage Assets.--For purposes of this
section, the term `mortgage assets' means, with respect to an
enterprise, assets of such enterprise consisting of
mortgages, mortgage loans, mortgage-related securities,
participation certificates, mortgage-backed commercial paper,
obligations of real estate mortgage investment conduits and
similar assets, in each case to the extent such assets would
appear on the balance sheet of such enterprise in accordance
with generally accepted accounting principles in effect in
the United States as of September 7, 2008 (as set forth in
the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the
Financial Accounting Standards Board from time to time; and
without giving any effect to any change that may be made
after September 7, 2008, in respect of Statement of Financial
Accounting Standards No. 140 or any similar accounting
standard).''.
(3) Increase in minimum capital requirement.--Section 1362
of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4612), as amended by section
1111 of the Housing and Economic Recovery Act of 2008 (Public
Law 110-289), is amended--
(A) in subsection (a), by striking ``For purposes of this
subtitle, the minimum capital level for each enterprise shall
be'' and inserting ``The minimum capital level established
under subsection (g) for each enterprise may not be lower
than'';
(B) in subsection (c)--
(i) by striking ``subsections (a) and'' and inserting
``subsection'';
(ii) by striking ``regulated entities'' the first place
such term appears and inserting ``Federal Home Loan Banks'';
(iii) by striking ``for the enterprises,'';
(iv) by striking ``, or for both the enterprises and the
banks,'';
(v) by striking ``the level specified in subsection (a) for
the enterprises or''; and
(vi) by striking ``the regulated entities operate'' and
inserting ``such banks operate'';
(C) in subsection (d)(1)--
(i) by striking ``subsections (a) and'' and inserting
``subsection''; and
(ii) by striking ``regulated entity'' each place such term
appears and inserting ``Federal home loan bank'';
(D) in subsection (e), by striking ``regulated entity''
each place such term appears and inserting ``Federal home
loan bank'';
(E) in subsection (f)--
(i) by striking ``the amount of core capital maintained by
the enterprises,''; and
(ii) by striking ``regulated entities'' and inserting
``banks''; and
(F) by adding at the end the following new subsection:
``(g) Establishment of Revised Minimum Capital Levels.--
``(1) In general.--The Director shall cause the enterprises
to achieve and maintain adequate capital by establishing
minimum levels of capital for such the enterprises and by
using such other methods as the Director deems appropriate.
``(2) Authority.--The Director shall have the authority to
establish such minimum level of capital for an enterprise in
excess of the level specified under subsection (a) as the
Director, in the Director's discretion, deems to be necessary
or appropriate in light of the particular circumstances of
the enterprise.
``(h) Failure To Maintain Revised Minimum Capital Levels.--
``(1) Unsafe and unsound practice or condition.--Failure of
a enterprise to maintain capital at or above its minimum
level as established pursuant to subsection (g) of this
section may be deemed by the Director, in his discretion, to
constitute an unsafe and unsound practice or condition within
the meaning of this title.
``(2) Directive to achieve capital level.--
``(A) Authority.--In addition to, or in lieu of, any other
action authorized by law, including paragraph (1), the
Director may issue a directive to an enterprise that fails to
maintain capital at or above its required level as
established pursuant to subsection (g) of this section.
``(B) Plan.--Such directive may require the enterprise to
submit and adhere to a plan acceptable to the Director
describing the means and timing by which the enterprise shall
achieve its required capital level.
``(C) Enforcement.--Any such directive issued pursuant to
this paragraph, including plans submitted pursuant thereto,
shall be enforceable under the provisions of subtitle C of
this title to the same extent as an effective and outstanding
order issued pursuant to subtitle C of this title which has
become final.
``(3) Adherence to plan.--
``(A) Consideration.--The Director may consider such
enterprise's progress in adhering to any plan required under
this subsection whenever such enterprise seeks the requisite
approval of the Director for any proposal which would divert
earnings, diminish capital, or otherwise impede such
enterprise's progress in achieving its minimum capital level.
``(B) Denial.--The Director may deny such approval where it
determines that such proposal would adversely affect the
ability of the enterprise to comply with such plan.''.
(4) Repeal of increases to conforming loan limits.--
(A) Repeal of temporary increases.--
(i) Continuing appropriations resolution, 2010.--Section
167 of the Continuing Appropriations Resolution, 2010 (as
added by section 104 of division B of Public Law 111-88; 123
Stat. 2973) is hereby repealed.
(ii) American recovery and reinvestment act of 2009.--
Section 1203 of division A of the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 225) is
hereby repealed.
(iii) Economic stimulus act of 2008.--Section 201 of the
Economic Stimulus Act of 2008 (Public Law 110-185; 122 Stat.
619) is hereby repealed.
(B) Repeal of general limit and permanent high-cost area
increase.--Paragraph (2) of section 302(b) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1717(b)(2)) and paragraph (2) of section 305(a) of the
Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2)) are each amended to read as such sections were in
effect immediately before the enactment of the Housing and
Economic Recovery Act of 2008 (Public Law 110-289).
(C) Repeal of new housing price index.--Section 1322 of the
Federal Housing Enterprises Financial Safety and Soundness
Act of 1992, as added by section 1124(d) of the Housing and
Economic Recovery Act of 2008 (Public Law 110-289), is hereby
repealed.
(D) Repeal.--Section 1124 of the Housing and Economic
Recovery Act of 2008 (Public Law 110-289) is hereby repealed.
(E) Establishment of conforming loan limit.--For the year
in which the expiration of the period referred to in section
1113(b) occurs, the limitations governing the maximum
original principal obligation of conventional mortgages that
may be purchased by the Federal National Mortgage Association
and the Federal Home Loan Mortgage Corporation, referred to
in section 302(b)(2) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1717(b)(2)) and section
305(a)(2) of the Federal Home Loan Mortgage Corporation Act
(12 U.S.C. 1454(a)(2)), respectively, shall be considered to
be--
(i) $417,000 for a mortgage secured by a single-family
residence,
(ii) $533,850 for a mortgage secured by a 2-family
residence,
(iii) $645,300 for a mortgage secured by a 3-family
residence, and
(iv) $801,950 for a mortgage secured by a 4-family
residence,
and such limits shall be adjusted effective each January 1
thereafter in accordance with such sections 302(b)(2) and
305(a)(2).
(F) Prohibition of purchase of mortgages exceeding median
area home price.--
(i) Fannie mae.--Section 302(b)(2) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) is
amended by adding at the end the following new sentence:
``Notwithstanding any other provision of this title, the
corporation may not purchase any mortgage asset for a
property having a principal obligation that exceeds the
median home price, for properties of the same size, for the
area in which such property subject to the mortgage is
located.''.
(ii) Freddie mac.--Section 305(a)(2) of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is
amended by adding at the end the following new sentence:
``Notwithstanding any other provision of this title, the
Corporation may not purchase any mortgage for a property
having a principal obligation that exceeds the median home
price, for properties of the same size, for the area in which
such property subject to the mortgage is located.''.
(5) Requirement of minimum down payment for mortgages
purchased.--

[[Page S3266]]

(A) Fannie mae.--Subsection (b) of section 302 of the
Federal National Mortgage Association Charter Act (12 U.S.C.
1717(b)) is amended by adding at the end the following new
paragraph:
``(7) Notwithstanding any other provision of this Act, the
corporation may not newly purchase any mortgage asset, unless
the mortgagor has paid, in cash or its equivalent on account
of the property securing repayment such mortgage, in
accordance with regulations issued by the Director of the
Federal Housing Finance Agency, not less than--
``(A) for any mortgage purchased during the 12-month period
beginning upon the expiration of the period referred to in
section 1113(b) of the GSE Bailout Elimination and Taxpayer
Protection Act, 5 percent of the appraised value of the
property;
``(B) for any mortgage purchased during the 12-month period
beginning upon the expiration of the 12-month period referred
to in subparagraph (A) of this paragraph, 7.5 percent of the
appraised value of the property; and
``(C) for any mortgage purchased during the 12-month period
beginning upon the expiration of the 12-month period referred
to in subparagraph (B) of this paragraph, 10 percent of the
appraised value of the property.''.
(B) Freddie mac.--Subsection (a) of section 305 of the
Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)) is amended by adding at the end the following new
paragraph:
``(6) Notwithstanding any other provision of this Act, the
Corporation may not newly purchase any mortgage asset, unless
the mortgagor has paid, in cash or its equivalent on account
of the property securing repayment such mortgage, in
accordance with regulations issued by the Director of the
Federal Housing Finance Agency, not less than--
``(A) for any mortgage purchased during the 12-month period
beginning upon the expiration of the period referred to in
section 1113(b) of the GSE Bailout Elimination and Taxpayer
Protection Act, 5 percent of the appraised value of the
property;
``(B) for any mortgage purchased during the 12-month period
beginning upon the expiration of the 12-month period referred
to in subparagraph (A) of this paragraph, 7.5 percent of the
appraised value of the property; and
``(C) for any mortgage purchased during the 12-month period
beginning upon the expiration of the 12-month period referred
to in subparagraph (B) of this paragraph, 10 percent of the
appraised value of the property.''.
(6) Minimum prudent underwriting standards.--The Federal
Housing Finance Agency shall, not later than 6 months after
the date of enactment of this Act, issue regulations
specifying minimum prudent underwriting standards for
residential mortgage loans eligible for purchase by an
enterprise, which regulations shall include minimum
requirements for--
(A) verification and documentation of income and assets
relied upon to qualify the obligor on the loan;
(B) determination of the ability of the obligor to repay,
based on all terms of the loan, including principal payments
that fully amortize the balance over the term of the loan;
and
(C) any other standards that the Federal Housing Finance
Agency determines appropriate to ensure prudent underwriting
and which effect the safety and soundness of the regulated
entities.
(7) Requirement to pay state and local taxes.--
(A) Fannie mae.--Paragraph (2) of section 309(c) of the
Federal National Mortgage Association Charter Act (12 U.S.C.
1723a(c)(2)) is amended--
(i) by striking ``shall be exempt from'' and inserting
``shall be subject to''; and
(ii) by striking ``except that any'' and inserting ``and
any''.
(B) Freddie mac.--Section 303(e) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1452(e)) is amended--
(i) by striking ``shall be exempt from'' and inserting
``shall be subject to''; and
(ii) by striking ``except that any'' and inserting ``and
any''.
(8) Repeals relating to registration of securities.--
(A) Fannie mae.--
(i) Mortgage-backed securities.--Section 304(d) of the
Federal National Mortgage Association Charter Act (12 U.S.C.
1719(d)) is amended by striking the fourth sentence.
(ii) Subordinate obligations.--Section 304(e) of the
Federal National Mortgage Association Charter Act (12 U.S.C.
1719(e)) is amended by striking the fourth sentence.
(B) Freddie mac.--Section 306 of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1455) is amended by
striking subsection (g).
(9) Recoupment of costs for federal guarantee.--
(A) Assessments.--The Director of the Federal Housing
Finance Agency shall establish and collect from each
enterprise assessments in the amount determined under
subparagraph (B). In determining the method and timing for
making such assessments, the Director shall take into
consideration the determinations and conclusions of the study
under subsection (b) of this section.
(B) Determination of costs of guarantee.--Assessments under
subparagraph (A) with respect to an enterprise shall be in
such amount as the Director determines necessary to recoup to
the Federal Government the full value of the benefit the
enterprise receives from the guarantee provided by the
Federal Government for the obligations and financial
viability of the enterprise, based upon the dollar value of
such benefit in the market to such enterprise when not
operating under conservatorship or receivership. To determine
such amount, the Director shall establish a risk-based
pricing mechanism as the Director considers appropriate,
taking into consideration the determinations and conclusions
of the study under subsection (b).
(C) Treatment of recouped amounts.--The Director shall
cover into the general fund of the Treasury any amounts
received from assessments made under this paragraph.
(b) GAO Study Regarding Recoupment of Costs for Federal
Government Guarantee.--The Comptroller General of the United
States shall conduct a study to determine a risk-based
pricing mechanism to accurately determine the value of the
benefit the enterprises receive from the guarantee provided
by the Federal Government for the obligations and financial
viability of the enterprises. Such study shall establish a
dollar value of such benefit in the market to each enterprise
when not operating under conservatorship or receivership,
shall analyze various methods of the Federal Government
assessing a charge for such value received (including methods
involving an annual fee or a fee for each mortgage purchased
or securitized), and shall make a recommendation of the best
such method for assessing such charge. Not later than 12
months after the date of enactment of this Act, the
Comptroller General shall submit to the Congress a report
setting forth the determinations and conclusions of such
study.

SEC. 1315. REQUIRED WIND DOWN OF OPERATIONS AND DISSOLUTION
OF ENTERPRISE.

