< Back to H.R. 4173 (111th Congress, 2009–2010)

Text of the Dodd-Frank Wall Street Reform and Consumer Protection Act

This bill was enacted after being signed by the President on July 21, 2010. The text of the bill below is as of Jul 15, 2010 (Passed Congress/Enrolled Bill).

Source: GPO

I

One Hundred Eleventh Congress of the United States of America

At the Second Session

H. R. 4173

AN ACT

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.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Dodd-Frank Wall Street Reform and Consumer Protection Act.

(b)

Table of Contents

The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definitions.

Sec. 3. Severability.

Sec. 4. Effective date.

Sec. 5. Budgetary effects.

Sec. 6. Antitrust savings clause.

TITLE I—Financial Stability

Sec. 101. Short title.

Sec. 102. Definitions.

Subtitle A—Financial Stability Oversight Council

Sec. 111. Financial Stability Oversight Council established.

Sec. 112. Council authority.

Sec. 113. Authority to require supervision and regulation of certain nonbank financial companies.

Sec. 114. Registration of nonbank financial companies supervised by the Board of Governors.

Sec. 115. Enhanced supervision and prudential standards for nonbank financial companies supervised by the Board of Governors and certain bank holding companies.

Sec. 116. Reports.

Sec. 117. Treatment of certain companies that cease to be bank holding companies.

Sec. 118. Council funding.

Sec. 119. Resolution of supervisory jurisdictional disputes among member agencies.

Sec. 120. Additional standards applicable to activities or practices for financial stability purposes.

Sec. 121. Mitigation of risks to financial stability.

Sec. 122. GAO Audit of Council.

Sec. 123. Study of the effects of size and complexity of financial institutions on capital market efficiency and economic growth.

Subtitle B—Office of Financial Research

Sec. 151. Definitions.

Sec. 152. Office of Financial Research established.

Sec. 153. Purpose and duties of the Office.

Sec. 154. Organizational structure; responsibilities of primary programmatic units.

Sec. 155. Funding.

Sec. 156. Transition oversight.

Subtitle C—Additional Board of Governors authority for certain nonbank financial companies and bank holding companies

Sec. 161. Reports by and examinations of nonbank financial companies by the Board of Governors.

Sec. 162. Enforcement.

Sec. 163. Acquisitions.

Sec. 164. Prohibition against management interlocks between certain financial companies.

Sec. 165. Enhanced supervision and prudential standards for nonbank financial companies supervised by the Board of Governors and certain bank holding companies.

Sec. 166. Early remediation requirements.

Sec. 167. Affiliations.

Sec. 168. Regulations.

Sec. 169. Avoiding duplication.

Sec. 170. Safe harbor.

Sec. 171. Leverage and risk-based capital requirements.

Sec. 172. Examination and enforcement actions for insurance and orderly liquidation purposes.

Sec. 173. Access to United States financial market by foreign institutions.

Sec. 174. Studies and reports on holding company capital requirements.

Sec. 175. International policy coordination.

Sec. 176. Rule of construction.

TITLE II—Orderly liquidation authority

Sec. 201. Definitions.

Sec. 202. Judicial review.

Sec. 203. Systemic risk determination.

Sec. 204. Orderly liquidation of covered financial companies.

Sec. 205. Orderly liquidation of covered brokers and dealers.

Sec. 206. Mandatory terms and conditions for all orderly liquidation actions.

Sec. 207. Directors not liable for acquiescing in appointment of receiver.

Sec. 208. Dismissal and exclusion of other actions.

Sec. 209. Rulemaking; non-conflicting law.

Sec. 210. Powers and duties of the Corporation.

Sec. 211. Miscellaneous provisions.

Sec. 212. Prohibition of circumvention and prevention of conflicts of interest.

Sec. 213. Ban on certain activities by senior executives and directors.

Sec. 214. Prohibition on taxpayer funding.

Sec. 215. Study on secured creditor haircuts.

Sec. 216. Study on bankruptcy process for financial and nonbank financial institutions

Sec. 217. Study on international coordination relating to bankruptcy process for nonbank financial institutions

TITLE III—Transfer of powers to the Comptroller of the Currency, the Corporation, and the Board of Governors

Sec. 300. Short title.

Sec. 301. Purposes.

Sec. 302. Definition.

Subtitle A—Transfer of powers and duties

Sec. 311. Transfer date.

Sec. 312. Powers and duties transferred.

Sec. 313. Abolishment.

Sec. 314. Amendments to the Revised Statutes.

Sec. 315. Federal information policy.

Sec. 316. Savings provisions.

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

Sec. 318. Funding.

Sec. 319. Contracting and leasing authority.

Subtitle B—Transitional provisions

Sec. 321. Interim use of funds, personnel, and property of the Office of Thrift Supervision.

Sec. 322. Transfer of employees.

Sec. 323. Property transferred.

Sec. 324. Funds transferred.

Sec. 325. Disposition of affairs.

Sec. 326. Continuation of services.

Sec. 327. Implementation plan and reports.

Subtitle C—Federal Deposit Insurance Corporation

Sec. 331. Deposit insurance reforms.

Sec. 332. Elimination of procyclical assessments.

Sec. 333. Enhanced access to information for deposit insurance purposes.

Sec. 334. Transition reserve ratio requirements to reflect new assessment base.

Sec. 335. Permanent increase in deposit and share insurance.

Sec. 336. Management of the Federal Deposit Insurance Corporation.

Subtitle D—Other matters

Sec. 341. Branching.

Sec. 342. Office of Minority and Women Inclusion.

Sec. 343. Insurance of transaction accounts.

Subtitle E—Technical and conforming amendments

Sec. 351. Effective date.

Sec. 352. Balanced Budget and Emergency Deficit Control Act of 1985.

Sec. 353. Bank Enterprise Act of 1991.

Sec. 354. Bank Holding Company Act of 1956.

Sec. 355. Bank Holding Company Act Amendments of 1970.

Sec. 356. Bank Protection Act of 1968.

Sec. 357. Bank Service Company Act.

Sec. 358. Community Reinvestment Act of 1977.

Sec. 359. Crime Control Act of 1990.

Sec. 360. Depository Institution Management Interlocks Act.

Sec. 361. Emergency Homeowners' Relief Act.

Sec. 362. Federal Credit Union Act.

Sec. 363. Federal Deposit Insurance Act.

Sec. 364. Federal Home Loan Bank Act.

Sec. 365. Federal Housing Enterprises Financial Safety and Soundness Act of 1992.

Sec. 366. Federal Reserve Act.

Sec. 367. Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

Sec. 368. Flood Disaster Protection Act of 1973.

Sec. 369. Home Owners' Loan Act.

Sec. 370. Housing Act of 1948.

Sec. 371. Housing and Community Development Act of 1992.

Sec. 372. Housing and Urban-Rural Recovery Act of 1983.

Sec. 373. National Housing Act.

Sec. 374. Neighborhood Reinvestment Corporation Act.

Sec. 375. Public Law 93–100.

Sec. 376. Securities Exchange Act of 1934.

Sec. 377. Title 18, United States Code.

Sec. 378. Title 31, United States Code.

TITLE IV—Regulation of advisers to hedge funds and others

Sec. 401. Short title.

Sec. 402. Definitions.

Sec. 403. Elimination of private adviser exemption; limited exemption for foreign private advisers; limited intrastate exemption.

Sec. 404. Collection of systemic risk data; reports; examinations; disclosures.

Sec. 405. Disclosure provision amendment.

Sec. 406. Clarification of rulemaking authority.

Sec. 407. Exemption of venture capital fund advisers.

Sec. 408. Exemption of and record keeping by private equity fund advisers.

Sec. 409. Family offices.

Sec. 410. State and Federal responsibilities; asset threshold for Federal registration of investment advisers.

Sec. 411. Custody of client assets.

Sec. 412. Adjusting the accredited investor standard.

Sec. 413. GAO study and report on accredited investors.

Sec. 414. GAO study on self-regulatory organization for private funds.

Sec. 415. Commission study and report on short selling.

Sec. 416. Transition period.

TITLE V—Insurance

Subtitle A—Office of National Insurance

Sec. 501. Short title.

Sec. 502. Federal Insurance Office.

Subtitle B—State-Based Insurance Reform

Sec. 511. Short title.

Sec. 512. Effective date.

PART I—Nonadmitted insurance

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

Sec. 522. Regulation of nonadmitted insurance by insured’s home State.

Sec. 523. Participation in national producer database.

Sec. 524. Uniform standards for surplus lines eligibility.

Sec. 525. Streamlined application for commercial purchasers.

Sec. 526. GAO study of nonadmitted insurance market.

Sec. 527. Definitions.

PART II—Reinsurance

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

Sec. 532. Regulation of reinsurer solvency.

Sec. 533. Definitions.

PART III—Rule of construction

Sec. 541. Rule of construction.

Sec. 542. Severability.

TITLE VI—Improvements to regulation of bank and savings association holding companies and depository institutions

Sec. 601. Short title.

Sec. 602. Definition.

Sec. 603. Moratorium and study on treatment of credit card banks, industrial loan companies, and certain other companies under the Bank Holding Company Act of 1956.

Sec. 604. Reports and examinations of holding companies; regulation of functionally regulated subsidiaries.

Sec. 605. Assuring consistent oversight of permissible activities of depository institution subsidiaries of holding companies.

Sec. 606. Requirements for financial holding companies to remain well capitalized and well managed.

Sec. 607. Standards for interstate acquisitions.

Sec. 608. Enhancing existing restrictions on bank transactions with affiliates.

Sec. 609. Eliminating exceptions for transactions with financial subsidiaries.

Sec. 610. Lending limits applicable to credit exposure on derivative transactions, repurchase agreements, reverse repurchase agreements, and securities lending and borrowing transactions.

Sec. 611. Consistent treatment of derivative transactions in lending limits.

Sec. 612. Restriction on conversions of troubled banks.

Sec. 613. De novo branching into States.

Sec. 614. Lending limits to insiders.

Sec. 615. Limitations on purchases of assets from insiders.

Sec. 616. Regulations regarding capital levels.

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

Sec. 618. Securities holding companies.

Sec. 619. Prohibitions on proprietary trading and certain relationships with hedge funds and private equity funds.

Sec. 620. Study of bank investment activities.

Sec. 621. Conflicts of interest.

Sec. 622. Concentration limits on large financial firms.

Sec. 623. Interstate merger transactions.

Sec. 624. Qualified thrift lenders.

Sec. 625. Treatment of dividends by certain mutual holding companies.

Sec. 626. Intermediate holding companies.

Sec. 627. Interest-bearing transaction accounts authorized.

Sec. 628. Credit card bank small business lending.

TITLE VII—Wall Street Transparency and Accountability

Sec. 701. Short title.

Subtitle A—Regulation of Over-the-Counter Swaps Markets

PART I—Regulatory authority

Sec. 711. Definitions.

Sec. 712. Review of regulatory authority.

Sec. 713. Portfolio margining conforming changes.

Sec. 714. Abusive swaps.

Sec. 715. Authority to prohibit participation in swap activities.

Sec. 716. Prohibition against Federal Government bailouts of swaps entities.

Sec. 717. New product approval CFTC—SEC process.

Sec. 718. Determining status of novel derivative products.

Sec. 719. Studies.

Sec. 720. Memorandum.

PART II—Regulation of Swap Markets

Sec. 721. Definitions.

Sec. 722. Jurisdiction.

Sec. 723. Clearing.

Sec. 724. Swaps; segregation and bankruptcy treatment.

Sec. 725. Derivatives clearing organizations.

Sec. 726. Rulemaking on conflict of interest.

Sec. 727. Public reporting of swap transaction data.

Sec. 728. Swap data repositories.

Sec. 729. Reporting and recordkeeping.

Sec. 730. Large swap trader reporting.

Sec. 731. Registration and regulation of swap dealers and major swap participants.

Sec. 732. Conflicts of interest.

Sec. 733. Swap execution facilities.

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

Sec. 735. Designated contract markets.

Sec. 736. Margin.

Sec. 737. Position limits.

Sec. 738. Foreign boards of trade.

Sec. 739. Legal certainty for swaps.

Sec. 740. Multilateral clearing organizations.

Sec. 741. Enforcement.

Sec. 742. Retail commodity transactions.

Sec. 743. Other authority.

Sec. 744. Restitution remedies.

Sec. 745. Enhanced compliance by registered entities.

Sec. 746. Insider trading.

Sec. 747. Antidisruptive practices authority.

Sec. 748. Commodity whistleblower incentives and protection.

Sec. 749. Conforming amendments.

Sec. 750. Study on oversight of carbon markets.

Sec. 751. Energy and environmental markets advisory committee.

Sec. 752. International harmonization.

Sec. 753. Anti-manipulation authority.

Sec. 754. Effective date.

Subtitle B—Regulation of Security-Based Swap Markets

Sec. 761. Definitions under the Securities Exchange Act of 1934.

Sec. 762. Repeal of prohibition on regulation of security-based swap agreements.

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

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

Sec. 765. Rulemaking on conflict of interest.

Sec. 766. Reporting and recordkeeping.

Sec. 767. State gaming and bucket shop laws.

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

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

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

Sec. 771. Other authority.

Sec. 772. Jurisdiction.

Sec. 773. Civil penalties.

Sec. 774. Effective date.

TITLE VIII—Payment, clearing, and settlement supervision

Sec. 801. Short title.

Sec. 802. Findings and purposes.

Sec. 803. Definitions.

Sec. 804. Designation of systemic importance.

Sec. 805. Standards for systemically important financial market utilities and payment, clearing, or settlement activities.

Sec. 806. Operations of designated financial market utilities.

Sec. 807. Examination of and enforcement actions against designated financial market utilities.

Sec. 808. Examination of and enforcement actions against financial institutions subject to standards for designated activities.

Sec. 809. Requests for information, reports, or records.

Sec. 810. Rulemaking.

Sec. 811. Other authority.

Sec. 812. Consultation.

Sec. 813. Common framework for designated clearing entity risk management.

Sec. 814. Effective date.

Title IX—Investor protections and improvements to the regulation of securities

Sec. 901. Short title.

Subtitle A—Increasing investor protection

Sec. 911. Investor Advisory Committee established.

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

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

Sec. 914. Study on enhancing investment adviser examinations.

Sec. 915. Office of the Investor Advocate.

Sec. 916. Streamlining of filing procedures for self-regulatory organizations.

Sec. 917. Study regarding financial literacy among investors.

Sec. 918. Study regarding mutual fund advertising.

Sec. 919. Clarification of Commission authority to require investor disclosures before purchase of investment products and services.

Sec. 919A. Study on conflicts of interest.

Sec. 919B. Study on improved investor access to information on investment advisers and broker-dealers.

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

Sec. 919D. Ombudsman.

Subtitle B—Increasing regulatory enforcement and remedies

Sec. 921. Authority to restrict mandatory pre-dispute arbitration.

Sec. 922. Whistleblower protection.

Sec. 923. Conforming amendments for whistleblower protection.

Sec. 924. Implementation and transition provisions for whistleblower protection.

Sec. 925. Collateral bars.

Sec. 926. Disqualifying felons and other bad actors from Regulation D offerings.

Sec. 927. Equal treatment of self-regulatory organization rules.

Sec. 928. Clarification that section 205 of the Investment Advisers Act of 1940 does not apply to State-registered advisers.

Sec. 929. Unlawful margin lending.

Sec. 929A. Protection for employees of subsidiaries and affiliates of publicly traded companies.

Sec. 929B. Fair Fund amendments.

Sec. 929C. Increasing the borrowing limit on Treasury loans.

Sec. 929D. Lost and stolen securities.

Sec. 929E. Nationwide service of subpoenas.

Sec. 929F. Formerly associated persons.

Sec. 929G. Streamlined hiring authority for market specialists.

Sec. 929H. SIPC Reforms.

Sec. 929I. Protecting confidentiality of materials submitted to the Commission.

Sec. 929J. Expansion of audit information to be produced and exchanged.

Sec. 929K. Sharing privileged information with other authorities.

Sec. 929L. Enhanced application of antifraud provisions.

Sec. 929M. Aiding and abetting authority under the Securities Act and the Investment Company Act.

Sec. 929N. Authority to impose penalties for aiding and abetting violations of the Investment Advisers Act.

Sec. 929O. Aiding and abetting standard of knowledge satisfied by recklessness.

Sec. 929P. Strengthening enforcement by the Commission.

Sec. 929Q. Revision to recordkeeping rule.

Sec. 929R. Beneficial ownership and short-swing profit reporting.

Sec. 929S. Fingerprinting.

Sec. 929T. Equal treatment of self-regulatory organization rules.

Sec. 929U. Deadline for completing examinations, inspections and enforcement actions.

Sec. 929V. Security Investor Protection Act amendments.

Sec. 929W. Notice to missing security holders.

Sec. 929X. Short sale reforms.

Sec. 929Y. Study on extraterritorial private rights of action.

Sec. 929Z. GAO study on securities litigation.

Subtitle C—Improvements to the Regulation of Credit Rating Agencies

Sec. 931. Findings.

Sec. 932. Enhanced regulation, accountability, and transparency of nationally recognized statistical rating organizations.

Sec. 933. State of mind in private actions.

Sec. 934. Referring tips to law enforcement or regulatory authorities.

Sec. 935. Consideration of information from sources other than the issuer in rating decisions.

Sec. 936. Qualification standards for credit rating analysts.

Sec. 937. Timing of regulations.

Sec. 938. Universal ratings symbols.

Sec. 939. Removal of statutory references to credit ratings.

Sec. 939A. Review of reliance on ratings.

Sec. 939B. Elimination of exemption from fair disclosure rule.

Sec. 939C. Securities and Exchange Commission study on strengthening credit rating agency independence.

Sec. 939D. Government Accountability Office study on alternative business models.

Sec. 939E. Government Accountability Office study on the creation of an independent professional analyst organization.

Sec. 939F. Study and rulemaking on assigned credit ratings.

Sec. 939G. Effect of Rule 436(g).

Sec. 939H. Sense of Congress.

Subtitle D—Improvements to the Asset-Backed Securitization Process

Sec. 941. Regulation of credit risk retention.

Sec. 942. Disclosures and reporting for asset-backed securities.

Sec. 943. Representations and warranties in asset-backed offerings.

Sec. 944. Exempted transactions under the Securities Act of 1933.

Sec. 945. Due diligence analysis and disclosure in asset-backed securities issues.

Sec. 946. Study on the macroeconomic effects of risk retention requirements.

Subtitle E—Accountability and Executive Compensation

Sec. 951. Shareholder vote on executive compensation disclosures.

Sec. 952. Compensation committee independence.

Sec. 953. Executive compensation disclosures.

Sec. 954. Recovery of erroneously awarded compensation.

Sec. 955. Disclosure regarding employee and director hedging.

Sec. 956. Enhanced compensation structure reporting.

Sec. 957. Voting by brokers.

Subtitle F—Improvements to the Management of the Securities and Exchange Commission

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

Sec. 962. Triennial report on personnel management.

Sec. 963. Annual financial controls audit.

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

Sec. 965. Compliance examiners.

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

Sec. 967. Commission organizational study and reform.

Sec. 968. Study on SEC revolving door.

Subtitle G—Strengthening Corporate Governance

Sec. 971. Proxy access.

Sec. 972. Disclosures regarding chairman and CEO structures.

Subtitle H—Municipal Securities

Sec. 975. Regulation of municipal securities and changes to the board of the MSRB.

Sec. 976. Government Accountability Office study of increased disclosure to investors.

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

Sec. 978. Funding for Governmental Accounting Standards Board.

Sec. 979. Commission Office of Municipal Securities.

Subtitle I—Public Company Accounting Oversight Board, portfolio margining, and other matters

Sec. 981. Authority to share certain information with foreign authorities.

Sec. 982. Oversight of brokers and dealers.

Sec. 983. Portfolio margining.

Sec. 984. Loan or borrowing of securities.

Sec. 985. Technical corrections to Federal securities laws.

Sec. 986. Conforming amendments relating to repeal of the Public Utility Holding Company Act of 1935.

Sec. 987. Amendment to definition of material loss and nonmaterial losses to the Deposit Insurance Fund for purposes of Inspector General reviews.

Sec. 988. Amendment to definition of material loss and nonmaterial losses to the National Credit Union Share Insurance Fund for purposes of Inspector General reviews.

Sec. 989. Government Accountability Office study on proprietary trading.

Sec. 989A. Senior investor protections.

Sec. 989B. Designated Federal entity inspectors general independence.

Sec. 989C. Strengthening Inspector General accountability.

Sec. 989D. Removal of Inspectors General of designated Federal entities.

Sec. 989E. Additional oversight of financial regulatory system.

Sec. 989F. GAO study of person to person lending.

Sec. 989G. Exemption for nonaccelerated filers.

Sec. 989H. Corrective responses by heads of certain establishments to deficiencies identified by Inspectors General.

Sec. 989I. GAO study regarding exemption for smaller issuers.

Sec. 989J. Further promoting the adoption of the NAIC Model Regulations that enhance protection of seniors and other consumers.

Subtitle J—Securities and Exchange Commission Match Funding

Sec. 991. Securities and Exchange Commission match funding.

TITLE X—Bureau of Consumer Financial Protection

Sec. 1001. Short title.

Sec. 1002. Definitions.

Subtitle A—Bureau of Consumer Financial Protection

Sec. 1011. Establishment of the Bureau of Consumer Financial Protection.

Sec. 1012. Executive and administrative powers.

Sec. 1013. Administration.

Sec. 1014. Consumer Advisory Board.

Sec. 1015. Coordination.

Sec. 1016. Appearances before and reports to Congress.

Sec. 1017. Funding; penalties and fines.

Sec. 1018. Effective date.

Subtitle B—General Powers of the Bureau

Sec. 1021. Purpose, objectives, and functions.

Sec. 1022. Rulemaking authority.

Sec. 1023. Review of Bureau regulations.

Sec. 1024. Supervision of nondepository covered persons.

Sec. 1025. Supervision of very large banks, savings associations, and credit unions.

Sec. 1026. Other banks, savings associations, and credit unions.

Sec. 1027. Limitations on authorities of the Bureau; preservation of authorities.

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

Sec. 1029. Exclusion for auto dealers.

Sec. 1029A. Effective date.

Subtitle C—Specific Bureau Authorities

Sec. 1031. Prohibiting unfair, deceptive, or abusive acts or practices.

Sec. 1032. Disclosures.

Sec. 1033. Consumer rights to access information.

Sec. 1034. Response to consumer complaints and inquiries.

Sec. 1035. Private education loan ombudsman.