(a) Applicability.--This section shall apply to an
enterprise upon the expiration of the 3-year period referred
to in section 1113(b).
(b) Repeal of Charter.--Upon the applicability of this
section to an enterprise, the charter for the enterprise is
repealed and the enterprise shall have no authority to
conduct new business under such charter, except that the
provisions of such charter in effect immediately before such
repeal shall continue to apply with respect to the rights and
obligations of any holders of outstanding debt obligations
and mortgage-backed securities of the enterprise.
(c) Wind Down.--Upon the applicability of this section to
an enterprise, the Director and the Secretary of the Treasury
shall jointly take such action, and may prescribe such
regulations and procedures, as may be necessary to wind down
the operations of an enterprise as an entity chartered by the
United States Government over the duration of the 10-year
period beginning upon the applicability of this section to
the enterprise (pursuant to subsection (a)) in an orderly
manner consistent with this subtitle and the ongoing
obligations of the enterprise.
(d) Division of Assets and Liabilities; Authority To
Establish Holding Corporation and Dissolution Trust Fund.--
The action and procedures required under subsection (c)--
(1) shall include the establishment and execution of plans
to provide for an equitable division and distribution of
assets and liabilities of the enterprise, including any
liability of the enterprise to the United States Government
or a Federal reserve bank that may continue after the end of
the period described in subsection (a); and
(2) may provide for establishment of--
(A) a holding corporation organized under the laws of any
State of the United States or the District of Columbia for
the purposes of the reorganization and restructuring of the
enterprise; and
(B) one or more trusts to which to transfer--
(i) remaining debt obligations of the enterprise, for the
benefit of holders of such remaining obligations; or
(ii) remaining mortgages held for the purpose of backing
mortgage-backed securities, for the benefit of holders of
such remaining securities.

Subtitle B--Inspector General for Regulated Entities in Conservatorship

SEC. 1321. SPECIAL INSPECTOR GENERAL FOR THE CONSERVATORSHIP
OF REGULATED ENTITIES.

(a) Office of Inspector General.--There is established in
the General Accountability Office the Office of the Special
Inspector General for the Conservatorship of Regulated
Entities.
(b) Appointment of Inspector General.--
(1) Leadership.--The head of the Office established under
subsection (a) shall be the Special Inspector General for the
Conservatorship of Regulated Entities (in this section
referred to as the ``Special Inspector General''), who shall
be appointed by the President, by and with the advice and
consent of the Senate.
(2) Appointment.--The appointment of the Special Inspector
General shall be made on the basis of integrity and
demonstrated ability in accounting, auditing, financial
analysis, law, management analysis, public administration, or
investigations.
(3) Timing.--The nomination of an individual as Special
Inspector General shall be made as soon as is practicable
following the date of enactment of this Act, but not later
than 30 days after that date of enactment.

[[Page S3267]]

(4) Removable for cause.--The Special Inspector General
shall be removable from office, in accordance with the
provisions of section 3(b) of the Inspector General Act of
1978 (5 U.S.C. App.).
(5) Status.--For purposes of section 7324 of title 5,
United States Code, the Special Inspector General shall not
be considered an employee who determines policies to be
pursued by the United States in the nationwide administration
of Federal law.
(6) Compensation.--The annual rate of basic pay of the
Special Inspector General shall be the annual rate of basic
pay for an Inspector General under section 3(e) of the
Inspector General Act of 1978 (5 U.S.C. App.).
(c) Duties.--
(1) In general.--It shall be the duty of the Special
Inspector General to conduct, supervise, and coordinate
audits and investigations of the purchase, management, and
sale of assets by regulated entities, so long as the entities
remain in conservatorship under section 1367 of the Federal
Housing Enterprises Financial Safety and Soundness Act of
1992 (12 U.S.C. 4617) (in this section referred to as
``regulated entities''), including by collecting and
summarizing--
(A) a description of the categories of mortgage assets
purchased or otherwise procured by regulated entities;
(B) an explanation of the reasons why the Director of the
Federal Housing Finance Agency (in this section referred to
as the ``Director'') deemed it necessary to purchase each
such mortgage asset;
(C) a listing of each institution from which such mortgage
assets were purchased;
(D) a current estimate of the total amount of mortgage
assets purchased since the date of appointment of the Federal
Housing Finance Agency (in this section referred to as the
``Agency'') as conservator and the profit and loss, projected
or realized, of each such mortgage asset;
(E) a description of the categories of mortgage loans
modified by regulated entities;
(F) an explanation of the reasons why the Director deemed
it necessary to modify each such mortgage loan;
(G) an explanation of the risk analysis procedures in place
within regulated entities and the Council in respect to the
modification process, as well as the loans accepted into the
modification process;
(H) an explanation of the effect of continuing the
affordable housing goals of the regulated entities on the
financial standing of the regulated entities;
(I) the impact on any funding requested and accepted as a
part of the Amended and Restated Senior Preferred Stock
Purchase Agreement, dated September 26, 2008, amended May 6,
2009, amended December 24, 2009, and amended further at any
point following the date of enactment of this Act;
(J) an assessment of whether the budgetary treatment of the
assets and liabilities of the entities is correct, as it
relates to the budget proposed by the President, as required
under section 1105(a) of title 31, United States Code;
(K) an explanation of troubled assets owned by the
regulated entities and acquired prior to the conservatorship;
and
(L) a description of any changes to the structure of the
regulated entities made by the Director and an explanation of
how the changes will better enable the regulated entities to
be successful during and post conservatorship.
(2) Administrative authority.--The Special Inspector
General shall establish, maintain, and oversee such systems,
procedures, and controls as the Special Inspector General
considers appropriate to discharge the duty under paragraph
(1).
(3) Other duties.--In addition to the duties specified in
paragraphs (1) and (2), the Inspector General shall have the
duties and responsibilities of inspectors general under the
Inspector General Act of 1978, including sections 4(b)(1) and
6 of that Act.
(d) Personnel, Facilities, and Other Resources.--
(1) Authority for officers and employees.--The Special
Inspector General may select, appoint, and employ such
officers and employees as may be necessary for carrying out
the duties of the Special Inspector General, subject to the
provisions of title 5, United States Code, governing
appointments in the competitive service, and the provisions
of chapter 51 and subchapter III of chapter 53 of such title,
relating to classification and General Schedule pay rates.
(2) Services.--The Special Inspector General may obtain
services, as authorized by section 3109 of title 5, United
States Code, at daily rates not to exceed the equivalent rate
prescribed for grade GS-15 of the General Schedule by section
5332 of such title.
(3) Contracts.--The Special Inspector General may enter
into contracts and other arrangements for audits, studies,
analyses, and other services with public agencies and with
private persons, and make such payments as may be necessary
to carry out the duties of the Inspector General.
(4) Agency cooperation.--
(A) Requests.--Upon request of the Special Inspector
General for information or assistance from any department,
agency, or other entity of the Federal Government, the head
of such entity shall, in so far as is practicable and not in
contravention of any other provision of law, furnish such
information or assistance to the Special Inspector General,
or an authorized designee thereof.
(B) Reports of unreasonable denials.--Whenever information
or assistance requested by the Special Inspector General is,
in the judgment of the Special Inspector General,
unreasonably refused or not provided, the Special Inspector
General shall report the circumstances to the appropriate
committees of Congress, without delay.
(e) Reports.--
(1) Quarterly reports to congress.--Not later than 60 days
after the confirmation of the Special Inspector General, and
every calendar quarter thereafter, the Special Inspector
General shall submit to the appropriate committees of
Congress a report summarizing the activities of the Special
Inspector General during the 120-day period ending on the
date of such report. Each report shall include, for the
period covered by such report, a detailed statement of all
information collected under subsection (c)(1).
(2) Rule of construction.--Nothing in this subsection shall
be construed to authorize the public disclosure of
information that is--
(A) specifically prohibited from disclosure by any other
provision of law;
(B) specifically required by Executive Order to be
protected from disclosure in the interest of national defense
or national security or in the conduct of foreign affairs; or
(C) a part of an ongoing criminal investigation.
(f) Funding.--Of the amounts made available to the
Secretary, under section 118 of the Emergency Economic
Stabilization Act of 2008 (12 U.S.C. 5228), $5,000,000 shall
be available to the Special Inspector General to carry out
this section, which amount shall remain available until
expended.
(g) Termination.--
(1) In general.--The Office of the Special Inspector
General shall terminate 90 days after the date of the
emergence of all regulated entities from conservatorship and
receivership under section 1367 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4617).
(2) Final report.--The Office of the Special Inspector
General shall prepare and submit a final report to Congress
not later than the end of the 90-day period referred to in
paragraph (1).

Subtitle C--Limiting Further Bailouts of Fannie Mae and Freddie Mac

SEC. 1331. SHORT TITLE.

This subtitle may be cited as the ``Ending Bailouts of
Fannie Mae and Freddie Mac Act''.

SEC. 1332. REESTABLISHING THE MAXIMUM AGGREGATE AMOUNT
PERMITTED TO BE PROVIDED BY THE TAXPAYERS TO
FANNIE MAE AND FREDDIE MAC.

Section 1367(b)(2) of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C.
4617(b)(2)) is amended by adding at the end the following new
subparagraph:
``(L) Reestablishment of taxpayer funding caps.--The
Agency, as conservator, shall prevent a regulated entity from
requesting or receiving any funds from the United States
Department of the Treasury, as part of the Amended and
Restated Senior Preferred Stock Purchase Agreement, dated as
of September 26, 2008, amended May 6, 2009, and further
amended December 24, 2009, between the United State
Department of the Treasury and the Federal Home Loan Mortgage
Corporation, or the Federal National Mortgage Association,
that exceeds a maximum aggregate amount of
$200,000,000,000.''.

SEC. 1333. REESTABLISHING SCHEDULED REDUCTION OF MORTGAGE
ASSETS OWNED BY FANNIE MAE AND FREDDIE MAC.

Section 1367(b)(2) of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C.
4617(b)(2)) is amended by adding at the end the following new
subparagraph:
``(M) Reduction of owned mortgage assets.--
``(i) In general.--The Agency, as conservator, shall ensure
that a regulated entity does not own, as of any applicable
date, mortgage assets in excess of 90.0 percent of the
aggregate amount of mortgage assets that the regulated entity
owned on December 31 of each of the previous year, provided,
that in no event shall the regulated entity be required under
this subparagraph to own less than $250,000,000,000 in
mortgage assets.
``(ii) Definition of mortgage assets.--For purposes of this
subparagraph, the term `mortgage assets' means with respect
to a regulated entity, assets of such entity consisting of
mortgages, mortgage loans, mortgage-related securities,
participation certificates, mortgage-backed commercial paper,
obligations of real estate mortgage investment conduits and
similar assets, in each case to the extent such assets would
appear on the balance sheet of such entity in accordance with
generally accepted accounting principles.''.

SEC. 1334. ENSURING CONGRESSIONAL REVIEW FOR AGREEMENTS
INCREASING TAXPAYER RISK.

Section 1367(b)(2) of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C.
4617(b)(2)), as amended by sections 1203 and 1204, is further
amended by adding at the end the following new subparagraph:
``(N) Agreements.--
``(i) In general.--The Agency, as conservator or receiver,
may enter into agreements that are consistent with its
appointment as conservator or receiver with the regulated
entity and that expire prior to, or upon, the regulated
entity's emergence from conservatorship or receivership
provided--

[[Page S3268]]

``(I) the agreement does not expose the United States
taxpayers to additional risk; and
``(II) the agreement was approved by Congress pursuant to
clause (ii).

``(ii) Procedure for congressional approval.--

``(I) In general.--Notwithstanding clause (i), the Agency
may enter into, on an interim basis, an agreement, even if
the agreement exposes the taxpayer to additional risk,
including if such agreement exceeds the limitations
established under subparagraphs (L) and (M), if such an
agreement--

``(aa) is deemed necessary by the Agency, based upon the
Agency's duties as conservator or receiver; and
``(bb) is approved by Congress through adoption of a
concurrent resolution of approval, not more than 120 days
after the later of--
``(AA) the signing of the agreement; or
``(BB) the date of enactment of the Ending Bailouts of
Fannie Mae and Freddie Mac Act.

``(II) Required submissions for congressional review.--
During the 120-day period described under subclause (I), the
Director shall submit to Congress--

``(aa) the text of the agreement;
``(bb) a certification and justification of how the
agreement is consistent with the Agency's duties as
conservator or receiver;
``(cc) budgetary projections demonstrating the cost to the
taxpayer in a 1, 5, and 10-year window;
``(dd) independent risk analysis from the Government
Accountability Office of the agreement, considering the risk
to the short and long-term viability of the regulated entity
and the United States taxpayer; and
``(ee) a time table for the expiration of the agreement.''.

Subtitle D--Fannie Mae and Freddie Mac in the Federal Budget

SEC. 1341. ON-BUDGET STATUS OF FANNIE MAE AND FREDDIE MAC.

(a) In General.--Notwithstanding any other provision of
law, the receipts and disbursements, including the
administrative expenses, of the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation
shall be counted as new budget authority, outlays, receipts,
or deficit or surplus for purposes of--
(1) the Budget of the United States Government as submitted
by the President;
(2) the congressional budget;
(3) the Statutory Pay-As-You-Go Act of 2010; and
(4) the Balanced Budget and Emergency Deficit Control Act
of 1985 (or any successor statute).
(b) Expiration.--The budgetary treatment of the Federal
National Mortgage Association or Federal Home Loan Mortgage
Corporation or any functional replacements under subsection
(a) shall continue with respect to such entities until such
entities are no longer under Federal conservatorship or
receivership as authorized by the Housing and Economic
Recovery Act of 2008 (Public Law 110-289) or any successor
statute.

SEC. 1342. BUDGETARY TREATMENT OF FANNIE MAE AND FREDDIE MAC.

All costs to the Government of the activities of or under
the Federal National Mortgage Association, Federal Home Loan
Mortgage Corporation and any functional replacements or any
modification of such entities shall be determined on a fair
value basis.

SEC. 1343. FANNIE MAE AND FREDDIE MAC DEBT SUBJECT TO PUBLIC
DEBT LIMIT.