Sec. 1036. Prohibited acts.

Sec. 1037. Effective date.

Subtitle D—Preservation of State law

Sec. 1041. Relation to State law.

Sec. 1042. Preservation of enforcement powers of States.

Sec. 1043. Preservation of existing contracts.

Sec. 1044. State law preemption standards for national banks and subsidiaries clarified.

Sec. 1045. Clarification of law applicable to nondepository institution subsidiaries.

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

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

Sec. 1048. Effective date.

Subtitle E—Enforcement Powers

Sec. 1051. Definitions.

Sec. 1052. Investigations and administrative discovery.

Sec. 1053. Hearings and adjudication proceedings.

Sec. 1054. Litigation authority.

Sec. 1055. Relief available.

Sec. 1056. Referrals for criminal proceedings.

Sec. 1057. Employee protection.

Sec. 1058. Effective date.

Subtitle F—Transfer of Functions and Personnel; Transitional Provisions

Sec. 1061. Transfer of consumer financial protection functions.

Sec. 1062. Designated transfer date.

Sec. 1063. Savings provisions.

Sec. 1064. Transfer of certain personnel.

Sec. 1065. Incidental transfers.

Sec. 1066. Interim authority of the Secretary.

Sec. 1067. Transition oversight.

Subtitle G—Regulatory Improvements

Sec. 1071. Small business data collection.

Sec. 1072. Assistance for economically vulnerable individuals and families.

Sec. 1073. Remittance transfers.

Sec. 1074. Department of the Treasury study on ending the conservatorship of Fannie Mae, Freddie Mac, and reforming the housing finance system.

Sec. 1075. Reasonable fees and rules for payment card transactions.

Sec. 1076. Reverse mortgage study and regulations.

Sec. 1077. Report on private education loans and private educational lenders.

Sec. 1078. Study and report on credit scores.

Sec. 1079. Review, report, and program with respect to exchange facilitators.

Sec. 1079A. Financial fraud provisions.

Subtitle H—Conforming Amendments

Sec. 1081. Amendments to the Inspector General Act.

Sec. 1082. Amendments to the Privacy Act of 1974.

Sec. 1083. Amendments to the Alternative Mortgage Transaction Parity Act of 1982.

Sec. 1084. Amendments to the Electronic Fund Transfer Act.

Sec. 1085. Amendments to the Equal Credit Opportunity Act.

Sec. 1086. Amendments to the Expedited Funds Availability Act.

Sec. 1087. Amendments to the Fair Credit Billing Act.

Sec. 1088. Amendments to the Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act of 2003.

Sec. 1089. Amendments to the Fair Debt Collection Practices Act.

Sec. 1090. Amendments to the Federal Deposit Insurance Act.

Sec. 1091. Amendment to Federal Financial Institutions Examination Council Act of 1978.

Sec. 1092. Amendments to the Federal Trade Commission Act.

Sec. 1093. Amendments to the Gramm-Leach-Bliley Act.

Sec. 1094. Amendments to the Home Mortgage Disclosure Act of 1975.

Sec. 1095. Amendments to the Homeowners Protection Act of 1998.

Sec. 1096. Amendments to the Home Ownership and Equity Protection Act of 1994.

Sec. 1097. Amendments to the Omnibus Appropriations Act, 2009.

Sec. 1098. Amendments to the Real Estate Settlement Procedures Act of 1974.

Sec. 1098A. Amendments to the Interstate Land Sales Full Disclosure Act.

Sec. 1099. Amendments to the Right to Financial Privacy Act of 1978.

Sec. 1100. Amendments to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.

Sec. 1100A. Amendments to the Truth in Lending Act.

Sec. 1100B. Amendments to the Truth in Savings Act.

Sec. 1100C. Amendments to the Telemarketing and Consumer Fraud and Abuse Prevention Act.

Sec. 1100D. Amendments to the Paperwork Reduction Act.

Sec. 1100E. Adjustments for inflation in the Truth in Lending Act.

Sec. 1100F. Use of consumer reports.

Sec. 1100G. Small business fairness and regulatory transparency.

Sec. 1100H. Effective date.

TITLE XI—Federal Reserve System provisions

Sec. 1101. Federal Reserve Act amendments on emergency lending authority.

Sec. 1102. Reviews of special Federal reserve credit facilities.

Sec. 1103. Public access to information.

Sec. 1104. Liquidity event determination.

Sec. 1105. Emergency financial stabilization.

Sec. 1106. Additional related amendments.

Sec. 1107. Federal Reserve Act amendments on Federal reserve bank governance.

Sec. 1108. Federal Reserve Act amendments on supervision and regulation policy.

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

TITLE XII—Improving access to mainstream financial institutions

Sec. 1201. Short title.

Sec. 1202. Purpose.

Sec. 1203. Definitions.

Sec. 1204. Expanded access to mainstream financial institutions.

Sec. 1205. Low-cost alternatives to payday loans.

Sec. 1206. Grants to establish loan-loss reserve funds.

Sec. 1207. Procedural provisions.

Sec. 1208. Authorization of appropriations.

Sec. 1209. Regulations.

Sec. 1210. Evaluation and reports to Congress.

TITLE XIII—Pay It Back Act

Sec. 1301. Short title.

Sec. 1302. Amendment to reduce TARP authorization.

Sec. 1303. Report.

Sec. 1304. Amendments to Housing and Economic Recovery Act of 2008.

Sec. 1305. Federal Housing Finance Agency report.

Sec. 1306. Repayment of unobligated ARRA funds.

TITLE XIV—Mortgage Reform and Anti-Predatory Lending Act

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

Subtitle A—Residential Mortgage Loan Origination Standards

Sec. 1401. Definitions.

Sec. 1402. Residential mortgage loan origination.

Sec. 1403. Prohibition on steering incentives.

Sec. 1404. Liability.

Sec. 1405. Regulations.

Sec. 1406. Study of shared appreciation mortgages.

Subtitle B—Minimum Standards For Mortgages

Sec. 1411. Ability to repay.

Sec. 1412. Safe harbor and rebuttable presumption.

Sec. 1413. Defense to foreclosure.

Sec. 1414. Additional standards and requirements.

Sec. 1415. Rule of construction.

Sec. 1416. Amendments to civil liability provisions.

Sec. 1417. Lender rights in the context of borrower deception.

Sec. 1418. Six-month notice required before reset of hybrid adjustable rate mortgages.

Sec. 1419. Required disclosures.

Sec. 1420. Disclosures required in monthly statements for residential mortgage loans.

Sec. 1421. Report by the GAO.

Sec. 1422. State attorney general enforcement authority.

Subtitle C—High-Cost Mortgages

Sec. 1431. Definitions relating to high-cost mortgages.

Sec. 1432. Amendments to existing requirements for certain mortgages.

Sec. 1433. Additional requirements for certain mortgages.

Subtitle D—Office of Housing Counseling

Sec. 1441. Short title.

Sec. 1442. Establishment of Office of Housing Counseling.

Sec. 1443. Counseling procedures.

Sec. 1444. Grants for housing counseling assistance.

Sec. 1445. Requirements to use HUD-certified counselors under HUD programs.

Sec. 1446. Study of defaults and foreclosures.

Sec. 1447. Default and foreclosure database.

Sec. 1448. Definitions for counseling-related programs.

Sec. 1449. Accountability and transparency for grant recipients.

Sec. 1450. Updating and simplification of mortgage information booklet.

Sec. 1451. Home inspection counseling.

Sec. 1452. Warnings to homeowners of foreclosure rescue scams.

Subtitle E—Mortgage Servicing

Sec. 1461. Escrow and impound accounts relating to certain consumer credit transactions.

Sec. 1462. Disclosure notice required for consumers who waive escrow services.

Sec. 1463. Real Estate Settlement Procedures Act of 1974 amendments.

Sec. 1464. Truth in Lending Act amendments.

Sec. 1465. Escrows included in repayment analysis.

Subtitle F—Appraisal Activities

Sec. 1471. Property appraisal requirements.

Sec. 1472. Appraisal independence requirements.

Sec. 1473. Amendments relating to Appraisal Subcommittee of FFIEC, Appraiser Independence Monitoring, Approved Appraiser Education, Appraisal Management Companies, Appraiser Complaint Hotline, Automated Valuation Models, and Broker Price Opinions.

Sec. 1474. Equal Credit Opportunity Act amendment.

Sec. 1475. Real Estate Settlement Procedures Act of 1974 amendment relating to certain appraisal fees.

Sec. 1476. GAO study on the effectiveness and impact of various appraisal methods, valuation models and distributions channels, and on the Home Valuation Code of conduct and the Appraisal Subcommittee.

Subtitle G—Mortgage resolution and modification

Sec. 1481. Multifamily mortgage resolution program.

Sec. 1482. Home Affordable Modification Program guidelines.

Sec. 1483. Public availability of information of Making Home Affordable Program.

Sec. 1484. Protecting tenants at foreclosure extension and clarification.

Subtitle H—Miscellaneous provisions

Sec. 1491. Sense of Congress regarding the importance of government-sponsored enterprises reform to enhance the protection, limitation, and regulation of the terms of residential mortgage credit.

Sec. 1492. GAO study report on government efforts to combat mortgage foreclosure rescue scams and loan modification fraud.

Sec. 1493. Reporting of mortgage data by State.

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

Sec. 1495. Definition.

Sec. 1496. Emergency mortgage relief.

Sec. 1497. Additional assistance for Neighborhood Stabilization Program.

Sec. 1498. Legal assistance for foreclosure-related issues.

TITLE XV—Miscellaneous Provisions

Sec. 1501. Restrictions on use of United States funds for foreign governments; protection of American taxpayers.

Sec. 1502. Conflict minerals.

Sec. 1503. Reporting requirements regarding coal or other mine safety.

Sec. 1504. Disclosure of payments by resource extraction issuers.

Sec. 1505. Study by the Comptroller General.

Sec. 1506. Study on core deposits and brokered deposits.

TITLE XVI—Section 1256 contracts

Sec. 1601. Certain swaps, etc., not treated as section 1256 contracts.

2.

Definitions

As used in this Act, the following definitions shall apply, except as the context otherwise requires or as otherwise specifically provided in this Act:

(1)

Affiliate

The term affiliate has the same meaning as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).

(2)

Appropriate Federal banking agency

On and after the transfer date, 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)), as amended by title III.

(3)

Board of governors

The term Board of Governors means the Board of Governors of the Federal Reserve System.

(4)

Bureau

The term Bureau means the Bureau of Consumer Financial Protection established under title X.

(5)

Commission

The term Commission means the Securities and Exchange Commission, except in the context of the Commodity Futures Trading Commission.

(6)

Commodity futures terms

The terms futures commission merchant, swap, swap dealer, swap execution facility, derivatives clearing organization, board of trade, commodity trading advisor, commodity pool, and commodity pool operator have the same meanings as given the terms in section 1a of the Commodity Exchange Act (7 U.S.C. 1 et seq.).

(7)

Corporation

The term Corporation means the Federal Deposit Insurance Corporation.

(8)

Council

The term Council means the Financial Stability Oversight Council established under title I.

(9)

Credit union

The term credit union means a Federal credit union, State credit union, or State-chartered credit union, as those terms are defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752).

(10)

Federal banking agency

The term—

(A)

Federal banking agency means, individually, the Board of Governors, the Office of the Comptroller of the Currency, and the Corporation; and

(B)

Federal banking agencies means all of the agencies referred to in subparagraph (A), collectively.

(11)

Functionally regulated subsidiary

The term functionally regulated subsidiary has the same meaning as in section 5(c)(5) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(5)).

(12)

Primary financial regulatory agency

The term primary financial regulatory agency means—

(A)

the appropriate Federal banking agency, with respect to institutions described in section 3(q) of the Federal Deposit Insurance Act, except to the extent that an institution is or the activities of an institution are otherwise described in subparagraph (B), (C), (D), or (E);

(B)

the Securities and Exchange Commission, with respect to—

(i)

any broker or dealer that is registered with the Commission under the Securities Exchange Act of 1934, with respect to the activities of the broker or dealer that require the broker or dealer to be registered under that Act;

(ii)

any investment company that is registered with the Commission under the Investment Company Act of 1940, with respect to the activities of the investment company that require the investment company to be registered under that Act;

(iii)

any investment adviser that is registered with the Commission under the Investment Advisers Act of 1940, with respect to the investment advisory activities of such company and activities that are incidental to such advisory activities;

(iv)

any clearing agency registered with the Commission under the Securities Exchange Act of 1934, with respect to the activities of the clearing agency that require the agency to be registered under such Act;

(v)

any nationally recognized statistical rating organization registered with the Commission under the Securities Exchange Act of 1934;

(vi)

any transfer agent registered with the Commission under the Securities Exchange Act of 1934;

(vii)

any exchange registered as a national securities exchange with the Commission under the Securities Exchange Act of 1934;

(viii)

any national securities association registered with the Commission under the Securities Exchange Act of 1934;

(ix)

any securities information processor registered with the Commission under the Securities Exchange Act of 1934;

(x)

the Municipal Securities Rulemaking Board established under the Securities Exchange Act of 1934;

(xi)

the Public Company Accounting Oversight Board established under the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7211 et seq.);

(xii)

the Securities Investor Protection Corporation established under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.); and

(xiii)

any security-based swap execution facility, security-based swap data repository, security-based swap dealer or major security-based swap participant registered with the Commission under the Securities Exchange Act of 1934, with respect to the security-based swap activities of the person that require such person to be registered under such Act;

(C)

the Commodity Futures Trading Commission, with respect to—

(i)

any futures commission merchant registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.), with respect to the activities of the futures commission merchant that require the futures commission merchant to be registered under that Act;

(ii)

any commodity pool operator registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.), with respect to the activities of the commodity pool operator that require the commodity pool operator to be registered under that Act, or a commodity pool, as defined in that Act;

(iii)

any commodity trading advisor or introducing broker registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.), with respect to the activities of the commodity trading advisor or introducing broker that require the commodity trading adviser or introducing broker to be registered under that Act;

(iv)

any derivatives clearing organization registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.), with respect to the activities of the derivatives clearing organization that require the derivatives clearing organization to be registered under that Act;

(v)

any board of trade designated as a contract market by the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.);

(vi)

any futures association registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.);

(vii)

any retail foreign exchange dealer registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.), with respect to the activities of the retail foreign exchange dealer that require the retail foreign exchange dealer to be registered under that Act;

(viii)

any swap execution facility, swap data repository, swap dealer, or major swap participant registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.) with respect to the swap activities of the person that require such person to be registered under that Act; and

(ix)

any registered entity under the Commodity Exchange Act (7 U.S.C. 1 et seq.), with respect to the activities of the registered entity that require the registered entity to be registered under that Act;

(D)

the State insurance authority of the State in which an insurance company is domiciled, with respect to the insurance activities and activities that are incidental to such insurance activities of an insurance company that is subject to supervision by the State insurance authority under State insurance law; and

(E)

the Federal Housing Finance Agency, with respect to Federal Home Loan Banks or the Federal Home Loan Bank System, and with respect to the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.

(13)

Prudential standards

The term prudential standards means enhanced supervision and regulatory standards developed by the Board of Governors under section 165.

(14)

Secretary

The term Secretary means the Secretary of the Treasury.

(15)

Securities terms

The—

(A)

terms broker, dealer, issuer, nationally recognized statistical rating organization, security, and securities laws have the same meanings as in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c);

(B)

term investment adviser has the same meaning as in section 202 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2); and

(C)

term investment company has the same meaning as in section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a–3).

(16)

State

The term State means any State, commonwealth, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, or the United States Virgin Islands.

(17)

Transfer date

The term transfer date means the date established under section 311.

(18)

Other incorporated definitions

(A)

Federal Deposit insurance act

The terms bank, bank holding company, control, deposit, depository institution, Federal depository institution, Federal savings association, foreign bank, including, insured branch, insured depository institution, national member bank, national nonmember bank, savings association, State bank, State depository institution, State member bank, State nonmember bank, State savings association, and subsidiary have the same meanings as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).

(B)

Holding Companies

The term—

(i)

bank holding company has the same meaning as in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841);

(ii)

financial holding company has the same meaning as in section 2(p) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(p)); and

(iii)

savings and loan holding company has the same meaning as in section 10 of the Home Owners' Loan Act (12 U.S.C. 1467a(a)).

3.

Severability

If any provision of this Act, an amendment made by this Act, or the application of such provision or amendment to any person or circumstance is held to be unconstitutional, the remainder of this Act, the amendments made by this Act, and the application of the provisions of such to any person or circumstance shall not be affected thereby.

4.

Effective date

Except as otherwise specifically provided in this Act or the amendments made by this Act, this Act and such amendments shall take effect 1 day after the date of enactment of this Act.

5.

Budgetary effects

The budgetary effects of this Act, 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, jointly submitted for printing in the Congressional Record by the Chairmen of the House and Senate Budget Committees, provided that such statement has been submitted prior to the vote on passage in the House acting first on this conference report or amendment between the Houses.

6.

Antitrust savings clause

Nothing in this Act, or any amendment made by this Act, shall be construed to modify, impair, or supersede the operation of any of the antitrust laws, unless otherwise specified. For purposes of this section, the term antitrust laws has the same meaning as 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.

I

Financial Stability

101.

Short title

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

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) that is—

(i)

incorporated or organized in a country other than the United States; and

(ii)

predominantly engaged in, including through a branch in the United States, financial activities, as defined in paragraph (6).

(B)

U.S. nonbank financial company

The term U.S. nonbank financial company means a company (other than a bank holding company, 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.), or a national securities exchange (or parent thereof), clearing agency (or parent thereof, unless the parent is a bank holding company), security-based swap execution facility, or security-based swap data repository registered with the Commission, or a board of trade designated as a contract market (or parent thereof), or a derivatives clearing organization (or parent thereof, unless the parent is a bank holding company), swap execution facility or a swap data repository registered with the Commodity Futures Trading Commission), that is—

(i)

incorporated or organized under the laws of the United States or any State; and

(ii)

predominantly engaged in financial activities, as defined in paragraph (6).

(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)

Predominantly engaged

A company is predominantly engaged in financial activities if—

(A)

the annual gross revenues derived by the company and all of its subsidiaries from activities that are financial in nature (as defined in section 4(k) of the Bank Holding Company Act of 1956) and, if applicable, from the ownership or control of one or more insured depository institutions, represents 85 percent or more of the consolidated annual gross revenues of the company; or

(B)

the consolidated assets of the company and all of its subsidiaries related to activities that are financial in nature (as defined in section 4(k) of the Bank Holding Company Act of 1956) and, if applicable, related to the ownership or control of one or more insured depository institutions, represents 85 percent or more of the consolidated assets of the company.

(7)

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, but in no instance shall the term significant nonbank financial company include those entities that are excluded under paragraph (4)(B).

(b)

Definitional criteria

The Board of Governors shall establish, by regulation, the requirements for determining if a company is predominantly engaged in financial activities, as defined in subsection (a)(6).

(c)

Foreign nonbank financial companies

For purposes of the application of subtitles A and C (other than section 113(b)) with respect to a foreign nonbank financial company, references in this title to company or subsidiary include only the United States activities and subsidiaries of such foreign company, except as otherwise provided.

A

Financial Stability Oversight Council

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—

(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;

(I)

the Chairman of the National Credit Union Administration Board; and

(J)

an independent member appointed by the President, by and with the advice and consent of the Senate, having insurance expertise.

(2)

Nonvoting members

The nonvoting members, who shall serve in an advisory capacity as a nonvoting member of the Council, shall be—

(A)

the Director of the Office of Financial Research;

(B)

the Director of the Federal Insurance Office;

(C)

a State insurance commissioner, to be designated by a selection process determined by the State insurance commissioners;

(D)

a State banking supervisor, to be designated by a selection process determined by the State banking supervisors; and

(E)

a State securities commissioner (or an officer performing like functions), to be designated by a selection process determined by such State securities commissioners.

(3)

Nonvoting member participation

The nonvoting members of the Council shall not be excluded from any of the proceedings, meetings, discussions, or deliberations of the Council, except that the Chairperson may, upon an affirmative vote of the member agencies, exclude the nonvoting members from any of the proceedings, meetings, discussions, or deliberations of the Council when necessary to safeguard and promote the free exchange of confidential supervisory information.

(c)

Terms; vacancy

(1)

Terms

The independent member of the Council shall serve for a term of 6 years, and each nonvoting member described in subparagraphs (C), (D), and (E) of subsection (b)(2) shall serve for a term of 2 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 voting 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.

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, or ongoing activities, of large, interconnected bank holding companies or nonbank financial companies, or that could arise outside the financial services marketplace;

(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 system.

(2)

Duties

The Council shall, in accordance with this title—

(A)

collect information from member agencies, other Federal and State financial regulatory agencies, the Federal Insurance Office 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)

to monitor domestic and international financial regulatory proposals and developments, including insurance and accounting issues, and to advise Congress and make recommendations in such areas that will enhance the integrity, efficiency, competitiveness, and stability of the U.S. financial markets;

(E)

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;

(F)

recommend to the member agencies general supervisory priorities and principles reflecting the outcome of discussions among the member agencies;

(G)

identify gaps in regulation that could pose risks to the financial stability of the United States;

(H)

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, or because of their activities pursuant to section 113;

(I)

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;

(J)

identify systemically important financial market utilities and payment, clearing, and settlement activities (as that term is defined in title VIII);

(K)

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;

(L)

review and, as appropriate, may submit comments to the Commission and any standard-setting body with respect to an existing or proposed accounting principle, standard, or procedure;

(M)

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

(N)

annually report to and testify before Congress on—

(i)

the activities of the Council;

(ii)

significant financial market and regulatory developments, including insurance and accounting regulations and standards, along with an assessment of those developments on the stability of the financial system;

(iii)

potential emerging threats to the financial stability of the United States;

(iv)

all determinations made under section 113 or title VIII, and the basis for such determinations;

(v)

all recommendations made under section 119 and the result of such recommendations; and

(vi)

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)

Statements by voting members of the council

At the time at which each report is submitted under subsection (a), each voting member of the Council shall—

(1)

if such member believes that the Council, the Government, and the private sector are taking all reasonable steps to ensure financial stability and to mitigate systemic risk that would negatively affect the economy, submit a signed statement to Congress stating such belief; or

(2)

if such member does not believe that all reasonable steps described under paragraph (1) are being taken, submit a signed statement to Congress stating what actions such member believes need to be taken in order to ensure that all reasonable steps described under paragraph (1) are taken.