(a) In General.--For purposes of section 3101(b) of chapter
31 of title 31, United States Code, the face amount of
obligations issued by the Federal National Mortgage
Association and by the Federal Home Loan Mortgage Corporation
or any functional replacements and outstanding shall be
treated as issued by the United States Government under that
section.
(b) Temporary Increase in the Public Debt Limit.--The limit
on the obligation in section 3101(b) of title 31, United
States Code, shall be increased by the face amount of
obligations issued by the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation
and outstanding on April 15, 2010.
(c) Expiration.--
(1) Obligations.--The obligations of Federal National
Mortgage Association or Federal Home Loan Mortgage
Corporation or any functional replacements shall continue to
be treated as issued by the United States Government with
respect to such entities until such entities no longer have
in place an agreement with the Secretary of the Treasury for
the purchase of obligations and securities authorized by the
Housing and Economic Recovery Act of 2008 (Public Law 110-
289) or any successor statute.
(2) Debt limit.--Any temporary increase in the public debt
limit authorized in subsection (b) with respect to the
obligations of Federal National Mortgage Association or
Federal Home Loan Mortgage Corporation shall be reversed with
respect to such entities when Federal National Mortgage
Association or Federal Home Loan Mortgage Corporation or any
functional replacements no longer have in place an agreement
with the Secretary of the Treasury for the purchase of
obligations and securities authorized by the Housing and
Economic Recovery Act of 2008 (Public Law 110-289) or any
successor statute.

SEC. 1344. DEFINITIONS.

In this subtitle, the following definitions shall apply:
(1) Fair value.--The term ``fair value'' shall have the
same meaning as the definition of fair value outlined in
Financial Accounting Standards No. 157, or any successor
thereto, issued by the Financial Accounting Standards Board.
(2) Functional replacements.--The term ``functional
replacements'' means any organization, agreement, or other
arrangement that would perform the public functions of
Federal National Mortgage Association or Federal Home Loan
Mortgage Corporation.
(3) Modification.--
(A) In general.--The term ``modification'' means any
government action that alters the estimated fair value of the
activities of the Federal National Mortgage Association or
Federal Home Loan Mortgage Corporation or any functional
replacements.
(B) Cost.--The cost of a modification is the difference
between the current estimate of the fair value of the
activities of the Federal National Mortgage Association or
Federal Home Loan Mortgage Corporation or any functional
replacements and the estimate of the fair value of such
activities as modified.
______

SA 3840. Mr. CARDIN (for himself and Mr. Grassley) 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:

On page 977, line 19, strike ``The Securities'' and insert
the following:
(a) In General.--The Securities
On page 994, between lines 2 and 3, insert the following:
(b) Protection for Employees of Nationally Recognized
Statistical Rating Organizations.--Section 1514A(a) of title
18, United States Code, is amended--
(1) by inserting ``or nationally recognized statistical
rating organization (as defined in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c),'' after
``78o(d)),''; and
(2) by inserting ``or nationally recognized statistical
rating organization'' after ``such company''.
______

SA 3841. Mr. MENENDEZ 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:

On page 977, line 19, strike ``The'' and insert ``(a)
SECURITIES EXCHANGE ACT OF 1934.--The''.
On page 994, between lines 2 and 3, insert the following:
(b) Section 1514A of Title 18, United States Code.--
(1) Statute of limitations; jury trial.--Section
1514A(b)(2) of title 18, United States Code, is amended--
(A) in subparagraph (D)--
(i) by striking ``90'' and inserting ``180''; and
(ii) by striking the period at the end and inserting ``, or
after the date on which the employee became aware of the
violation.''; and
(B) by adding at the end the following:
``(E) Jury trial.--A party to an action brought under
paragraph (1)(B) shall be entitled to trial by jury.''.
(2) Compensatory damages.--Section 1514A(c)(2)(C) of title
18, United States Code, is amended by inserting
``compensatory damages, including'' before ``compensation''.
(3) Private securities litigation witnesses;
nonenforceability; information.--Section 1514A of title 18,
United States Code, is amended by adding at the end the
following:
``(e) Private Securities Litigation.--No employer may
discharge, demote, suspend, threaten, harass, directly or
indirectly, or in any other manner discriminate against, an
individual in the terms and conditions of employment because
of any lawful act done by the individual in providing
information, or assisting in any investigation or judicial or
administrative action, relating to a private securities
litigation action under section 21F of the Securities
Exchange Act of 1934 (15 U.S.C. 78u-4).
``(f) Nonenforceability of Certain Provisions Waiving
Rights and Remedies or Requiring Arbitration of Disputes.--
``(1) Waiver of rights and remedies.--Except as provided
under paragraph (3), the rights and remedies provided for in
this section may not be waived by any agreement, policy form,
or condition of employment, including by a predispute
arbitration agreement.
``(2) Predispute arbitration agreements.--Except as
provided under paragraph

[[Page S3269]]

(3), no predispute arbitration agreement shall be valid or
enforceable, if the agreement requires arbitration of a
dispute arising under this section.
``(3) Exception for collective bargaining agreements.--An
arbitration provision in a collective bargaining agreement
shall be enforceable as to disputes arising under the
collective bargaining agreement.''.
(4) Undisclosed liabilities.--Section 1514A(a)(1) of title
18, United States Code, is amended to read as follows:
``(1) to provide information, cause information to be
provided, or otherwise assist in an investigation regarding
any conduct which the employee reasonably believes
constitutes a violation of section 1341, 1343, 1344, or 1348,
any rule or regulation of the Securities and Exchange
Commission, any provision of Federal law relating to fraud
against shareholders, or any information which has not been
disclosed to shareholders that relates to a potential
liability of the company that, if incurred, could affect the
value of shareholder investments, when the information or
assistance is provided to or the investigation is conducted
by--
``(A) a Federal regulatory or law enforcement agency;
``(B) any Member of Congress or any committee of Congress;
or
``(C) a person with supervisory authority over the employee
(or such other person working for the employer who has the
authority to investigate, discover, or terminate misconduct);
or''.
(5) Technical and conforming amendment.--Section
1514A(b)(1) of title 18, United States Code, is amended by
inserting ``or (e)'' after ``subsection (a)''.
______

SA 3842. Mr. NELSON of Florida (for himself 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:

On page 780, strike lines 1 through 3 and insert the
following:
(B) in the matter following subsection (b)--
(i) by striking ``(but not'' and all that follows through
``insider trading)''; and
(ii) by striking ``(as defined in section 206B of the
Gramm-Leach-Bliley Act)'';
______

SA 3843. Mr. CARDIN 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:

At the end of subtitle A of title I, add the following:

SEC. 122. INCREASE IN DEPOSIT AND SHARE INSURANCE AMOUNTS.

(a) Permanent Increase in Deposit Insurance.--
(1) Insurance amount.--Section 11(a)(1)(E) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(a)(1)(E)) is amended by
striking ``$100,000'' and inserting ``$250,000''.
(2) Borrowing authority.--The Board of Directors of the
Corporation may request from the Secretary, and the Secretary
shall approve, a loan or loans in an amount or amounts
necessary to carry out this subsection, without regard to the
limitations on such borrowing under section 14(a) and 15(c)
of the Federal Deposit Insurance Act (12 U.S.C. 1824(a),
1825(c)).
(b) Permanent Increase in Share Insurance.--
(1) Insurance amount.--Section 207(k)(5) of the Federal
Credit Union Act (12 U.S.C. 1787(k)(5)) is amended by
striking ``$100,000'' and inserting ``$250,000''.
(2) Borrowing authority.--The National Credit Union
Administration Board may request from the Secretary, and the
Secretary shall approve, a loan or loans in an amount or
amounts necessary to carry out this subsection, without
regard to the limitations on such borrowing under section
203(d)(1) of the Federal Credit Union Act (12 U.S.C.
1783(d)(1)).
(c) Repeal.--Section 136 of the Emergency Economic
Stabilization Act of 2008 (12 U.S.C. 5241) is repealed,
effective on the date of enactment of this Act.
______

SA 3844. Mr. BROWNBACK (for himself, Mr. Feingold, Mr. Durbin, Mr.
Specter, Mr. Brown of Ohio, Mr. Johnson, and Mr. Whitehouse) 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:

On page 1565, after line 23, add the following:

TITLE XIII--CONGO CONFLICT MINERALS

SEC. 1301. SENSE OF CONGRESS ON EXPLOITATION AND TRADE OF
COLUMBITE-TANTALITE, CASSITERITE, GOLD, AND
WOLFRAMITE ORIGINATING IN DEMOCRATIC REPUBLIC
OF CONGO.

It is the sense of Congress that the exploitation and trade
of columbite-tantalite, cassiterite, gold, and wolframite in
the eastern Democratic Republic of Congo is helping to
finance extreme levels of violence in the eastern Democratic
Republic of Congo, particularly sexual and gender-based
violence, and contributing to an emergency humanitarian
situation therein, warranting the provisions of section 13(o)
of the Securities Exchange Act of 1934, as added by section
1302.

SEC. 1302. DISCLOSURE TO SECURITIES AND EXCHANGE COMMISSION
RELATING TO COLUMBITE-TANTALITE, CASSITERITE,
GOLD, AND WOLFRAMITE ORIGINATING IN DEMOCRATIC
REPUBLIC OF CONGO.

Section 13 of the Securities Exchange Act of 1934 (15
U.S.C. 78m), as amended by section 763 of this Act, is
further amended by adding at the end the following new
subsection:
``(o) Disclosures to Commission Relating to Columbite-
Tantalite, Cassiterite, Gold, and Wolframite Originating in
Democratic Republic of Congo.--
``(1) In general.--Not later than 180 days after the date
of the enactment of this subsection, the Commission shall
promulgate rules requiring any person described in paragraph
(2)--
``(A) to disclose annually to the Commission in a report--
``(i) whether the columbite-tantalite, cassiterite, gold,
or wolframite that was necessary as described in paragraph
(2)(A)(ii) in the year for which such report is submitted
originated or may have originated in the Democratic Republic
of Congo or an adjoining country; and
``(ii) a description of the measures taken by the person,
which may include an independent audit, to exercise due
diligence on the source and chain of custody of such
columbite-tantalite, cassiterite, gold, or wolframite, or
derivatives of such minerals, in order to ensure that the
activities of such person that involve such minerals or
derivatives did not directly or indirectly finance or benefit
armed groups in the Democratic Republic of Congo or an
adjoining country; and
``(B) make the information disclosed under subparagraph (A)
available to the public on the Internet website of the
person.
``(2) Person described.--
``(A) In general.--A person is described in this paragraph
if--
``(i) the person is required to file reports to the
Commission under subsection (a)(2); and
``(ii) columbite-tantalite, cassiterite, gold, or
wolframite is necessary to the functionality or production of
a product of such person.
``(B) Derivatives.--For purposes of this paragraph, if a
derivative of a mineral is necessary to the functionality or
production of a product of a person, such mineral shall also
be considered necessary to the functionality or production of
a product of the person.
``(3) Revisions and waivers.--The Commission shall revise
or temporarily waive the requirements described in paragraph
(1) if the President determines that such revision or waiver
is in the public interest.
``(4) Termination of disclosure requirements.--
``(A) In general.--Except as provided in subparagraph (B),
the requirements of paragraph (1) shall terminate on the date
that is 5 years after the date of the enactment of this
subsection.
``(B) Extension by secretary of state.--The date described
in subparagraph (A) shall be extended by 1 year for each year
in which the Secretary of State certifies that armed parties
to the ongoing armed conflict in the Democratic Republic of
Congo or adjoining countries continue to be directly involved
and benefitting from commercial activity involving columbite-
tantalite, cassiterite, gold, or wolframite.
``(5) Adjoining country defined.--In this subsection, the
term `adjoining country', with respect to the Democratic
Republic of Congo, means a country that shares an
internationally recognized border with the Democratic
Republic of Congo.''.

SEC. 1303. REPORT.

Not later than 2 years after the date of the enactment of
this Act, the Comptroller General of the United States shall
submit to Congress a report that includes the following:
(1) An assessment of the effectiveness of section 13(o) of
the Securities Exchange Act of 1934, as added by section
1302, in promoting peace and security in the eastern
Democratic Republic of Congo.
(2) A description of the problems, if any, encountered by
the Securities and Exchange Commission in carrying out the
provisions of such section 13(o).
(3) A description of the adverse impacts of carrying out
the provisions of such section 13(o), if any, on communities
in the eastern Democratic Republic of Congo.
(4) Recommendations for legislative or regulatory actions
that can be taken--

[[Page S3270]]

(A) to improve the effectiveness of the provisions of such
section 13(o) to promote peace and security in the eastern
Democratic Republic of Congo;
(B) to resolve the problems described pursuant to paragraph
(2), if any; and
(C) to mitigate the adverse impacts described pursuant
paragraph (3), if any.
______

SA 3845. Mr. KAUFMAN (for himself and Mr. Grassley), 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:

On page 728, between lines 3 and 4, insert the following:

SEC. 760. IMPROVED TRANSPARENCY.