(c)

Testimony by the chairperson

The Chairperson shall appear before the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate at an annual hearing, after the report is submitted under subsection (a)—

(1)

to discuss the efforts, activities, objectives, and plans of the Council; and

(2)

to discuss and answer questions concerning such report.

(d)

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, member agencies, and the Federal Insurance Office, 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, any member agency, and the Federal Insurance Office, 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 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 the 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.

(C)

Mitigation in case of foreign financial companies

Before requiring the submission of reports from a company that is a foreign nonbank financial company or foreign-based bank holding company, the Council shall, acting through the Office of Financial Research, to the extent appropriate, consult with the appropriate foreign regulator of such company and, whenever possible, rely on information already being collected by such foreign regulator, with English translation.

(4)

Back-up examination by the Board of Governors

If the Council is unable to determine whether the financial activities of a U.S. nonbank financial company pose a threat to the financial stability of the United States, based on information or reports obtained under paragraphs (1) and (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 U.S. 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.

(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 title.

(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.

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 voting 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, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the U.S. nonbank financial company, could pose a threat to the financial stability of the United States.

(2)

Considerations

In making a determination under paragraph (1), the Council shall consider—

(A)

the extent of the leverage of the company;

(B)

the extent and nature of the off-balance-sheet exposures of the company;

(C)

the extent and nature of the transactions and relationships of the company with other significant nonbank financial companies and significant bank holding companies;

(D)

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;

(E)

the importance of the company as a source of credit for low-income, minority, or underserved communities, and the impact that the failure of such company would have on the availability of credit in such communities;

(F)

the extent to which assets are managed rather than owned by the company, and the extent to which ownership of assets under management is diffuse;

(G)

the nature, scope, size, scale, concentration, interconnectedness, and mix of the activities of the company;

(H)

the degree to which the company is already regulated by 1 or more primary financial regulatory agencies;

(I)

the amount and nature of the financial assets of the company;

(J)

the amount and types of the liabilities of the company, including the degree of reliance on short-term funding; and

(K)

any other risk-related 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 voting members then serving, including an affirmative vote by the Chairperson, may determine that a foreign 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 foreign nonbank financial company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the foreign nonbank financial company, could pose a threat to the financial stability of the United States.

(2)

Considerations

In making a determination under paragraph (1), the Council shall consider—

(A)

the extent of the leverage of the company;

(B)

the extent and nature of the United States related off-balance-sheet exposures of the company;

(C)

the extent and nature of the transactions and relationships of the company with other significant nonbank financial companies and significant bank holding companies;

(D)

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;

(E)

the importance of the company as a source of credit for low-income, minority, or underserved communities in the United States, and the impact that the failure of such company would have on the availability of credit in such communities;

(F)

the extent to which assets are managed rather than owned by the company and the extent to which ownership of assets under management is diffuse;

(G)

the nature, scope, size, scale, concentration, interconnectedness, and mix of the activities of the company;

(H)

the extent to which the company is subject to prudential standards on a consolidated basis in its home country that are administered and enforced by a comparable foreign supervisory authority;

(I)

the amount and nature of the United States financial assets of the company;

(J)

the amount and nature 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; and

(K)

any other risk-related factors that the Council deems appropriate.

(c)

Antievasion

(1)

Determinations

In order to avoid evasion of this title, the Council, on its own initiative or at the request of the Board of Governors, may determine, on a nondelegable basis and by a vote of not fewer than 2/3 of the voting members then serving, including an affirmative vote by the Chairperson, that—

(A)

material financial distress related to, or the nature, scope, size, scale, concentration, interconnectedness, or mix of, the financial activities conducted directly or indirectly by a company incorporated or organized under the laws of the United States or any State or the financial activities in the United States of a company incorporated or organized in a country other than the United States would pose a threat to the financial stability of the United States, based on consideration of the factors in subsection (a)(2) or (b)(2), as applicable;

(B)

the company is organized or operates in such a manner as to evade the application of this title; and

(C)

such financial activities of the company shall be supervised by the Board of Governors and subject to prudential standards in accordance with this title, consistent with paragraph (3).

(2)

Report

Upon making a determination under paragraph (1), the Council shall submit a report to the appropriate committees of Congress detailing the reasons for making such determination.

(3)

Consolidated supervision of only financial activities; establishment of an intermediate holding company

(A)

Establishment of an Intermediate holding company

Upon a determination under paragraph (1), the company that is the subject of the determination may establish an intermediate holding company in which the financial activities of such company and its subsidiaries shall be conducted (other than the activities described in section 167(b)(2)) in compliance with any regulations or guidance provided by the Board of Governors. Such intermediate holding company shall be subject to the supervision of the Board of Governors and to prudential standards under this title as if the intermediate holding company were a nonbank financial company supervised by the Board of Governors.

(B)

Action of the Board of Governors

To facilitate the supervision of the financial activities subject to the determination in paragraph (1), the Board of Governors may require a company to establish an intermediate holding company, as provided for in section 167, which would be subject to the supervision of the Board of Governors and to prudential standards under this title, as if the intermediate holding company were a nonbank financial company supervised by the Board of Governors.

(4)

Notice and opportunity for hearing and final determination; judicial review

Subsections (d) through (h) shall apply to determinations made by the Council pursuant to paragraph (1) in the same manner as such subsections apply to nonbank financial companies.

(5)

Covered financial activities

For purposes of this subsection, the term financial activities

(A)

means activities that are financial in nature (as defined in section 4(k) of the Bank Holding Company Act of 1956);

(B)

includes the ownership or control of one or more insured depository institutions; and

(C)

does not include internal financial activities conducted for the company or any affiliate thereof, including internal treasury, investment, and employee benefit functions.

(6)

Only financial activities subject to prudential supervision

Nonfinancial activities of the company shall not be subject to supervision by the Board of Governors and prudential standards of the Board. For purposes of this Act, the financial activities that are the subject of the determination in paragraph (1) shall be subject to the same requirements as a nonbank financial company supervised by the Board of Governors. Nothing in this paragraph shall prohibit or limit the authority of the Board of Governors to apply prudential standards under this title to the financial activities that are subject to the determination in paragraph (1).

(d)

Reevaluation and rescission

The Council shall—

(1)

not less frequently than annually, reevaluate each determination made under subsections (a) and (b) with respect to such 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 voting 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.

(e)

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 a 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).

(f)

Emergency exception

(1)

In general

The Council may waive or modify the requirements of subsection (e) with respect to a nonbank financial company, if the Council determines, by a vote of not fewer than 2/3 of the voting 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 subsection to the nonbank financial company concerned as soon as practicable, but not later than 24 hours after the waiver or modification is granted.

(3)

International coordination

In making a determination under paragraph (1), the Council shall consult with the appropriate home country supervisor, if any, of the foreign nonbank financial company that is being considered for such a determination.

(4)

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 subsection, 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).

(5)

Notice of final determination

Not later than 30 days after the date of any hearing under paragraph (4), the Council shall notify the subject nonbank financial company of the final determination of the Council under this subsection, which shall contain a statement of the basis for the decision of the Council.

(g)

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).

(h)

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)(2), (e)(3), or (f)(5), 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.

(i)

International coordination

In exercising its duties under this title with respect to foreign nonbank financial companies, foreign-based bank holding companies, and cross-border activities and markets, the Council shall consult with appropriate foreign regulatory authorities, to the extent appropriate.

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.

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, failure, or ongoing activities 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)

Recommended application of required standards

In making recommendations under this section, the Council may—

(A)

differentiate among companies that are subject to heightened standards on an individual basis or by category, taking into consideration their capital structure, riskiness, complexity, financial activities (including the financial activities of their subsidiaries), size, and any other risk-related factors that the Council deems appropriate; or

(B)

recommend an asset threshold that is higher than $50,000,000,000 for the application of any standard described in subsections (c) through (g).

(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;

(H)

short-term debt limits; and

(I)

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—

(A)

give due regard to the principle of national treatment and equality of competitive opportunity; and

(B)

take into account the extent to which the foreign nonbank financial company or foreign-based bank holding company is subject on a consolidated basis to home country standards that are comparable to those applied to financial companies in the United States.

(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;

(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 section 165; and

(C)

adapt its recommendations as appropriate in light of any predominant line of business of such company, including assets under management or other activities for which particular standards may not be appropriate.

(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 contingent capital 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 contingent capital 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.

(g)

Short-term debt limits

The Council may make recommendations to the Board of Governors to require short-term debt limits to mitigate the risks that an over-accumulation of such debt could pose to bank holding companies described in subsection (a), nonbank financial companies supervised by the Board of Governors, or the financial system.

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 or to a relevant foreign supervisory authority;

(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.

117.

Treatment of certain companies that cease to be bank holding companies

(a)

Applicability

This section shall apply to—

(1)

any entity that—

(A)

was a bank holding company having total consolidated assets equal to or greater than $50,000,000,000 as of January 1, 2010; and

(B)

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; and

(2)

any successor entity (as defined by the Board of Governors, in consultation with the Council) to an entity described in paragraph (1).

(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

A Council decision to grant an appeal under this subsection shall be made by a vote of not fewer than 2/3 of the voting members then serving, including an affirmative vote by the Chairperson. 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, not later than 1 year after the date of submission of the report under subparagraph (A), 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.

118.

Council funding

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

119.

Resolution of supervisory jurisdictional disputes among member agencies

(a)

Request for council recommendation

The Council shall seek to 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 title X);

(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 seek to resolve the dispute.

(b)

Council recommendation

The Council shall seek to 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 of recommendation

Any Council recommendation under this section shall—

(1)

be in writing;

(2)

include an explanation of the reasons therefor; and

(3)

be approved by the affirmative vote of 2/3 of the voting members of the Council then serving.

(d)

Nonbinding effect

Any recommendation made by the Council under subsection (c) shall not be binding on the Federal agencies that are parties to the dispute.

120.

Additional standards applicable to activities or practices for financial stability purposes

(a)

In general

The Council may provide for more stringent regulation of a financial activity by issuing 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, scope, nature, size, scale, concentration, or interconnectedness 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, financial markets of the United States, or low-income, minority, or underserved communities.

(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 such standards 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.

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 voting members of the Council then serving, shall—

(1)

limit the ability of the company to merge with, acquire, consolidate with, or otherwise become affiliated with another company;

(2)

restrict the ability of the company to offer a financial product or products;

(3)

require the company to terminate one or more activities;

(4)

impose conditions on the manner in which the company conducts 1 or more activities; or

(5)

if the Board of Governors determines that the actions described in paragraphs (1) through (4) are inadequate to mitigate a threat to the financial stability of the United States in its recommendation, require the company 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 making any determination under subsection (a).

(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—

(1)

giving due regard to the principle of national treatment and equality of competitive opportunity; and

(2)

taking into account the extent to which the foreign nonbank financial company or foreign-based bank holding company is subject on a consolidated basis to home country standards that are comparable to those applied to financial companies in the United States.

122.

GAO Audit of Council

(a)

Authority To audit

The Comptroller General of the United States may audit the activities of—

(1)

the Council; and

(2)

any person or entity acting on behalf of or under the authority of the Council, to the extent that such activities relate to work for the Council by such person or entity.

(b)

Access to information

(1)

In general

Notwithstanding any other provision of law, the Comptroller General shall, upon request and at such reasonable time and in such reasonable form as the Comptroller General may request, have access to—

(A)

any records or other information under the control of or used by the Council;

(B)

any records or other information under the control of a person or entity acting on behalf of or under the authority of the Council, to the extent that such records or other information is relevant to an audit under subsection (a); and

(C)

the officers, directors, employees, financial advisors, staff, working groups, and agents and representatives of the Council (as related to the activities on behalf of the Council of such agent or representative), at such reasonable times as the Comptroller General may request.

(2)

Copies

The Comptroller General may make and retain copies of such books, accounts, and other records, access to which is granted under this section, as the Comptroller General considers appropriate.

123.

Study of the effects of size and complexity of financial institutions on capital market efficiency and economic growth

(a)

Study required

(1)

In general

The Chairperson of the Council shall carry out a study of the economic impact of possible financial services regulatory limitations intended to reduce systemic risk. Such study shall estimate the benefits and costs on the efficiency of capital markets, on the financial sector, and on national economic growth, of—

(A)

explicit or implicit limits on the maximum size of banks, bank holding companies, and other large financial institutions;

(B)

limits on the organizational complexity and diversification of large financial institutions;

(C)

requirements for operational separation between business units of large financial institutions in order to expedite resolution in case of failure;

(D)

limits on risk transfer between business units of large financial institutions;

(E)

requirements to carry contingent capital or similar mechanisms;

(F)

limits on commingling of commercial and financial activities by large financial institutions;

(G)

segregation requirements between traditional financial activities and trading or other high-risk operations in large financial institutions; and

(H)

other limitations on the activities or structure of large financial institutions that may be useful to limit systemic risk.

(2)

Recommendations

The study required by this section shall include recommendations for the optimal structure of any limits considered in subparagraphs (A) through (E), in order to maximize their effectiveness and minimize their economic impact.

(b)

Report

Not later than the end of the 180-day period beginning on the date of enactment of this title, and not later than every 5 years thereafter, the Chairperson shall issue a report to the Congress containing any findings and determinations made in carrying out the study required under subsection (a).

B

Office of Financial Research

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 Data Center means the data center established under section 154;

(4)

the term Research and Analysis Center means the research and analysis center established under section 154;

(5)

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;

(6)

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;

(7)

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

(8)

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).

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, in consultation with the Chairperson, shall establish the annual budget of the Office.

(d)

Office Personnel

(1)

In general

The Director, in consultation with 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, without regard to chapter 51 or subchapter III of chapter 53 of title 5, United States Code, relating to classification of positions and General Schedule pay rates.

(3)

Comparability

Section 1206(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b(a)) is amended—

(A)

by striking Finance Board, and inserting Finance Board, the Office of Financial Research, and the Bureau of Consumer Financial Protection; and

(B)

by striking and the Office of Thrift Supervision,.

(4)

Senior executives

Section 3132(a)(1)(D) of title 5, United States Code, is amended by striking and the National Credit Union Administration; and inserting the National Credit Union Administration, the Bureau of Consumer Financial Protection, and the Office of Financial Research;.

(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)

Procurement of temporary and intermittent services

The Director may procure temporary and intermittent services under section 3109(b) of title 5, United States Code, at rates for individuals which do not exceed the daily equivalent of the annual rate of basic pay prescribed for Level V of the Executive Schedule under section 5316 of such title.

(g)

Post-employment prohibitions

The Secretary, with the concurrence of the Director of the Office of Government Ethics, shall issue regulations prohibiting the Director and any employee of the Office who has had access to the transaction or position data maintained by the Data Center or other business confidential information about financial entities required to report to the Office from being employed by or providing advice or consulting services to a financial company, for a period of 1 year after last having had access in the course of official duties to such transaction or position data or business confidential information, regardless of whether that entity is required to report to the Office. For employees whose access to business confidential information was limited, the regulations 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.

(h)

Technical and professional advisory committees

The Office, in consultation with the Chairperson, may appoint such special advisory, technical, or professional committees as may be useful in carrying out the functions of the Office, and the members of such committees may be staff of the Office, or other persons, or both.

(i)

Fellowship Program

The Office, in consultation with the Chairperson, may establish and maintain an academic and professional fellowship program, under which qualified academics and professionals shall be invited to spend not longer than 2 years at the Office, to perform research and to provide advanced training for Office personnel.

(j)

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..

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—

(1)

share data and information, including software developed by the Office, with the Council, member agencies, and the Bureau of Economic Analysis, which shared data, information, and software—

(A)

shall be maintained with at least the same level of security as is used by the Office; and

(B)

may not be shared with any individual or entity without the permission of the Council;

(2)

sponsor and conduct research projects; and

(3)

assist, on a reimbursable basis, with financial analyses undertaken at the request of other Federal agencies that are not member agencies.

(c)

Rulemaking authority

(1)

Scope

The Office, in consultation with the Chairperson, shall issue rules, regulations, and orders only to the extent necessary 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 implement regulations promulgated by the Office under paragraph (1) to standardize the types and formats of data reported and collected on behalf of the Council, as described in subsection (a)(2). If a member agency fails to implement such regulations prior to the expiration of the 3-year period following the date of publication of final regulations, the Office, in consultation with the Chairperson, may implement such regulations with respect to the financial entities under the jurisdiction of the member agency. This paragraph shall not supersede or interfere with the independent authority of a member agency under other law to collect data, in such format and manner as the member agency requires.

(d)

Testimony

(1)

In general

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.

(2)

No prior review

No officer or agency of the United States shall have any authority to require the Director to submit the testimony required under paragraph (1) or other congressional testimony to any officer or agency of the United States for approval, comment, or review prior to the submission of such testimony. Any such testimony to Congress shall include a statement that the views expressed therein are those of the Director and do not necessarily represent the views of the President.

(e)

Additional reports

The Director may provide additional reports to Congress concerning the financial stability of the United States. The Director shall notify the Council of any such additional reports provided to Congress.

(f)

Subpoena

(1)

In general

The Director may require from a financial company, by subpoena, the production of the data requested under subsection (a)(1) and section 154(b)(1), but only upon a written finding by the Director that—

(A)

such data is required to carry out the functions described under this subtitle; and

(B)

the Office has coordinated with the relevant primary financial regulatory agency, as required under section 154(b)(1)(B)(ii).

(2)

Format

Subpoenas under paragraph (1) shall bear the signature of the Director, and shall be served by any person or class of persons designated by the Director for that purpose.

(3)

Enforcement

In the case of contumacy or failure to obey a subpoena, the subpoena shall be enforceable by order of any appropriate district court of the United States. Any failure to obey the order of the court may be punished by the court as a contempt of court.

154.

Organizational structure; responsibilities of primary programmatic units

(a)

In general

There are established within the Office, to carry out the programmatic responsibilities of the Office—

(1)

the Data Center; and

(2)

the Research and Analysis Center.

(b)

Data Center

(1)

General duties

(A)

Data collection

The Data Center, on behalf of the Council, shall collect, validate, and maintain all data necessary to carry out the duties of the Data Center, as described in this subtitle. The data assembled shall be obtained from member agencies, commercial data providers, publicly available data sources, and financial entities under subparagraph (B).

(B)

Authority

(i)

In general

The Office may, as determined by the Council or by the Director in consultation with the Council, require the submission of periodic and other reports from any financial company 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 threat to the financial stability of the United States.

(ii)

Mitigation of report burden

Before requiring the submission of a report from any financial company that is regulated by a member agency, any primary financial regulatory agency, a foreign supervisory authority, or the Office shall coordinate with such agencies or authority, and shall, whenever possible, rely on information available from such agencies or authority.

(iii)

Collection of financial transaction and position data

The Office shall collect, on a schedule determined by the Director, in consultation with the Council, financial transaction data and position data from financial companies.

(C)

Rulemaking

The Office shall promulgate regulations pursuant to subsections (a)(1), (a)(2), (a)(7), and (c)(1) of section 153 regarding the type and scope of the data to be collected by the Data Center under this paragraph.

(2)

Responsibilities

(A)

Publication

The Data Center shall prepare and publish, in a manner that is easily accessible to the public—

(i)

a financial company reference database;

(ii)

a financial instrument reference database; and

(iii)

formats and standards for Office data, including standards for reporting financial transaction and position data to the Office.

(B)

Confidentiality

The Data Center shall not publish any confidential data under subparagraph (A).

(3)

Information security

The Director shall ensure that data collected and maintained by the Data Center are kept secure and protected against unauthorized disclosure.

(4)

Catalog of financial entities and instruments

The Data Center shall maintain a catalog of the financial entities and instruments reported to the Office.

(5)

Availability to the council and member agencies

The Data Center shall make data collected and maintained by the Data Center available to the Council and member agencies, as necessary to support their regulatory responsibilities.

(6)

Other authority

The Office shall, after consultation with the member agencies, provide certain data to financial industry participants and to the general public to increase market transparency and facilitate research on the financial system, to the extent that intellectual property rights are not violated, business confidential information is properly protected, and the sharing of such information poses no significant threats to the financial system of the United States.

(c)

Research and analysis center

(1)

General duties

The Research and Analysis Center, on behalf of the Council, shall develop and maintain independent analytical capabilities and computing resources—

(A)

to develop and maintain metrics and reporting systems for risks to the financial stability of the United States;

(B)

to monitor, investigate, and report on changes in systemwide risk levels and patterns to the Council and Congress;

(C)

to conduct, coordinate, and sponsor research to support and improve regulation of financial entities and markets;

(D)

to evaluate and report on stress tests or other stability-related evaluations of financial entities overseen by the member agencies;

(E)

to maintain expertise in such areas as may be necessary to support specific requests for advice and assistance from financial regulators;

(F)

to investigate disruptions and failures in the financial markets, report findings, and make recommendations to the Council based on those findings;

(G)

to conduct studies and provide advice on the impact of policies related to systemic risk; and

(H)

to promote best practices for financial risk management.

(d)

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.

155.

Funding

(a)

Financial research fund

(1)

Fund established

There is established in the Treasury of the United States a separate fund to be known as the Financial Research Fund.

(2)

Fund receipts

All amounts provided to the Office under subsection (c), and all assessments that the Office receives under subsection (d) shall be deposited into the Financial Research Fund.

(3)

Investments authorized

(A)

Amounts in fund may be invested

The Director may request the Secretary to invest the portion of the Financial Research Fund that is not, in the judgment of the Director, required to meet the needs of the Office.

(B)

Eligible investments

Investments shall be made by the Secretary 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 Financial Research Fund, as determined by the Director.

(4)

Interest and proceeds credited

The interest on, and the proceeds from the sale or redemption of, any obligations held in the Financial Research Fund shall be credited to and form a part of the Financial Research Fund.

(b)

Use of funds

(1)

In general

Funds obtained by, transferred to, or credited to the Financial Research Fund shall be immediately available to the Office, and shall remain available until expended, to pay the expenses of the Office in carrying out the duties and responsibilities of the Office.

(2)

Fees, assessments, and other funds not government funds

Funds obtained by, transferred to, or credited to the Financial Research Fund shall not be construed to be Government funds or appropriated moneys.

(3)

Amounts not subject to apportionment

Notwithstanding any other provision of law, amounts in the Financial Research Fund shall not be subject to apportionment for purposes of chapter 15 of title 31, United States Code, or under any other authority, or for any other purpose.

(c)

Interim funding

During the 2-year period following the date of enactment of this Act, the Board of Governors shall provide to the Office an amount sufficient to cover the expenses of the Office.