(a) Securities.--Section 11A(a)(1) of the Securities
Exchange Act of 1934 (15 U.S.C. 78k-1(a)(1)) is amended by
adding at the end the following:
``(E) Promoting transparency of all markets for securities
through dissemination of quotations and orders to all
brokers, dealers, and investors, and minimizing conditions
under which quotations and orders are hidden or selectively
disseminated, will--
``(i) foster efficiency;
``(ii) enhance competition;
``(iii) increase the information available to brokers,
dealers, and investors;
``(iv) facilitate the offsetting of investors' orders; and
``(v) contribute to best execution of such orders.''.
(b) Commodities.--Section 3(b) of the Commodity Exchange
Act (7 U.S.C. 5(b)) is amended--
(1) by striking ``and'' following ``customer assets;'';
(2) by striking the period at the end of the second
sentence; and
(3) by adding at the end the following: ``; to promote
transparency of all markets through dissemination of
quotations and orders to all market participants and market
professionals; and to minimize conditions under which
quotations and orders are hidden or selectively disseminated.
Furthering the purposes of this Act will foster efficiency,
enhance competition, increase the information available to
market participants, facilitate the offsetting of market
participants' orders, and contribute to best execution of
such orders.''.
______

SA 3846. Mrs. McCASKILL 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:

At the end of subtitle C of title III, add the following:

SEC. 333. DEPOSIT RESTRICTED QUALIFIED TUITION PROGRAMS.

(a) In General.--Section 18 of the Federal Deposit
Insurance Act (12 U.S.C. 1828) is amended by adding at the
end the following new subsection:
``(y) Deposit Restricted Qualified Tuition Programs.--
``(1) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Deposit restricted qualified tuition program.--The
term `deposit restricted qualified tuition program' means a
qualified tuition program in which--
``(i) the cash provided by a contributor to such a
qualified tuition program may be invested only in deposits
insured by the Corporation;
``(ii) the contributor may become a participant in the
program by depositing funds through the program into an
account at a depository institution participating in the
program; and
``(iii) the program may include multiple depository
institutions, subject to the requirements of section 529 of
the Internal Revenue Code of 1986, as amended.
``(B) Qualified tuition program.--The term `qualified
tuition program' has the same meaning as in section 529 of
the Internal Revenue Code of 1986, as amended.
``(2) Treatment.--Notwithstanding any other provision of
the law, the following provisions shall apply with respect to
any deposit restricted qualified tuition program:
``(A) A deposit restricted qualified tuition program shall
be deemed to be an `identified banking product' (as defined
in Section 206 of the Gramm-Leach-Bliley Act of 1999) for
purposes of the Securities Exchange Act of 1934.
``(B) None of the following shall be treated as a security,
as defined in section 2(a)(1) the Securities Act of 1933,
section 3(a)(10) of the Securities Exchange Act of 1934, or
section 2(a)(36) of the Investment Company Act of 1940:
``(i) The deposits of cash at an insured depository
institution relating to a deposit restricted tuition program.
``(ii) Any certificate of deposit or other instrument of an
insured depository institution evidencing any such deposit.
``(iii) The rights and obligations of participants in a
deposit restricted qualified tuition program arising from
section 529 of the Internal Revenue Code, as amended.
``(C) In no event shall a deposit restricted qualified
tuition program, the State entity designated by statute to
oversee such program, the administrator appointed to operate
the program on behalf of the State or a participating
depository institution, be deemed to be an issuer of a
security or to be an investment company (as defined in
section 3(a) of the Investment Company Act of 1940).''.
(b) Budget Compliance.--The budgetary effects of this
section, for the purpose of complying with the Statutory Pay-
As-You-Go Act of 2010, shall be determined by reference to
the latest statement titled ``Budgetary Effects of PAYGO
Legislation'' for this Act, submitted for printing in the
Congressional Record by the Chairman of the Committee on the
Budget of the House of Representatives, provided that such
statement has been submitted prior to the vote on passage.
______

SA 3847. Mr. DODD (for Mr. Leahy (for himself and Mr. Cornyn))
proposed an amendment to the bill S. 3111, to establish the Commission
on Freedom of Information Act Processing Delays; as follows:
On page 6, line 5, strike ``The Comptroller General of the
United States'' and insert ``The Archivist of the United
States''.

On page 7, strike lines 1 through 3, and insert the
following:
(j) Transparency.--All meetings of the Commission shall be
open to the public, except that a meeting, or any portion of
it, may be closed to the public if it concerns matters or
information described in chapter 552b(c) of title 5, United
States Code. Interested persons shall be permitted to appear
at open meetings and present oral or written statements on
the subject matter of the meeting. The Commission may
administer oaths or affirmations to any person appearing
before the Commission.
______

SA 3848. Mr. WYDEN 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:

At the end of subtitle A of title I, add the following:

SEC. 122. CERTIFICATIONS BY THE SECRETARY.

(a) In General.--The Secretary shall, not later than
February 28, 2011, and annually thereafter, certify in
writing to Congress that the risks to the financial stability
of the United States that could arise from the material
financial distress or failure of a financial company are
sufficiently mitigated by actions authorized to be taken by
the Council or the individual members of the Council, in
order to ensure than no such financial company will be
considered ``too big to fail''.
(b) Inability To Certify.--If the Secretary is unable to
make a certification to Congress as required under subsection
(a), the Secretary shall--
(1) inform Congress of the reasons for such inability; and
(2) make recommendations to Congress, to the members of the
Council, and to the President that would, if implemented,
enable the Secretary to provide such certification.
______

SA 3849. Mr. WYDEN 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:

At the end of subtitle G of title X, add the following:

SEC. 1077. CREDIT CARD RATINGS.

(a) Research and Analysis.--Not later than 60 days after
the date of enactment of this Act, the research unit
established by the Director under section 1013(b) shall
conduct a study of the credit card industry and the efficacy
of establishing a rating system for credit cards, so that
consumers are able to compare the terms of credit card
accounts for purposes of comparing the level of safety and
financial risk with respect to such accounts.
(b) Report.--Not later than 180 days after the date of
enactment of this Act, the Director shall issue a report
based on the study required in subsection (a), and shall
determine, based on the report, whether establishing a

[[Page S3271]]

ratings system for credit cards would meaningfully improve
the ability of consumers to compare the terms of credit card
accounts.
(c) Rulemaking.--If the Director determines, pursuant to
subsection (b), that establishing a ratings system for credit
cards would meaningfully improve the ability of consumers to
compare the terms of credit card accounts, then not later
than 12 months after the date of enactment of this Act, the
Director shall issue final rules to establish and disclose to
the public the ratings for credit card accounts. Such rules
shall include consideration in such ratings of credit
practices, including--
(1) terms of arbitration between the consumer and the
credit card account holder;
(2) the imposition and amounts of fees;
(3) the ability of the consumer to opt out of a proposed
change in the terms of the credit card agreement;
(4) the manner and methods in which materials and
information are presented to consumers, and the degree of
conspicuousness with which key terms of the agreement are
presented;
(5) methods for the accrual of interest;
(6) reading level required to understand the terms of the
agreement; and
(7) such other factors as the Director determines are
appropriate with respect to such ratings.
(d) Consideration of NHTSA Program.--In carrying out
subsection (c), the Director shall consider establishing a 5-
star ratings system similar to the New Car Assessment Program
administered by the National Highway Traffic Safety
Administration of the Department of Transportation.
______

SA 3850. Mr. VITTER 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:

On page 43, insert between lines 6 and 7, insert the
following:
(3) Applicability to fannie mae and freddie mac.--
Notwithstanding any other provision of law, the provisions of
subsections (b) and (f) shall apply with respect to the
Federal National Mortgage Association and the Federal Home
Loan Mortgage Corporation in the same manner and to the same
extent as those provisions apply to nonbank financial
companies supervised by the Board of Governors and large,
interconnected bank holding companies.
At the end of title II, add the following new section and
designate accordingly:
Sec. __.: Applicability to fannie mae and freddie mac.--
Notwithstanding any other provision of law, this title shall
apply with respect to the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation in
the same manner and to the same extent as those provisions
apply to nonbank financial companies supervised by the Board
of Governors and large, interconnected bank holding
companies.
At the end of subtitle A of title I, add the following:

SEC. 122. ENHANCED TAXPAYER PROTECTION FROM FANNIE MAE AND
FREDDIE MAC.

(a) Reestablishing the Maximum Taxpayer Exposure to Fannie
Mae and Freddie Mac.-- Section 1367(b)(2) of the Federal
Housing Enterprises Financial Safety and Soundness Act of
1992 (12 U.S.C. 4617(b)(2)) is amended by adding the
following new subparagraph:
``(L) Limitation on certain funding.--The Agency, as
conservator, shall prohibit the Federal Home Loan Mortgage
Corporation or the Federal National Mortgage Association from
receiving more than $200,000,000,000 through the Amended and
Restated Senior Preferred Stock Purchase Agreement, dated as
of September 26, 2008, amended May 6, 2009, and further
amended December 24, 2009, between the United States
Department of the Treasury and the Federal Home Loan Mortgage
Corporation or the Federal National Mortgage Association.''.
(b) Reestablishing Scheduled Reduction of Mortgage Assets
Owned by Fannie Mae and Freddie Mac.--Section 1367(b)(2) of
the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4617(b)(2)) is amended by
adding at the end the following new subparagraph:
``(M) Reduction of owned mortgage assets.--
``(i) In general.--The Agency, as conservator, shall ensure
that a regulated entity does not own, as of any applicable
date, mortgage assets in excess of 90.0 percent of the
aggregate amount of mortgage assets that the regulated entity
owned on December 31 of each of the previous year, provided,
that in no event shall the regulated entity be required under
this subparagraph to own less than $250,000,000,000 in
mortgage assets.
``(ii) Definition of mortgage assets.--For purposes of this
subparagraph, the term `mortgage assets' means with respect
to a regulated entity, assets of such entity consisting of
mortgages, mortgage loans, mortgage-related securities,
participation certificates, mortgage-backed commercial paper,
obligations of real estate mortgage investment conduits and
similar assets, in each case to the extent such assets would
appear on the balance sheet of such entity in accordance with
generally accepted accounting principles.''.
(c) Affordable Housing Goals.--
Repeal.--The Federal Housing Enterprises Financial Safety
and Soundness Act of 1992 is amended by striking sections
1331 through 1336 (12 U.S.C. 4561-6).
(2) Conforming amendments.--Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 is amended--
(A) in section 1303(28) (12 U.S.C. 4502(28)), by striking
``and, for the purposes'' and all that follows through
``designated disaster areas'';
(B) in section 1324(b)(1)(A) (12 U.S.C. 4544(b)(1)(A))--
(i) by striking clauses (i), (ii), and (iv);
(ii) in clause (iii), by inserting ``and'' after the
semicolon at the end; and
(iii) by redesignating clauses (iii) and (v) as clauses (i)
and (ii), respectively;
(C) in section 1338(c)(10) (12 U.S.C. 4568(c)(10)), by
striking subparagraph (E);
(D) in section 1339(h) (12 U.S.C. 4569), by striking
paragraph (7);
(E) in section 1341 (12 U.S.C. 4581)--
(i) in subsection (a)--
(I) in paragraph (1), by inserting ``or'' after the
semicolon at the end;
(II) in paragraph (2), by striking the semicolon at the end
and inserting a period; and
(III) by striking paragraphs (3) and (4); and
(ii) in subsection (b)(2)--
(I) in subparagraph (A), by inserting ``or'' after the
semicolon at the end;
(II) by striking subparagraphs (B) and (C); and
(III) by redesignating subparagraph (D) as subparagraph
(B);
(F) in section 1345(a) (12 U.S.C. 4585(a))--
(i) in paragraph (1), by inserting ``or'' after the
semicolon at the end;
(ii) in paragraph (2), by striking the semicolon at the end
and inserting a period; and
(iii) by striking paragraphs (3) and (4); and
(G) in section 1371(a)(2) (12 U.S.C. 4631(a)(2))--
(i) by striking ``with any housing goal established under
subpart B of part 2 of subtitle A of this title,''; and
(ii) by striking ``section 1336 or''.
______

SA 3851. Mr. VITTER submitted an amendment intended to be proposed to
amendment SA 3739 proposed by 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:

On page 43, insert between lines 6 and 7, insert the
following:
(3) Applicability to fannie mae and freddie mac.--
Notwithstanding any other provision of law, the provisions of
subsections (b) through (f) shall apply with respect to the
Federal National Mortgage Association and the Federal Home
Loan Mortgage Corporation in the same manner and to the same
extent as those provisions apply to nonbank financial
companies supervised by the Board of Governors and large,
interconnected bank holding companies.
At the end of title II, add the following new section and
designate accordingly:
Sec. __.:Applicability to fannie mae and freddie mac.--
Notwithstanding any other provision of law, this title shall
apply will respect to the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation in
the same manner and to the same extent as those provisions
apply to nonbank financial companies supervised by the Board
of Governors and large, interconnected bank holding
companies.
At the end of subtitle A of title I, add the following:

SEC. 122. ENHANCED TAXPAYER PROTECTION FROM FANNIE MAE AND
FREDDIE MAC.

(a) Reestablishing the Maximum Taxpayer Exposure to Fannie
Mae and Freddie Mac.--Section 1367(b)(2) of the Federal
Housing Enterprises Financial Safety and Soundness Act of
1992 (12 U.S.C. 4617(b)(2)) is amended by adding the
following new subparagraph:
``(L) Limitation on certain funding.--The Agency, as
conservator, shall prohibit the Federal Home Loan Mortgage
Corporation or the Federal National Mortgage Association from
receiving more than $200,000,000,000 through the Amended and
Restated Senior Preferred Stock Purchase Agreement, dated as
of September 26, 2008, amended May 6, 2009, and further
amended December 24, 2009, between the United States
Department of the Treasury and the Federal Home Loan Mortgage
Corporation or the Federal National Mortgage Association.''.
(b) Reestablishing Scheduled Reduction of Mortgage Assets
Owned by Fannie Mae and Freddie Mac.--Section 1367(b)(2) of
the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4617(b)(2)) is amended by
adding at the end the following new subparagraph:
``(M) Reduction of owned mortgage assets.--
``(i) In general.--The Agency, as conservator, shall ensure
that a regulated entity

[[Page S3272]]

does not own, as of any applicable date, mortgage assets in
excess of 90.0 percent of the aggregate amount of mortgage
assets that the regulated entity owned on December 31 of each
of the previous year, provided, that in no event shall the
regulated entity be required under this subparagraph to own
less than $250,000,000,000 in mortgage assets.
``(ii) Definition of mortgage assets.--For purposes of this
subparagraph, the term `mortgage assets' means with respect
to a regulated entity, assets of such entity consisting of
mortgages, mortgage loans, mortgage-related securities,
participation certificates, mortgage-backed commercial paper,
obligations of real estate mortgage investment conduits and
similar assets, in each case to the extent such assets would
appear on the balance sheet of such entity in accordance with
generally accepted accounting principles.''
______

SA 3852. Mr. DeMINT (for himself and Mr. Vitter) 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:

At the appropriate place, insert the following:

SEC. __. BORDER FENCE COMPLETION.

(a) Minimum Requirements.--Section 102(b)(1) of the Illegal
Immigration Reform and Immigrant Responsibility Act of 1996
(8 U.S.C. 1103 note) is amended--
(1) in subparagraph (A), by adding at the end the
following: ``Fencing that does not effectively restrain
pedestrian traffic (such as vehicle barriers and virtual
fencing) may not be used to meet the 700-mile fence
requirement under this subparagraph.'';
(2) in subparagraph (B)--
(A) in clause (i), by striking ``and'' at the end;
(B) in clause (ii), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(iii) not later than 1 year after the date of the
enactment of the Restoring American Financial Stability Act
of 2010, complete the construction of all the reinforced
fencing and the installation of the related equipment
described in subparagraph (A).''; and
(3) in subparagraph (C), by adding at the end the
following:
``(iii) Funding not contingent on consultation.--Amounts
appropriated to carry out this paragraph may not be impounded
or otherwise withheld for failure to fully comply with the
consultation requirement under clause (i).''.
(b) Report.--Not later than 180 days after the date of the
enactment of the Restoring American Financial Stability Act
of 2010, the Secretary of Homeland Security shall submit a
report to Congress that describes--
(1) the progress made in completing the reinforced fencing
required under section 102(b)(1) of the Illegal Immigration
Reform and Immigrant Responsibility Act of 1996 (8 U.S.C.
1103 note), as amended by this section; and
(2) the plans for completing such fencing not later than 1
year after the date of the enactment of this Act.
______

SA 3853. Mr. BROWN of Ohio (for himself and Mr. Kaufman), 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:

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 2 and 3, 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 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(o) 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.

[[Page S3273]]

On page 497, line 14, strike ``SEC. 13'' and insert ``SEC.
14''.

On page 976, 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:
``(o) 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.''.
______

SA 3854. Mr. REED (for himself and Mr. Akaka) 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:

On page 1187, line 9, strike ``effective.'' and insert the
following: ``effective.

Subtitle K--Additional Amendments to the Securities Laws

SEC. 992. STRENGTHENING ENFORCEMENT BY THE COMMISSION.

(a) Nationwide Service of Subpoenas.--
(1) Securities act of 1933.--Section 22(a) of the
Securities Act of 1933 (15 U.S.C. 77v(a)) is amended by
inserting after the second sentence the following: ``In any
action or proceeding instituted by the Commission under this
title in a United States district court for any judicial
district, a subpoena issued to compel the attendance of a
witness or the production of documents or tangible things (or
both) at a hearing or trial may be served at any place within
the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules
of Civil Procedure shall not apply to a subpoena issued under
the preceding sentence.''.
(2) Securities exchange act of 1934.--Section 27 of the
Securities Exchange Act of 1934 (15 U.S.C. 78aa) is amended
by inserting after the third sentence the following: ``In any
action or proceeding instituted by the Commission under this
title in a United States district court for any judicial
district, a subpoena issued to compel the attendance of a
witness or the production of documents or tangible things (or
both) at a hearing or trial may be served at any place within
the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules
of Civil Procedure shall not apply to a subpoena issued under
the preceding sentence.''.
(3) Investment company act of 1940.--Section 44 of the
Investment Company Act of 1940 (15 U.S.C. 80a-43) is amended
by inserting after the fourth sentence the following: ``In
any action or proceeding instituted by the Commission under
this title in a United States district court for any judicial
district, a subpoena issued to compel the attendance of a
witness or the production of documents or tangible things (or
both) at a hearing or trial may be served at any place within
the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules
of Civil Procedure shall not apply to a subpoena issued under
the preceding sentence.''.
(4) Investment advisers act of 1940.--Section 214 of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-14) is amended
by inserting after the third sentence the following: ``In any
action or proceeding instituted by the Commission under this
title in a United States district court for any judicial
district, a subpoena issued to compel the attendance of a
witness or the production of documents or tangible things (or
both) at a hearing or trial may be served at any place within
the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules
of Civil Procedure shall not apply to a subpoena issued under
the preceding sentence.''.
(b) Authority to Impose Civil Penalties in Cease and Desist
Proceedings.--
(1) Under the securities act of 1933.--Section 8A of the
Securities Act of 1933 (15 U.S.C. 77h-1) is amended by adding
at the end the following new subsection:
``(g) Authority to Impose Money Penalties.--
``(1) Grounds.--In any cease-and-desist proceeding under
subsection (a), the Commission may impose a civil penalty on
a person if the Commission finds, on the record, after notice
and opportunity for hearing, that--
``(A) such person--
``(i) is violating or has violated any provision of this
title, or any rule or regulation issued under this title; or
``(ii) is or was a cause of the violation of any provision
of this title, or any rule or regulation thereunder; and
``(B) such penalty is in the public interest.
``(2) Maximum amount of penalty.--
``(A) First tier.--The maximum amount of a penalty for each
act or omission described in paragraph (1) shall be $7,500
for a natural person or $75,000 for any other person.
``(B) Second tier.--Notwithstanding subparagraph (A), the
maximum amount of penalty for each such act or omission shall
be $75,000 for a natural person or $375,000 for any other
person, if the act or omission described in paragraph (1)
involved fraud, deceit, manipulation, or deliberate or
reckless disregard of a regulatory requirement.
``(C) Third tier.--Notwithstanding subparagraphs (A) and
(B), the maximum amount of penalty for each such act or
omission shall be $150,000 for a natural person or $725,000
for any other person, if--
``(i) the act or omission described in paragraph (1)
involved fraud, deceit, manipulation, or deliberate or
reckless disregard of a regulatory requirement; and
``(ii) such act or omission directly or indirectly resulted
in--

``(I) substantial losses or created a significant risk of
substantial losses to other persons; or
``(II) substantial pecuniary gain to the person who
committed the act or omission.

``(3) Evidence concerning ability to pay.--In any
proceeding in which the Commission may impose a penalty under
this section, a respondent may present evidence of the
ability of the respondent to pay such penalty. The Commission
may, in its discretion, consider such evidence in determining
whether such penalty is in the public interest. Such evidence
may relate to the extent of the ability of the respondent to
continue in business and the collectability of a penalty,
taking into account any other claims of the United States or
third parties upon the assets of the respondent and the
amount of the assets of the respondent.''.
(2) Under the securities exchange act of 1934.--Section
21B(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78u-
2(a)) is amended--
(A) by striking the matter following paragraph (4);
(B) in the matter preceding paragraph (1), by inserting
after ``opportunity for hearing,'' the following: ``that such
penalty is in the public interest and'';
(C) by redesignating paragraphs (1) through (4) as
subparagraphs (A) through (D), respectively, and adjusting
the margins accordingly;
(D) by striking ``In any proceeding'' and inserting the
following:
``(1) In general.--In any proceeding''; and
(E) by adding at the end the following:
``(2) Cease-and-desist proceedings.--In any proceeding
instituted under section 21C against any person, the
Commission may impose a civil penalty, if the Commission
finds, on the record after notice and opportunity for
hearing, that such person--
``(A) is violating or has violated any provision of this
title, or any rule or regulation issued under this title; or
``(B) is or was a cause of the violation of any provision
of this title, or any rule or regulation issued under this
title.''.
(3) Under the investment company act of 1940.--Section
9(d)(1) of the Investment Company Act of 1940 (15 U.S.C. 80a-
9(d)(1)) is amended--
(A) by striking the matter following subparagraph (C);
(B) in the matter preceding subparagraph (A), by inserting
after ``opportunity for hearing,'' the following: ``that such
penalty is in the public interest, and'';
(C) by redesignating subparagraphs (A) through (C) as
clauses (i) through (iii), respectively, and adjusting the
margins accordingly;
(D) by striking ``In any proceeding'' and inserting the
following:
``(A) In general.--In any proceeding''; and
(E) by adding at the end the following:
``(B) Cease-and-desist proceedings.--In any proceeding
instituted pursuant to subsection (f) against any person, the
Commission may impose a civil penalty if the Commission
finds, on the record, after notice and opportunity for
hearing, that such person--
``(i) is violating or has violated any provision of this
title, or any rule or regulation issued under this title; or

[[Page S3274]]

``(ii) is or was a cause of the violation of any provision
of this title, or any rule or regulation issued under this
title.''.
(4) Under the investment advisers act of 1940.--Section
203(i)(1) of the Investment Advisers Act of 1940 (15 U.S.C.
80b-3(i)(1)) is amended--
(A) by striking the matter following subparagraph (D);
(B) in the matter preceding subparagraph (A), by inserting
after ``opportunity for hearing,'' the following: ``that such
penalty is in the public interest and'';
(C) by redesignating subparagraphs (A) through (D) as
clauses (i) through (iv), respectively, and adjusting the
margins accordingly;
(D) by striking ``In any proceeding'' and inserting the
following:
``(A) In general.--In any proceeding''; and
(E) by adding at the end the following new subparagraph:
``(B) Cease-and-desist proceedings.--In any proceeding
instituted pursuant to subsection (k) against any person, the
Commission may impose a civil penalty if the Commission
finds, on the record, after notice and opportunity for
hearing, that such person--
``(i) is violating or has violated any provision of this
title, or any rule or regulation issued under this title; or
``(ii) is or was a cause of the violation of any provision
of this title, or any rule or regulation issued under this
title.''.
(c) Formerly Associated Persons.--
(1) Member or employee of the municipal securities
rulemaking board.--Section 15B(c)(8) of the Securities
Exchange Act of 1934 (15 U.S.C. 78o-4(c)(8)) is amended by
striking ``any member or employee'' and inserting ``any
person who is, or at the time of the alleged violation or
abuse was, a member or employee''.
(2) Person associated with a government securities broker
or dealer.--Section 15C(c) of the Securities Exchange Act of
1934 (15 U.S.C. 78o-5(c)) is amended--
(A) in paragraph (1)(C), by striking ``any person
associated, or seeking to become associated,'' and inserting
``any person who is, or at the time of the alleged misconduct
was, associated or seeking to become associated''; and
(B) in paragraph (2)--
(i) in subparagraph (A), by inserting ``, seeking to become
associated, or, at the time of the alleged misconduct,
associated or seeking to become associated'' after ``any
person associated''; and
(ii) in subparagraph (B), by inserting ``, seeking to
become associated, or, at the time of the alleged misconduct,
associated or seeking to become associated'' after ``any
person associated''.
(3) Person associated with a member of a national
securities exchange or registered securities association.--
Section 21(a)(1) of the Securities Exchange Act of 1934 (15
U.S.C. 78u(a)(1)) is amended, in the first sentence, by
inserting ``, or, as to any act or practice, or omission to
act, while associated with a member, formerly associated''
after ``member or a person associated''.
(4) Participant of a registered clearing agency.--Section
21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
78u(a)(1)) is amended, in the first sentence, by inserting
``or, as to any act or practice, or omission to act, while a
participant, was a participant,'' after ``in which such
person is a participant,''.
(5) Officer or director of a self-regulatory
organization.--Section 19(h)(4) of the Securities Exchange
Act of 1934 (15 U.S.C. 78s(h)(4)) is amended--
(A) by striking ``any officer or director'' and inserting
``any person who is, or at the time of the alleged misconduct
was, an officer or director''; and
(B) by striking ``such officer or director'' and inserting
``such person''.
(6) Officer or director of an investment company.--Section
36(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-
35(a)) is amended--
(A) by striking ``a person serving or acting'' and
inserting ``a person who is, or at the time of the alleged
misconduct was, serving or acting''; and
(B) by striking ``such person so serves or acts'' and
inserting ``such person so serves or acts, or at the time of
the alleged misconduct, so served or acted''.
(7) Person associated with a public accounting firm.--
(A) Sarbanes-oxley act of 2002 amendment.--Section 2(a)(9)
of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(9)) is
amended by adding at the end the following:
``(C) Investigative and enforcement authority.--For
purposes of sections 3(c), 101(c), 105, and 107(c) and the
rules of the Board and Commission issued thereunder, except
to the extent specifically excepted by such rules, the terms
defined in subparagraph (A) shall include any person
associated, seeking to become associated, or formerly
associated with a public accounting firm, except that--
``(i) the authority to conduct an investigation of such
person under section 105(b) shall apply only with respect to
any act or practice, or omission to act, by the person while
such person was associated or seeking to become associated
with a registered public accounting firm; and
``(ii) the authority to commence a disciplinary proceeding
under section 105(c)(1), or impose sanctions under section
105(c)(4), against such person shall apply only with respect
to--

``(I) conduct occurring while such person was associated or
seeking to become associated with a registered public
accounting firm; or
``(II) non-cooperation, as described in section 105(b)(3),
with respect to a demand in a Board investigation for
testimony, documents, or other information relating to a
period when such person was associated or seeking to become
associated with a registered public accounting firm.''.