(d)

Permanent self-funding

Beginning 2 years after the date of enactment of this Act, the Secretary shall establish, by regulation, and with the approval of the Council, an assessment schedule, including the assessment base and rates, applicable to bank holding companies with total consolidated assets of $50,000,000,000 or greater and nonbank financial companies supervised by the Board of Governors, that takes into account differences among such companies, based on the considerations for establishing the prudential standards under section 115, to collect assessments equal to the total expenses of the Office.

156.

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;

(iii)

leadership development and succession planning; and

(iv)

effective use of technology by employees.

(B)

Workplace flexibility plan

The Office 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 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)

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.

C

Additional Board of Governors authority for certain nonbank financial companies and bank holding companies

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 title.

(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 inform the Board of Governors of—

(A)

the nature of the operations and financial condition of the company and such subsidiary;

(B)

the financial, operational, and other risks of the company or such subsidiary that may pose a threat to the safety and soundness of such company or subsidiary or to the financial stability of the United States;

(C)

the systems for monitoring and controlling such risks; and

(D)

compliance by the company or such subsidiary with the requirements of this title.

(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 subsidiary depository institution 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 reasonable notice to, and consult with, the primary financial regulatory agency for any subsidiary before requiring a report 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 fullest extent possible.

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.

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.

(5)

Hart-Scott-Rodino filing requirement

Solely for purposes of section 7A(c)(8) of the Clayton Act (15 U.S.C. 18a(c)(8)), the transactions subject to the requirements of paragraph (1) shall be treated as if Board of Governors approval is not required.

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).

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, or ongoing activities, 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 for nonbank financial companies supervised by the Board of Governors and bank holding companies with total consolidated assets equal to or greater than $50,000,000,000 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)

Tailored application

(A)

In general

In prescribing more stringent prudential standards under this section, the Board of Governors may, on its own or pursuant to a recommendation by the Council in accordance with section 115, differentiate among companies on an individual basis or by category, taking into consideration their capital structure, riskiness, complexity, financial activities (including the financial activities of their subsidiaries), size, and any other risk-related factors that the Board of Governors deems appropriate.

(B)

Adjustment of threshold for application of certain standards

The Board of Governors may, pursuant to a recommendation by the Council in accordance with section 115, establish an asset threshold above $50,000,000,000 for the application of any standard established under subsections (c) through (g).

(b)

Development of prudential standards

(1)

In general

(A)

Required standards

The Board of Governors shall 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 and leverage limits, unless the Board of Governors, in consultation with the Council, determines that such requirements are not appropriate for a company subject to more stringent prudential standards because of the activities of such company (such as investment company activities or assets under management) or structure, in which case, the Board of Governors shall apply other standards that result in similarly stringent risk controls;

(ii)

liquidity requirements;

(iii)

overall risk management requirements;

(iv)

resolution plan and credit exposure report requirements; and

(v)

concentration limits.

(B)

Additional standards authorized

The Board of Governors may establish additional 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;

(iii)

short-term debt limits; and

(iv)

such other prudential standards as the Board or Governors, on its own or pursuant to a recommendation made by the Council in accordance with section 115, determines are appropriate.

(2)

Standards for foreign financial companies

In applying the standards set forth in paragraph (1) to any foreign nonbank financial company supervised by the Board of Governors or foreign-based bank holding company, the Board of Governors shall—

(A)

give due regard to the principle of national treatment and equality of competitive opportunity; and

(B)

take into account the extent to which the foreign financial company is subject on a consolidated basis to home country standards that are comparable to those applied to financial companies in the United States.

(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 risk-related 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;

(C)

take into account any recommendations of the Council under section 115; and

(D)

adapt the required standards as appropriate in light of any predominant line of business of such company, including assets under management or other activities for which particular standards may not be appropriate.

(4)

Consultation

Before imposing prudential standards or any other requirements pursuant to this section, including notices of deficiencies in resolution plans and more stringent requirements or divestiture orders resulting from such notices, that are likely to have a significant impact on a functionally regulated subsidiary or depository institution subsidiary of a nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a), the Board of Governors shall consult with each Council member that primarily supervises any such subsidiary with respect to any such standard or requirement.

(5)

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 issue 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 contingent capital that is convertible to equity in times of financial stress.

(2)

Factors to consider

In issuing 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 contingent capital 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, which shall include—

(A)

information regarding the manner and extent to which any insured depository institution affiliated with the company is adequately protected from risks arising from the activities of any nonbank subsidiaries of the company;

(B)

full descriptions of the ownership structure, assets, liabilities, and contractual obligations of the company;

(C)

identification of the cross-guarantees tied to different securities, identification of major counterparties, and a process for determining to whom the collateral of the company is pledged; and

(D)

any other information that the Board of Governors and the Corporation jointly require by rule or order.

(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 subsection 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 of the deficiencies in the resolution plan; and

(B)

the company shall resubmit the resolution plan within a timeframe 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 jointly 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)

No limiting effect

A resolution plan submitted in accordance with this subsection shall not be binding on a bankruptcy court, a receiver appointed under title II, or any other authority that is authorized or required to resolve the nonbank financial company supervised by the Board, any bank holding company, or any subsidiary or affiliate of the foregoing.

(7)

No private right of action

No private right of action may be based on any resolution plan submitted in accordance with this subsection.

(8)

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, and 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);

(C)

all guarantees, acceptances, or letters of credit (including endorsement or standby letters of credit) issued on behalf of the company;

(D)

all purchases of or investment in securities issued by the company;

(E)

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

(F)

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

This subsection shall not apply to any Federal home loan bank. The Board of Governors may, by regulation or order, exempt transactions, in whole or in part, from the definition of the term 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)

Short-term debt limits

(1)

In general

In order to mitigate the risks that an over-accumulation of short-term debt could pose to financial companies and to the stability of the United States financial system, the Board of Governors may, by regulation, prescribe a limit on the amount of short-term debt, including off-balance sheet exposures, that may be accumulated by any bank holding company described in subsection (a) and any nonbank financial company supervised by the Board of Governors.

(2)

Basis of limit

Any limit prescribed under paragraph (1) shall be based on the short-term debt of the company described in paragraph (1) as a percentage of capital stock and surplus of the company or on such other measure as the Board of Governors considers appropriate.

(3)

Short-term debt defined

For purposes of this subsection, the term short-term debt means such liabilities with short-dated maturity that the Board of Governors identifies, by regulation, except that such term does not include insured deposits.

(4)

Rulemaking authority

In addition to prescribing regulations under paragraphs (1) and (3), the Board of Governors may prescribe such regulations, including definitions consistent with this subsection, and issue such orders, as may be necessary to carry out this subsection.

(5)

Authority to issue exemptions and adjustments

Notwithstanding the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), the Board of Governors may, if it determines such action is necessary to ensure appropriate heightened prudential supervision, with respect to a company described in paragraph (1) that does not control an insured depository institution, issue to such company an exemption from or adjustment to the limit prescribed under paragraph (1).

(h)

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(e)(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.

(i)

Stress tests

(1)

By the board of governors

(A)

Annual tests required

The Board of Governors, in coordination with the appropriate primary financial regulatory agencies and the Federal Insurance Office, shall conduct annual 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 such companies have the capital, on a total consolidated basis, necessary to absorb losses as a result of adverse economic conditions.

(B)

Test parameters and consequences

The Board of Governors—

(i)

shall provide for at least 3 different sets of conditions under which the evaluation required by this subsection shall be conducted, including baseline, adverse, and severely adverse;

(ii)

may require the tests described in subparagraph (A) at bank holding companies and nonbank financial companies, in addition to those for which annual tests are required under subparagraph (A);

(iii)

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;

(iv)

shall require the companies described in subparagraph (A) to update their resolution plans required under subsection (d)(1), as the Board of Governors determines appropriate, based on the results of the analyses; and

(v)

shall publish a summary of the results of the tests required under subparagraph (A) or clause (ii) of this subparagraph.

(2)

By the company

(A)

Requirement

A nonbank financial company supervised by the Board of Governors and a bank holding company described in subsection (a) shall conduct semiannual stress tests. All other financial companies that have total consolidated assets of more than $10,000,000,000 and are regulated by a primary Federal financial regulatory agency shall conduct annual stress tests. The tests required under this subparagraph shall be conducted in accordance with the regulations prescribed under subparagraph (C).

(B)

Report

A company required to conduct stress tests under subparagraph (A) shall submit a report to the Board of Governors and to its primary financial regulatory agency at such time, in such form, and containing such information as the primary financial regulatory agency shall require.

(C)

Regulations

Each Federal primary financial regulatory agency, in coordination with the Board of Governors and the Federal Insurance Office, shall issue consistent and comparable regulations to implement this paragraph that shall—

(i)

define the term stress test for purposes of this paragraph;

(ii)

establish methodologies for the conduct of stress tests required by this paragraph that shall provide for at least 3 different sets of conditions, including baseline, adverse, and severely adverse;

(iii)

establish the form and content of the report required by subparagraph (B); and

(iv)

require companies subject to this paragraph to publish a summary of the results of the required stress tests.

(j)

Leverage limitation

(1)

Requirement

The Board of Governors shall require 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 to maintain a debt to equity ratio of no more than 15 to 1, upon a determination by the Council that such company poses a grave threat to the financial stability of the United States and that the imposition of such requirement is necessary to mitigate the risk that such company poses to the financial stability of the United States. Nothing in this paragraph shall apply to a Federal home loan bank.

(2)

Considerations

In making a determination under this subsection, the Council shall consider the factors described in subsections (a) and (b) of section 113 and any other risk-related factors that the Council deems appropriate.

(3)

Regulations

The Board of Governors shall promulgate regulations to establish procedures and timelines for complying with the requirements of this subsection.

(k)

Inclusion of off-balance-sheet activities in computing capital requirements

(1)

In general

In the case of any bank holding company described in subsection (a) or nonbank financial company supervised by the Board of Governors, the computation of capital for purposes of meeting capital requirements shall take into account any off-balance-sheet activities of the company.

(2)

Exemptions

If the Board of Governors determines that an exemption from the requirement under paragraph (1) is appropriate, the Board of Governors may exempt a company, or any transaction or transactions engaged in by such company, from the requirements of paragraph (1).

(3)

Off-balance-sheet activities defined

For purposes of this subsection, the term off-balance-sheet activities means an existing liability of a company that is not currently a balance sheet liability, but may become one upon the happening of some future event, including the following transactions, to the extent that they may create a liability:

(A)

Direct credit substitutes in which a bank substitutes its own credit for a third party, including standby letters of credit.

(B)

Irrevocable letters of credit that guarantee repayment of commercial paper or tax-exempt securities.

(C)

Risk participations in bankers’ acceptances.

(D)

Sale and repurchase agreements.

(E)

Asset sales with recourse against the seller.

(F)

Interest rate swaps.

(G)

Credit swaps.

(H)

Commodities contracts.

(I)

Forward contracts.

(J)

Securities contracts.

(K)

Such other activities or transactions as the Board of Governors may, by rule, define.

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.

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

(A)

Board authority

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 all or a portion of such activities that are determined to be financial in nature or incidental thereto in or through an intermediate holding company established pursuant to regulation of the Board of Governors, not later than 90 days (or such longer period as the Board of Governors may deem appropriate) after the date on which the nonbank financial company supervised by the Board of Governors is notified of the determination of the Board of Governors under this section.