(B) Securities exchange act of 1934 amendment.--Section
21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
78u(a)(1)) is amended by striking ``or a person associated
with such a firm'' and inserting ``, a person associated with
such a firm, or, as to any act, practice, or omission to act,
while associated with such firm, a person formerly associated
with such a firm''.
(8) Supervisory personnel of an audit firm.--Section
105(c)(6) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
7215(c)(6)) is amended--
(A) in subparagraph (A), by striking ``the supervisory
personnel'' and inserting ``any person who is, or at the time
of the alleged failure reasonably to supervise was, a
supervisory person''; and
(B) in subparagraph (B)--
(i) by striking ``No associated person'' and inserting ``No
current or former supervisory person''; and
(ii) by striking ``any other person'' and inserting ``any
associated person''.
(9) Member of the public company accounting oversight
board.--Section 107(d)(3) of the Sarbanes-Oxley Act of 2002
(15 U.S.C. 7217(d)(3)) is amended by striking ``any member''
and inserting ``any person who is, or at the time of the
alleged misconduct was, a member''.
(d) Extraterritorial Jurisdiction of the Antifraud
Provisions of the Federal Securities Laws.--
(1) Under the securities act of 1933.--Section 22 of the
Securities Act of 1933 (15 U.S.C. 77v(a)) is amended by
adding at the end the following new subsection:
``(c) Extraterritorial Jurisdiction.--The district courts
of the United States and the United States courts of any
Territory shall have jurisdiction of an action or proceeding
brought or instituted by the Commission or the United States
alleging a violation of section 17(a) involving--
``(1) conduct within the United States that constitutes
significant steps in furtherance of the violation, even if
the securities transaction occurs outside the United States
and involves only foreign investors; or
``(2) conduct occurring outside the United States that has
a foreseeable substantial effect within the United States.''.
(2) Under the securities exchange act of 1934.--Section 27
of the Securities Exchange Act of 1934 (15 U.S.C. 78aa) is
amended--
(A) by striking ``The district'' and inserting the
following:
``(a) In General.--The district''; and
(B) by adding at the end the following new subsection:
``(b) Extraterritorial Jurisdiction.--The district courts
of the United States and the United States courts of any
Territory shall have jurisdiction of an action or proceeding
brought or instituted by the Commission or the United States
alleging a violation of the antifraud provisions of this
title involving--
``(1) conduct within the United States that constitutes
significant steps in furtherance of the violation, even if
the securities transaction occurs outside the United States
and involves only foreign investors; or
``(2) conduct occurring outside the United States that has
a foreseeable substantial effect within the United States.''.
(3) Under the investment advisers act of 1940.--Section 214
of the Investment Advisers Act of 1940 (15 U.S.C. 80b-14) is
amended--
(A) by striking ``The district'' and inserting the
following:
``(a) In General.--The district''; and
(B) by adding at the end the following new subsection:
``(b) Extraterritorial Jurisdiction.--The district courts
of the United States and the United States courts of any
Territory shall have jurisdiction of an action or proceeding
brought or instituted by the Commission or the United States
alleging a violation of section 206 involving--
``(1) conduct within the United States that constitutes
significant steps in furtherance of the violation, even if
the violation is committed by a foreign adviser and involves
only foreign investors; or
``(2) conduct occurring outside the United States that has
a foreseeable substantial effect within the United States.''.
(e) Control Person Liability Under the Securities Exchange
Act of 1934.--Section 20(a) of the Securities Exchange Act of
1934 (15 U.S.C. 78t(a)) is amended by inserting after
``controlled person is liable'' the following: ``(including
to the Commission in any action brought under paragraph (1)
or (3) of section 21(d))''.
(f) Aiding and Abetting Under the Securities Laws.--
(1) Under the securities act of 1933.--Section 15 of the
Securities Act of 1933 (15 U.S.C. 77o) is amended--
(A) by striking ``Every person who'' and inserting ``(a)
Controlling Persons.--Every person who''; and
(B) by adding at the end the following:
``(b) Prosecution of Persons Who Aid and Abet Violations.--
For purposes of any action brought by the Commission under
subparagraph (b) or (d) of section 20, any person

[[Page S3275]]

that knowingly or recklessly provides substantial assistance
to another person in violation of a provision of this Act, or
of any rule or regulation issued under this Act, shall be
deemed to be in violation of such provision to the same
extent as the person to whom such assistance is provided.''.
(2) Under the investment company act of 1940.--Section 48
of the Investment Company Act of 1940 (15 U.S.C. 80a-48) is
amended by redesignating subsection (b) as subsection (c) and
inserting after subsection (a) the following:
``(b) For purposes of any action brought by the Commission
under subsection (d) or (e) of section 42, any person that
knowingly or recklessly provides substantial assistance to
another person in violation of a provision of this Act, or of
any rule or regulation issued under this Act, shall be deemed
to be in violation of such provision to the same extent as
the person to whom such assistance is provided.''.
(3) Under the investment advisers act.--Section 209 of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-9) is amended
by inserting at the end the following new subsection:
``(f) Aiding and Abetting.--For purposes of any action
brought by the Commission under subsection (e), any person
that knowingly or recklessly has aided, abetted, counseled,
commanded, induced, or procured a violation of any provision
of this Act, or of any rule, regulation, or order hereunder,
shall be deemed to be in violation of such provision, rule,
regulation, or order to the same extent as the person that
committed such violation.''.
(4) Under the securities exchange act of 1934.--Section
20(e) of the Securities Exchange Act of 1934 (15 U.S.C.
78t(e)) is amended by inserting ``or recklessly'' after
``knowingly''.

SEC. 993. ADDRESSING ISSUES REVEALED BY THE MADOFF FRAUD.

(a) Revision to Recordkeeping Rule.--
(1) Investment company act of 1940 amendments.--Section 31
of the Investment Company Act of 1940 (15 U.S.C. 80a-30) is
amended--
(A) in subsection (a)(1), by adding at the end the
following: ``Each person having custody or use of the
securities, deposits, or credits of a registered investment
company shall maintain and preserve all records that relate
to the custody or use by such person of the securities,
deposits, or credits of the registered investment company for
such period or periods as the Commission, by rule or
regulation, may prescribe, as necessary or appropriate in the
public interest or for the protection of investors.''; and
(B) in subsection (b), by adding at the end the following:
``(4) Records of persons with custody or use.--
``(A) In general.--Records of persons having custody or use
of the securities, deposits, or credits of a registered
investment company that relate to such custody or use, are
subject at any time, or from time to time, to such reasonable
periodic, special, or other examinations and other
information and document requests by representatives of the
Commission, as the Commission deems necessary or appropriate
in the public interest or for the protection of investors.
``(B) Certain persons subject to other regulation.--Any
person that is subject to regulation and examination by a
Federal financial institution regulatory agency (as such term
is defined under section 212(c)(2) of title 18, United States
Code) may satisfy any examination request, information
request, or document request described under subparagraph
(A), by providing to the Commission a detailed listing, in
writing, of the securities, deposits, or credits of the
registered investment company within the custody or use of
such person.''.
(2) Investment advisers act of 1940 amendment.--Section 204
of the Investment Advisers Act of 1940 (15 U.S.C. 80b-4) is
amended by adding at the end the following new subsection:
``(d) Records of Persons With Custody or Use.--
``(1) In general.--Records of persons having custody or use
of the securities, deposits, or credits of a client, that
relate to such custody or use, are subject at any time, or
from time to time, to such reasonable periodic, special, or
other examinations and other information and document
requests by representatives of the Commission, as the
Commission deems necessary or appropriate in the public
interest or for the protection of investors.
``(2) Certain persons subject to other regulation.--Any
person that is subject to regulation and examination by a
Federal financial institution regulatory agency (as such term
is defined under section 212(c)(2) of title 18, United States
Code) may satisfy any examination request, information
request, or document request described under paragraph (1),
by providing the Commission with a detailed listing, in
writing, of the securities, deposits, or credits of the
client within the custody or use of such person.''.
(b) Streamlined Hiring Authority for Market Specialists.--
(1) Appointment authority.--Section 3114 of title 5, United
States Code, is amended by striking the section heading and
all that follows through the end of subsection (a) and
inserting the following:

``Sec. 3114. Appointment of candidates to certain positions
in the competitive service by the Securities and Exchange
Commission

``(a) Applicability.--This section applies with respect to
any position of accountant, economist, and securities
compliance examiner at the Commission that is in the
competitive service, and any position at the Commission in
the competitive service that requires specialized knowledge
of financial and capital market formation or regulation,
financial market structures or surveillance, or information
technology.''.
(2) Clerical amendment.--The table of sections for chapter
31 of title 5, United States Code, is amended by striking the
item relating to section 3114 and inserting the following:

``3114. Appointment of candidates to positions in the competitive
service by the Securities and Exchange Commission.''.
(3) Pay authority.--The Commission may set the rate of pay
for experts and consultants appointed under the authority of
section 3109 of title 5, United States Code, in the same
manner in which it sets the rate of pay for employees of the
Commission.
(c) SIPC Reforms.--
(1) Removing the distinction between claims for cash and
claims for securities.--The Securities Investor Protection
Act of 1970 (15 U.S.C. 78aaa et seq.) is amended--
(A) in section 8(e)(4)(B) (15 U.S.C. 78fff-2(e)(4)(B)), by
striking ``for cash or securities'';
(B) in section 9(a) (15 U.S.C. 78fff-3(a))--
(i) by striking paragraph (1); and
(ii) by redesignating paragraphs (2) through (5) as
paragraphs (1) through (4), respectively; and
(C) in section 16(2)(B) (15 U.S.C. 78lll(2)(B)), by
striking ``for cash or securities''.
(2) Liquidation of a carrying broker-dealer.--Section
5(a)(3) of the Securities Investor Protection Act of 1970 (15
U.S.C. 78eee(a)(3)) is amended--
(A) by striking the undesignated matter following
subparagraph (B);
(B) in subparagraph (A), by striking ``any member of SIPC''
and inserting ``the member'';
(C) in subparagraph (B), by striking the comma at the end
and inserting a period;
(D) in the matter preceding subparagraph (A), by striking
``If SIPC'' and inserting the following:
``(A) In general.--SIPC may, upon notice to a member of
SIPC, file an application for a protective decree with any
court of competent jurisdiction specified in section 21(e) or
27 of the Securities Exchange Act of 1934, except that no
such application shall be filed with respect to a member, the
only customers of which are persons whose claims could not be
satisfied by SIPC advances pursuant to section 9, if SIPC'';
and
(E) by adding at the end the following:
``(B) Consent required.--No member of SIPC that has a
customer may enter into an insolvency, receivership, or
bankruptcy proceeding, under Federal or State law, without
the specific consent of SIPC.''.

SEC. 994. ENHANCED ABILITY OF COMMISSION TO OBTAIN NEEDED
INFORMATION.

(a)  Investment Company Examination.--Section 31(b)(1) of
the Investment Company Act of 1940 (15 U.S.C. 80a-30(b)(1))
is amended to read as follows:
``(1) In general.--The following records shall be subject,
at any time, or from time to time, to such reasonable
periodic, special, or other examinations by representatives
of the Commission as the Commission deems necessary or
appropriate in the public interest or for the protection of
investors:
``(A) All records of a registered investment company.
``(B) All records of a underwriter, broker, dealer, or
investment adviser that is a majority-owned subsidiary of a
registered investment company.
``(C) All records required to be maintained and preserved
by a investment adviser that is not a majority-owned
subsidiary of a registered investment company.
``(D) All records required to be maintained and preserved
by a depositor of a registered investment company.
``(E) All records required to be maintained and preserved
by a principal underwriter for a registered investment
company (other than a closed-end company).''.
(b) Expanded Access to Grand Jury Information.--Chapter 215
of title 18, United States Code, is amended by adding at the
end the following:

``Sec. 3323. Access to grand jury information

``(a) Disclosure.--
``(1) In general.--Upon motion of an attorney for the
government, a court may direct disclosure of matters
occurring before a grand jury during an investigation of
conduct that may constitute a violation of any provision of
the securities laws to the Securities and Exchange Commission
for use in relation to any matter within the jurisdiction of
the Commission.
``(2) Substantial need required.--A court may issue an
order under paragraph (1) only upon a finding of a
substantial need in the public interest.
``(b) Use of Matter.--A person to whom a matter has been
disclosed under this section shall not use such matter, other
than for the purpose for which such disclosure was
authorized.
``(c) Definitions.--As used in this section--
``(1) the terms `attorney for the government' and `grand
jury information' have the meanings given to those terms in
section 3322 of title 18, United States Code; and
``(2) the term `securities laws' has the same meaning as in
section 3(a)(47) of the Securities Exchange Act of 1934.''.

[[Page S3276]]

(c) Enhanced Authority of the Securities and Exchange
Commission to Conduct Surveillance and Risk Assessment.--
(1) Securities exchange act of 1934.--Section 17(b) of the
Securities Exchange Act of 1934 (15 U.S.C. 78q(b)) is amended
by adding at the end the following:
``(5) Surveillance and risk assessment.--All persons
described in subsection (a) are subject, at any time, or from
time to time, to such reasonable periodic, special, or other
information and document requests by representatives of the
Commission as the Commission, by rule or order, deems
necessary or appropriate to conduct surveillance or risk
assessments of the securities markets, persons registered
with the Commission under this title, or otherwise in
furtherance of the purposes of this title.''.
(2) Investment company act of 1940.--Section 31(b) of the
Investment Company Act of 1940 (15 U.S.C. 80a-30(b)) is
amended by adding at the end the following:
``(5) Surveillance and risk assessment.--All persons
described in subsection (a) are subject at any time, or from
time to time, to such reasonable periodic, special, or other
information and document requests by representatives of the
Commission as the Commission, by rule or order, deems
necessary or appropriate to conduct surveillance or risk
assessments of the securities markets, persons registered
with the Commission under this title, or otherwise in
furtherance of the purposes of this title.''.
(3) Document requests.--Section 204 of the Investment
Advisers Act of 1940 (15 U.S.C. 80b-4) is amended by adding
at the end the following:
``(e) Surveillance and Risk Assessment.--All persons
described in subsection (a) are subject at any time, or from
time to time, to such reasonable periodic, special, or other
information and document requests by representatives of the
Commission as the Commission, by rule or order, deems
necessary or appropriate to conduct surveillance or risk
assessments of the securities markets, persons registered
with the Commission under this title, or otherwise in
furtherance of the purposes of this title.''.
(d) Protecting Confidentiality of Materials Submitted to
the Commission.--
(1) Securities exchange act of 1934.--Section 24 of the
Securities Exchange Act of 1934 (15 U.S.C. 78x) is amended--
(A) in subsection (d), by striking ``subsection (e)'' and
inserting ``subsection (f)'';
(B) by redesignating subsection (e) as subsection (f); and
(C) by inserting after subsection (d) the following:
``(e) Records Obtained From Registered Persons.--
``(1) In general.--Except as provided in subsection (f),
the Commission shall not be compelled to disclose records or
information obtained pursuant to section 17(b), or records or
information based upon or derived from such records or
information, if such records or information have been
obtained by the Commission for use in furtherance of the
purposes of this title, including surveillance, risk
assessments, or other regulatory and oversight activities.
``(2) Treatment of information.--For purposes of section
552 of title 5, United States Code, this subsection shall be
considered a statute described in subsection (b)(3)(B) of
such section 552. Collection of information pursuant to
section 17 shall be an administrative action involving an
agency against specific individuals or agencies pursuant to
section 3518(c)(1) of title 44, United States Code.''.
(2) Investment company act of 1940.--Section 31 of the
Investment Company Act of 1940 (15 U.S.C. 80a-30) is
amended--
(A) by striking subsection (c) and inserting the following:
``(c) Limitations on Disclosure by Commission.--
Notwithstanding any other provision of law, the Commission
shall not be compelled to disclose any records or information
provided to the Commission under this section, or records or
information based upon or derived from such records or
information, if such records or information have been
obtained by the Commission for use in furtherance of the
purposes of this title, including surveillance, risk
assessments, or other regulatory and oversight activities.
Nothing in this subsection authorizes the Commission to
withhold information from the Congress or prevent the
Commission from complying with a request for information from
any other Federal department or agency requesting the
information for purposes within the scope of jurisdiction of
that department or agency, or complying with an order of a
court of the United States in an action brought by the United
States or the Commission. For purposes of section 552 of
title 5, United States Code, this section shall be considered
a statute described in subsection (b)(3)(B) of such section
552. Collection of information pursuant to section 31 shall
be an administrative action involving an agency against
specific individuals or agencies pursuant to section
3518(c)(1) of title 44, United States Code.'';
(B) by striking subsection (d); and
(C) by redesignating subsections (e) and (f) as subsections
(d) and (e), respectively.
(3) Investment advisers act of 1940.--Section 210 of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-10) is amended
by adding at the end the following:
``(d) Limitations on Disclosure by the Commission.--
Notwithstanding any other provision of law, the Commission
shall not be compelled to disclose any records or information
provided to the Commission under this section, or records or
information based upon or derived from such records or
information, if such records or information have been
obtained by the Commission for use in furtherance of the
purposes of this title, including surveillance, risk
assessments, or other regulatory and oversight activities.
Nothing in this subsection authorizes the Commission to
withhold information from the Congress or prevent the
Commission from complying with a request for information from
any other Federal department or agency requesting the
information for purposes within the scope of jurisdiction of
that department or agency, or complying with an order of a
court of the United States in an action brought by the United
States or the Commission. For purposes of section 552 of
title 5, United States Code, this section shall be considered
a statute described in subsection (b)(3)(B) of such section
552. Collection of information pursuant to section 31 shall
be an administrative action involving an agency against
specific individuals or agencies pursuant to section
3518(c)(1) of title 44, United States Code.''.
(e) Expansion of Audit Information to Be Produced and
Exchanged.--Section 106 of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7216) is amended--
(1) by striking subsection (b) and inserting the following:
``(b) Production of Documents.--
``(1) Production by foreign firms.--If a foreign public
accounting firm performs material services upon which a
registered public accounting firm relies in the conduct of an
audit or interim review, or issues an audit report, performs
audit work, or conducts interim reviews, the foreign public
accounting firm shall--
``(A) produce the audit work papers of the foreign public
accounting firm and all other documents of the firm related
to any such audit work or interim review to the Commission or
the Board, upon the request of the Commission or the Board;
and
``(B) be subject to the jurisdiction of the courts of the
United States for purposes of enforcement of any request for
such documents.
``(2) Other production.--Any registered public accounting
firm that relies, in whole or in part, on the work of a
foreign public accounting firm in issuing an audit report,
performing audit work, or conducting an interim review,
shall--
``(A) produce the audit work papers of the foreign public
accounting firm and all other documents related to any such
work in response to a request for production by the
Commission or the Board; and
``(B) secure the agreement of any foreign public accounting
firm to such production, as a condition of the reliance by
the registered public accounting firm on the work of that
foreign public accounting firm.'';
(2) by redesignating subsection (d) as subsection (g); and
(3) by inserting after subsection (c) the following:
``(d) Service of Requests or Process.--
``(1) In general.--Any foreign public accounting firm that
performs work for a domestic registered public accounting
firm shall furnish to the domestic registered public
accounting firm a written irrevocable consent and power of
attorney that designates the domestic registered public
accounting firm as an agent upon whom may be served any
request by the Commission or the Board under this section and
any process, pleadings, or other papers in any action brought
to enforce this section.
``(2) Specific audit work.--Any foreign public accounting
firm that performs material services upon which a registered
public accounting firm relies in the conduct of an audit or
interim review, or issues an audit report, performs audit
work, or performs interim reviews, shall designate to the
Commission or the Board an agent in the United States upon
whom may be served any request by the Commission or the Board
under this section and any process, pleading, or other papers
in any action brought to enforce this section.
``(e) Sanctions.--A willful refusal to comply, in whole in
or in part, with any request by the Commission or the Board
under this section, shall be deemed a violation of this Act.
``(f) Other Means of Satisfying Production Obligations.--
Notwithstanding any other provisions of this section, the
staff of the Commission or the Board may allow a foreign
public accounting firm that is subject to this section to
meet production obligations under this section through
alternate means, such as through foreign counterparts of the
Commission or the Board.''.
(f) Sharing Privileged Information With Other
Authorities.--Section 24 of the Securities Exchange Act of
1934 (15 U.S.C. 78x) is amended--
(1) in subsection (d), as amended by subsection (d)(1)(A),
by striking ``subsection (f)'' and inserting ``subsection
(g)'';
(2) in subsection (e), as added by subsection (d)(1)(C), by
striking ``subsection (f)'' and inserting ``subsection (g)'';
(3) by redesignating subsection (f) as subsection (g); and
(4) by inserting after subsection (e) the following:
``(f) Sharing Privileged Information With Other
Authorities.--
``(1) Privileged information provided by the commission.--
The Commission shall not be deemed to have waived any
privilege applicable to any information by transferring

[[Page S3277]]

that information to or permitting that information to be used
by--
``(A) any agency (as defined in section 6 of title 18,
United States Code);
``(B) the Public Company Accounting Oversight Board;
``(C) any self-regulatory organization;
``(D) any foreign securities authority;
``(E) any foreign law enforcement authority; or
``(F) any State securities or law enforcement authority.
``(2) Nondisclosure of privileged information provided to
the commission.--The Commission shall not be compelled to
disclose privileged information obtained from any foreign
securities authority, or foreign law enforcement authority,
if the authority has in good faith determined and represented
to the Commission that the information is privileged.
``(3) Nonwaiver of privileged information provided to the
commission.--
``(A) In general.--Federal agencies, State securities and
law enforcement authorities, self-regulatory organizations,
and the Public Company Accounting Oversight Board shall not
be deemed to have waived any privilege applicable to any
information by transferring that information to or permitting
that information to be used by the Commission.
``(B) Exception.--The provisions of subparagraph (A) shall
not apply to a self-regulatory organization or the Public
Company Accounting Oversight Board with respect to
information used by the Commission in an action against such
organization.
``(4) Definitions.--For purposes of this subsection--
``(A) the term `privilege' includes any work-product
privilege, attorney-client privilege, governmental privilege,
or other privilege recognized under Federal, State, or
foreign law;
``(B) the term `foreign law enforcement authority' means
any foreign authority that is empowered under foreign law to
detect, investigate or prosecute potential violations of law;
and
``(C) the term `State securities or law enforcement
authority' means the authority of any State or territory that
is empowered under State or territory law to detect,
investigate, or prosecute potential violations of law.''.
(g) Conforming Amendment With Respect to Registration.--
Section 102(b)(3)(A) of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7212(b)(3)(A)) is amended by striking ``by the Board''
and inserting ``by the Commission or the Board''.

SEC. 995. MODERNIZATION OF INVESTOR PROTECTIONS.

(a) Beneficial Ownership and Short-Swing Profit
Reporting.--
(1) Beneficial ownership reporting.--Section 13 of the
Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended--
(A) in subsection (d)--
(i) in paragraph (1)--

(I) by inserting after ``within ten days after such
acquisition,'' the following: ``or within such shorter period
as the Commission may establish, by rule,''; and
(II) by striking ``send to the issuer of the security at
its principal executive office, by registered or certified
mail, send to each exchange on which the security is traded,
and''; and

(ii) in paragraph (2)--

(I) by striking ``in the statements to the issuer and the
exchange, and''; and
(II) by striking ``shall be transmitted to the issuer and
the exchange and''; and

(B) in subsection (g)--
(i) in paragraph (1), by striking ``shall send to the
issuer of the security and''; and
(ii) in paragraph (2)--

(I) by striking ``sent to the issuer and''; and
(II) by striking ``shall be transmitted to the issuer
and''.

(2) Short-swing profit reporting.--Section 16(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78p(a)) is
amended--
(A) in paragraph (1), by striking ``(and, if such security
is registered on a national securities exchange, also with
the exchange)''; and
(B) in paragraph (2)(B), by inserting after ``officer'' the
following: ``, or within such shorter period as the
Commission may establish, by rule''.
(b) Enhanced Application of Antifraud Provisions.--The
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
amended--
(1) in section 9--
(A) by striking ``registered on a national securities
exchange'' each place that term appears and inserting ``other
than a government security'';
(B) in subsection (b), by striking ``by use of any facility
of a national securities exchange,''; and
(C) in subsection (c), by inserting after ``unlawful for
any'' the following: ``broker, dealer, or'';
(2) in section 10(a)(1), by striking ``registered on a
national securities exchange'' and inserting ``other than a
government security''; and
(3) in section 15(c)(1)(A), by striking ``otherwise than on
a national securities exchange of which it is a member''.
(c) Definition of ``Interested Person''.--Section
2(a)(19)(A) of the Investment Company Act of 1940 (15 U.S.C.
80a-2(a)(19)(A)) is amended--
(1) in clause (vii), by striking the colon at the end and
inserting a comma;
(2) by inserting before ``Provided,'' the following:
``(viii) any natural person who is a member of a class of
persons who the Commission, by rule or regulation, determines
are unlikely to exercise an appropriate degree of
independence as a result of--

``(I) a material business or professional relationship with
such company or any affiliated person of such company; or
``(II) a close familial relationship with any natural
person who is an affiliated person of such company:''; and

(3) in clause (vii), by striking ``two'' and inserting
``5''.
(d) Lost and Stolen Securities.--Section 17(f)(1) of the
Securities Exchange Act of 1934 (15 U.S.C. 78q(f)(1)) is
amended--
(1) in subparagraph (A), by striking ``missing, lost,
counterfeit, or stolen securities'' and inserting
``securities that are missing, lost, counterfeit, stolen,
cancelled, or any other category of securities as the
Commission, by rule, may prescribe''; and
(2) in subparagraph (B), by striking ``or stolen'' and
inserting ``stolen, cancelled, or reported in such other
manner as the Commission, by rule, may prescribe''.
(e) Fingerprinting.--Section 17(f)(2) of the Securities
Exchange Act of 1934 (15 U.S.C. 78q(f)(2)) is amended--
(1) in the first sentence, by striking ``and registered
clearing agency,'' and inserting ``registered clearing
agency, registered securities information processor, national
securities exchange, and national securities association'';
and
(2) in the second sentence, by striking ``or clearing
agency,'' and inserting ``clearing agency, securities
information processor, national securities exchange, or
national securities association,''.

SEC. 996. COMMISSION ORGANIZATIONAL STUDY AND REFORM.

(a) Study Required.--
(1) In general.--Not later than 90 days after the date of
the enactment of this Act, the Securities and Exchange
Commission (in this section referred to as the
``Commission'') shall hire an independent consultant of high
caliber who has expertise in organizational restructuring and
the operations of capital markets to examine the internal
operations, structure, funding, and the need for
comprehensive reform of the Commission, as well as the
relationship of the Commission with and the reliance by the
Commission on self-regulatory organizations and other
entities relevant to the regulation of securities and the
protection of securities investors that are under the
oversight of the Commission.
(2) Specific areas for study.--The study required under
paragraph (1) shall, at a minimum, include the study of--
(A) the possible elimination of unnecessary or redundant
units at the Commission;
(B) improving communications between offices and divisions
of the Commission;
(C) the need to put in place a clear chain-of-command
structure, particularly for enforcement examinations and
compliance inspections;
(D) the effect of high-frequency trading and other
technological advances on the market and what the Commission
requires to monitor the effect of such trading and advances
on the market;
(E) the hiring authorities, workplace policies, and
personal practices of the Commission, including--
(i) whether there is a need to further streamline hiring
authorities for those who are not lawyers, accountants,
compliance examiners, or economists;
(ii) whether there is a need for further pay reforms;
(iii) the diversity of skill sets of Commission employees
and whether the present skill set diversity efficiently and
effectively fosters the mission of the Commission of investor
protection; and
(iv) the application of civil service laws by the
Commission;
(F) whether the oversight by the Commission of, and
reliance by the Commission on, self-regulatory organizations
promotes efficient and effective governance for the
securities markets; and
(G) whether adjusting the reliance by the Commission on
self-regulatory organizations is necessary to promote more
efficient and effective governance for the securities
markets.
(b) Consultant Report.--Not later than 150 days after the
independent consultant is retained under subsection (a), the
independent consultant shall submit a report to the
Commission and to Congress containing--
(1) a detailed description of any findings and conclusions
made while carrying out the study required under subsection
(a)(1); and
(2) recommendations for legislative, regulatory, or
administrative action that the independent consultant
determines appropriate to enable the Commission and other
entities on which the independent consultant reports to
perform the missions of the Commission, whether mandated by
statute or otherwise.
(c) Commission Report.--Not later than 6 months after the
date on which the consultant submits the report under
subsection (b), and every 6 months thereafter during the 2-
year period following the date on which the consultant
submits the report under subsection (b), the Commission shall
submit a report to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the

[[Page S3278]]

House of Representatives describing the implementation by the
Commission of the regulatory and administrative
recommendations contained in the report of the independent
consultant under subsection (b).

SEC. 997. MUNICIPAL SECURITIES RULEMAKING BOARD.

Section 975(b)(1) of this Act is amended by striking
subparagraph (B) and inserting the following:
``(B) by striking the second sentence and inserting the
following `The members of the Board shall serve as members
for a term of 3 years or for such other terms as specified by
rules of the Board pursuant to paragraph (2)(B), and shall
consist of (A) 8 independent individuals, at least 1 of whom
shall be representative of institutional or retail investors
in municipal securities, at least 1 of whom shall be
representative of municipal entities, and at least 1 of whom
shall be a member of the public with knowledge of or
experience in the municipal industry (which members are
hereinafter referred to as ``public representatives''); and
(B) 7 individuals who are associated with a broker, dealer,
municipal securities dealer, or municipal advisor, including
at least 1 individual who is associated with and
representative of brokers, dealers, or municipal securities
dealers that are not banks or subsidiaries or departments or
divisions of banks (which members are hereinafter referred to
as ``broker-dealer representatives''), at least 1 individual
who is associated with and representative of municipal
securities dealers which are banks or subsidiaries or
departments or divisions of banks (which members are
hereinafter referred to as ``bank representatives''), and at
least 1 individual who is associated with a municipal advisor
(which member is hereinafter referred to as the ``advisor
representative'').' ''.
______

SA 3855. Mr. REED 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:

On page 1055, after line 22, add the following:
(c) Liability for Sale of Securities.--Section 12 of the
Securities Act of 1933 (15 U.S.C. 77l) is amended--
(1) in subsection (a)(2)--
(A) by inserting after ``subsection (a) thereof'' the
following: ``, and whether or not exempted by the provisions
of section 4''; and
(B) by inserting after ``prospectus'' the following: ``,
other offering document,''; and
(2) in subsection (b), by inserting after ``prospectus''
the following: ``, other offering document,''.
______

SA 3856. Mr. REED 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:

On page 1055, after line 22, add the following:
(c) Authority to Impose Conditions on the Availability of
Certain Exemptions.--
(1) Authority established.--Section 4 of the Securities Act
of 1933 (15 U.S.C. 77d) is amended--
(A) by striking ``The provisions of section 5'' and
inserting the following:
``(a) In General.--The provisions of section 5''; and
(B) by adding at the end the following:
``(b) Authority to Impose Conditions.--The Commission may,
by rules and regulations, condition the availability of any
of the exemptions under subsection (a) on such disclosure,
filing, or other requirements as the Commission may prescribe
as necessary or appropriate in the public interest or for the
protection of investors.''.
(2) Conforming amendments.--
(A) Securities act of 1933.--The Securities Act of 1933 (15
U.S.C. 77a et seq.) is amended--
(i) in section 16(a)(3) (15 U.S.C. 77p(a)(3)) is amended by
striking ``section 4(2)'' and inserting ``section 4(a)(2)'';
and
(ii) in section 18(b)(4) (15 U.S.C. 77r(b)(4))--

(I) in subparagraph (A), by striking ``section 4'' and
inserting ``section 4(a)'';
(II) in subparagraph (B), by striking ``section 4(4)'' and
inserting ``section 4(a)(4)''; and
(III) in subparagraph (D), by striking ``section 4(2)''
each place that term appears and inserting ``section
4(a)(2)''.

(B) Securities exchange act of 1934.--The Securities
Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended--
(i) in section 15A(j) (15 U.S.C. 78o-3(j)), by striking
``4(2), or 4(6)'' and inserting ``4(a)(2), or 4(a)(6)''; and
(ii) in section 28(f)(5)(E) (15 U.S.C. 778bb(f)) by
striking ``section 4(2)'' and inserting ``section 4(a)(2)''.
(C) Revised statutes.--Section 5136 of the Revised Statutes
(12 U.S.C. 24) is amended, in the seventh paragraph, by
striking ``section 4(5) of the Securities Act of 1933 (15
U.S.C. 77d(5))'' and inserting ``section 4(a)(5) of the
Securities Act of 1933''.
(D) Home owners' loan act.--Section 5(c)(1)(R)(i) of the
Home Owners' Loan Act (12 U.S.C. 1464(c)(1)(R)(i)) by
striking ``section 4(5)'' and inserting ``section 4(a)(5)''.
(E) Federal credit union act.--Section 107(15)(A) of the
Federal Credit Union Act (12 U.S.C. 1757(15)(A)) is amended
by striking ``section 4(5) of the Securities Act of 1933 (15
U.S.C. 77d(5))'' and inserting ``section 4(a)(5) of the
Securities Act of 1933''.
(F) Secondary mortgage market enhancement act of 1984.--
Section 106(a)(1) of the Secondary Mortgage Market
Enhancement Act of 1984 (15 U.S.C. 77r-1(a)(1)) is amended by
striking ``section 4(5)'' each place that term appears and
inserting ``section 4(a)(5)''.
______

SA 3857. Mr. REED 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:

Page 1268, strike line 24 and all that follows through page
1270, line 10, and insert the following:
(c) Examinations.--
(1) In general.--The prudential regulator shall, on a
periodic basis, examine, or require reports from, each
institution referred to in subsection (a) for purposes of
ensuring and enforcing compliance with the requirements of
Federal consumer financial law.
(2) Bureau role in supervision.--
(A) Agency responsibilities.--The prudential regulator
shall provide all reports, records, and documentation related
to the examination process to the Bureau on a timely and
ongoing basis.
(B) Bureau involvement.--The Bureau may, at its discretion,
include an examiner on any examination conducted under
paragraph (1). The prudential regulator shall involve such
Bureau examiner in the entire examination process, including
setting the scope of an examination, participating in the
examination, and providing input on the examination report,
matters requiring attention and examination ratings.
(d) Enforcement.--
(1) In general.--Notwithstanding any other provision of
this title, the prudential regulator shall have primary
authority to enforce compliance with any Federal consumer
financial law by institutions referred to in subsection (a)
of any of the consumer financial laws.
(2) Coordination with prudential regulator.--
(A) Referral.--
(i) In general.--When the Bureau has reason to believe that
an institution described in subsection (a) has engaged in a
material violation of a Federal consumer financial law, the
Bureau may recommend in writing to the appropriate agency
that the appropriate agency initiate an enforcement
proceeding to the extent the appropriate agency is authorized
by that Federal law or by this title.
(ii) Explanation.--Any recommendation under clause (i)
shall be accompanied by a written explanation of the concerns
giving rise to the recommendation.
(B) Backstop enforcement authority of the bureau.--If the
appropriate agency does not, before the end of the 120-day
period beginning on the date on which the appropriate agency
receives a recommendation under subparagraph (A), initiate an
enforcement proceeding, the Bureau may initiate an
enforcement proceeding as permitted by Federal law.
______

SA 3858. Mr. REED (for himself and Mr. Akaka) 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:

On page 1243, strike line 15, and all that follows through
page 1248, line 18.
______

SA 3859. Mr. REED submitted an amendment intended to be proposed by
him to the bill S. 3217, to promote the

[[Page S3279]]

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 section 1044 and insert the following:

SEC. 1044. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS
AND SUBSIDIARIES CLARIFIED.

(a) In General.--Chapter One of title LXII of the Revised
Statutes of the United States (12 U.S.C. 21 et seq.) is
amended by inserting after section 5136B the following new
section:

``SEC. 5136C. STATE LAW PREEMPTION STANDARDS FOR NATIONAL
BANKS AND SUBSIDIARIES CLARIFIED.

``(a) Definitions.--For purposes of this section--
``(1) the term `national bank' includes--
``(A) any bank organized under the laws of the United
States;
``(B) any affiliate of a national bank;
``(C) any subsidiary of a national bank; and
``(D) any Federal branch established in accordance with the
International Banking Act of 1978;
``(2) the terms `affiliate', `subsidiary', `includes', and
`including' have the same meanings as in section 3 of the
Federal Deposit Insurance Act; and
``(3) the term `State consumer law' means any law of a
State that regulates the manner, content, or terms and
conditions of any financial transaction (as may be authorized
for national banks to engage in), or any account related
thereto, with respect to a consumer.
``(b) State Consumer Laws of General Application.--Except
as provided in subsection (c), and notwithstanding any other
provision of Federal law, any consumer protection provision
of a State consumer law of general application, shall apply
to a national bank operating within the jurisdiction of that
State, including any law relating to--
``(1) unfair or deceptive acts or practices;
``(2) consumer fraud; and
``(3) repossession, foreclosure, and debt collections.
``(c) Exceptions.--
``(1) In general.--Subsection (b) shall not apply with
respect to any State consumer law, if--
``(A) the State consumer law discriminates against national
banks; or
``(B) the State consumer law is inconsistent with
provisions of Federal law, other than this title, but only to
the extent of the inconsistency (as determined in accordance
with the provision of the other Federal law).
``(2) Rule of construction.--For purposes of paragraph (1),
a State consumer law is not inconsistent with Federal law, if
the protection that the State consumer law affords consumers
is greater than the protection provided under Federal law, as
determined by the Bureau of Consumer Financial Protection.
``(d) State Banking Laws Enacted Pursuant to Federal Law.--
``(1) In general.--Except as provided in paragraph (2), and
notwithstanding any other provision of Federal law, any State
consumer law shall apply to a national bank operating within
the jurisdiction of that State, if such State consumer law--
``(A) is applicable to State banks; and
``(B) was enacted pursuant to or in accordance with, and is
not inconsistent with, an Act of Congress, including the
Gramm-Leach-Bliley Act, the Consumer Credit Protection Act,
and the Real Estate Settlement Procedures Act of 1974, that
explicitly or by implication, permits States to exceed or
supplement the requirements of any comparable Federal law.
``(2) Exceptions.--
``(A) In general.--Paragraph (1) shall not apply with
respect to any State law, if--
``(i) the State consumer law discriminates against national
banks; or
``(ii) the State consumer law is inconsistent with
provisions of Federal law, other than this title, but only to
the extent of the inconsistency (as determined in accordance
with the provision of the other Federal law).
``(B) Rule of construction.--For purposes of subparagraph
(A), a State consumer law is not inconsistent with Federal
law, if the protection that the State consumer law affords
consumers is greater than the protection provided under
Federal law, as determined Bureau of Consumer Financial
Protection.
``(e) No Negative Implications for Applicability of Other
State Laws.--No provision of this section shall be construed
as altering or affecting the applicability to national banks
of any State law which is not described in this section.
``(f) Effect of Transfer of Transaction.--State consumer
law applicable to a transaction at the inception of the
transaction may not be preempted under Federal law solely
because a national bank subsequently acquires the asset or
instrument that is the subject of the transaction.
``(g) Denial of Preemption Not a Deprivation of a Civil
Right.--The preemption of any provision of the law of any
State with respect to any national bank shall not be treated
as a right, privilege, or immunity for purposes of section
1979 of the Revised Statutes of the United States (42 U.S.C.
1983).''.
(b) Clerical Amendment.--The table of sections for chapter
one of title LXII of the Revised Statutes of the United
States is amended by inserting after the item relating to
section 5136B the following new item:

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

____________________