(B)

Necessary actions

Notwithstanding subparagraph (A), the Board of Governors shall require a nonbank financial company supervised by the Board of Governors to establish an intermediate holding company if the Board of Governors makes a determination that the establishment of such intermediate holding company is necessary to—

(i)

appropriately supervise activities that are determined to be financial in nature or incidental thereto; or

(ii)

to ensure that supervision by the Board of Governors does not extend to the commercial activities of such nonbank financial company.

(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, including internal treasury, investment, and employee benefit functions. With respect to any internal financial activity engaged in for the company or an affiliate and a non-affiliate of such company during the year prior to the date of enactment of this Act, such company (or an affiliate that is not an intermediate holding company or subsidiary of an intermediate holding company) may continue to engage in such activity, as long as not less than 2⁄3 of the assets or 2⁄3 of the revenues generated from the activity are from or attributable to such company or an affiliate, 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.

(3)

Source of strength

A company that directly or indirectly controls an intermediate holding company established under this section shall serve as a source of strength to its subsidiary intermediate holding company.

(4)

Parent company reports

The Board of Governors may, from time to time, require reports under oath from a company that controls an intermediate holding company, and from the appropriate officers or directors of such company, solely for purposes of ensuring compliance with the provisions of this section, including assessing the ability of the company to serve as a source of strength to its subsidiary intermediate holding company pursuant to paragraph (3) and enforcing such compliance.

(5)

Limited parent company enforcement

(A)

In general

In addition to any other authority of the Board of Governors, the Board of Governors may enforce compliance with the provisions of this subsection that are applicable to any company described in paragraph (1) that controls an intermediate holding company under section 8 of the Federal Deposit Insurance Act, and such company shall be subject to such section (solely for such purposes) in the same manner and to the same extent as if such company were a bank holding company.

(B)

Application of other Act

Any violation of this subsection by any company that controls an intermediate holding company may also be treated as a violation of the Federal Deposit Insurance Act for purposes of subparagraph (A).

(C)

No effect on other authority

No provision of this paragraph shall be construed as limiting any authority of the Board of Governors or any other Federal agency under any other provision of law.

(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 (b); 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.

168.

Regulations

The Board of Governors shall have authority to issue regulations to implement subtitles A and C and the amendments made thereunder. Except as otherwise specified in subtitle A or C, not later than 18 months after the effective date of this Act, the Board of Governors shall issue final regulations to implement subtitles A and C, and the amendments made thereunder.

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.

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)

Revisions

(1)

In general

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.

(2)

Transition period

No revisions under paragraph (1) shall take effect before the end of the 2-year period after the date of publication of such revisions in final form.

(e)

Report

The Chairman 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 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.

171.

Leverage and risk-based capital requirements

(a)

Definitions

For purposes of this section, the following definitions shall apply:

(1)

Generally applicable leverage capital requirements

The term generally applicable leverage capital requirements means—

(A)

the minimum ratios of tier 1 capital to average total assets, as established by the appropriate Federal banking agencies to apply to insured depository institutions under the prompt corrective action regulations implementing section 38 of the Federal Deposit Insurance Act, regardless of total consolidated asset size or foreign financial exposure; and

(B)

includes the regulatory capital components in the numerator of that capital requirement, average total assets in the denominator of that capital requirement, and the required ratio of the numerator to the denominator.

(2)

Generally applicable risk-based capital requirements

The term generally applicable risk-based capital requirements means—

(A)

the risk-based capital requirements, as established by the appropriate Federal banking agencies to apply to insured depository institutions under the prompt corrective action regulations implementing section 38 of the Federal Deposit Insurance Act, regardless of total consolidated asset size or foreign financial exposure; and

(B)

includes the regulatory capital components in the numerator of those capital requirements, the risk-weighted assets in the denominator of those capital requirements, and the required ratio of the numerator to the denominator.

(3)

Definition of depository institution holding company

The term depository institution holding company means a bank holding company or a savings and loan holding company (as those terms are defined in section 3 of the Federal Deposit Insurance Act) that is organized in the United States, including any bank or savings and loan holding company that is owned or controlled by a foreign organization, but does not include the foreign organization.

(b)

Minimum capital requirements

(1)

Minimum leverage capital requirements

The appropriate Federal banking agencies shall establish minimum leverage capital requirements on a consolidated basis for insured depository institutions, depository institution holding companies, and nonbank financial companies supervised by the Board of Governors. The minimum leverage capital requirements established under this paragraph shall not be less than the generally applicable leverage capital requirements, which shall serve as a floor for any capital requirements that the agency may require, nor quantitatively lower than the generally applicable leverage capital requirements that were in effect for insured depository institutions as of the date of enactment of this Act.

(2)

Minimum risk-based capital requirements

The appropriate Federal banking agencies shall establish minimum risk-based capital requirements on a consolidated basis for insured depository institutions, depository institution holding companies, and nonbank financial companies supervised by the Board of Governors. The minimum risk-based capital requirements established under this paragraph shall not be less than the generally applicable risk-based capital requirements, which shall serve as a floor for any capital requirements that the agency may require, nor quantitatively lower than the generally applicable risk-based capital requirements that were in effect for insured depository institutions as of the date of enactment of this Act.

(3)

Investments in financial subsidiaries

For purposes of this section, investments in financial subsidiaries that insured depository institutions are required to deduct from regulatory capital under section 5136A of the Revised Statutes of the United States or section 46(a)(2) of the Federal Deposit Insurance Act need not be deducted from regulatory capital by depository institution holding companies or nonbank financial companies supervised by the Board of Governors, unless such capital deduction is required by the Board of Governors or the primary financial regulatory agency in the case of nonbank financial companies supervised by the Board of Governors.

(4)

Effective dates and phase-in periods

(A)

Debt or equity instruments on or after May 19, 2010

For debt or equity instruments issued on or after May 19, 2010, by depository institution holding companies or by nonbank financial companies supervised by the Board of Governors, this section shall be deemed to have become effective as of May 19, 2010.

(B)

Debt or equity instruments issued before May 19, 2010

For debt or equity instruments issued before May 19, 2010, by depository institution holding companies or by nonbank financial companies supervised by the Board of Governors, any regulatory capital deductions required under this section shall be phased in incrementally over a period of 3 years, with the phase-in period to begin on January 1, 2013, except as set forth in subparagraph (C).

(C)

Debt or equity instruments of smaller institutions

For debt or equity instruments issued before May 19, 2010, by depository institution holding companies with total consolidated assets of less than $15,000,000,000 as of December 31, 2009, and by organizations that were mutual holding companies on May 19, 2010, the capital deductions that would be required for other institutions under this section are not required as a result of this section.

(D)

Depository institution holding companies not previously supervised by the board of governors

For any depository institution holding company that was not supervised by the Board of Governors as of May 19, 2010, the requirements of this section, except as set forth in subparagraphs (A) and (B), shall be effective 5 years after the date of enactment of this Act

(E)

Certain bank holding company subsidiaries of foreign banking organizations

For bank holding company subsidiaries of foreign banking organizations that have relied on Supervision and Regulation Letter SR-01-1 issued by the Board of Governors (as in effect on May 19, 2010), the requirements of this section, except as set forth in subparagraph (A), shall be effective 5 years after the date of enactment of this Act.

(5)

Exceptions

This section shall not apply to—

(A)

debt or equity instruments issued to the United States or any agency or instrumentality thereof pursuant to the Emergency Economic Stabilization Act of 2008, and prior to October 4, 2010;

(B)

any Federal home loan bank; or

(C)

any small bank holding company that is subject to the Small Bank Holding Company Policy Statement of the Board of Governors, as in effect on May 19, 2010.

(6)

Study and report on small institution access to capital

(A)

Study required

The Comptroller General of the United States, after consultation with the Federal banking agencies, shall conduct a study of access to capital by smaller insured depository institutions.

(B)

Scope

For purposes of this study required by subparagraph (A), the term smaller insured depository institution means an insured depository institution with total consolidated assets of $5,000,000,000 or less.

(C)

Report to Congress

Not later than 18 months after the date of enactment of this Act, the Comptroller General of the United States 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 summarizing the results of the study conducted under subparagraph (A), together with any recommendations for legislative or regulatory action that would enhance the access to capital of smaller insured depository institutions, in a manner that is consistent with safe and sound banking operations.

(7)

Capital requirements to address activities that pose risks to the financial system

(A)

In general

Subject to the recommendations of the Council, in accordance with section 120, the Federal banking agencies shall develop capital requirements applicable to insured depository institutions, depository institution holding companies, and nonbank financial companies supervised by the Board of Governors that address the risks that the activities of such institutions pose, not only to the institution engaging in the activity, but to other public and private stakeholders in the event of adverse performance, disruption, or failure of the institution or the activity.

(B)

Content

Such rules shall address, at a minimum, the risks arising from—

(i)

significant volumes of activity in derivatives, securitized products purchased and sold, financial guarantees purchased and sold, securities borrowing and lending, and repurchase agreements and reverse repurchase agreements;

(ii)

concentrations in assets for which the values presented in financial reports are based on models rather than historical cost or prices deriving from deep and liquid 2-way markets; and

(iii)

concentrations in market share for any activity that would substantially disrupt financial markets if the institution is forced to unexpectedly cease the activity.

172.

Examination and enforcement actions for insurance and orderly liquidation purposes

(a)

Examinations for insurance and resolution purposes

Section 10(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)) is amended—

(1)

by striking In addition and inserting the following:

(A)

In general

In addition

; and

(2)

by striking whenever the board of directors determines and all that follows through the period and inserting the following: “or nonbank financial company supervised by the Board of Governors or a bank holding company described in section 165(a) of the Financial Stability Act of 2010, whenever the Board of Directors determines that a special examination of any such depository institution is necessary to determine the condition of such depository institution for insurance purposes, or of such nonbank financial company supervised by the Board of Governors or bank holding company described in section 165(a) of the Financial Stability Act of 2010, for the purpose of implementing its authority to provide for orderly liquidation of any such company under title II of that Act, provided that such authority may not be used with respect to any such company that is in a generally sound condition.

(B)

Limitation

Before conducting a special examination of a nonbank financial company supervised by the Board of Governors or a bank holding company described in section 165(a) of the Financial Stability Act of 2010, the Corporation shall review any available and acceptable resolution plan that the company has submitted in accordance with section 165(d) of that Act, consistent with the nonbinding effect of such plan, and available reports of examination, and shall coordinate to the maximum extent practicable with the Board of Governors, in order to minimize duplicative or conflicting examinations.

.

(b)

Enforcement authority

Section 8(t) of the Federal Deposit Insurance Act (12 U.S.C. 1818(t)) is amended—

(1)

in paragraph (1), by inserting , any depository institution holding company, before or any institution-affiliated party;

(2)

in paragraph (2)—

(A)

by striking or at the end of subparagraph (B);

(B)

at the end of subparagraph (C), by striking the period and inserting or; and

(C)

by inserting at the end the following new subparagraph:

(D)

the conduct or threatened conduct (including any acts or omissions) of the depository institution holding company poses a risk to the Deposit Insurance Fund, provided that such authority may not be used with respect to a depository institution holding company that is in generally sound condition and whose conduct does not pose a foreseeable and material risk of loss to the Deposit Insurance Fund;

; and

(3)

by adding at the end the following:

(6)

Powers and duties with respect to depository institution holding companies

For purposes of exercising the backup authority provided in this subsection—

(A)

the Corporation shall have the same powers with respect to a depository institution holding company and its affiliates as the appropriate Federal banking agency has with respect to the holding company and its affiliates; and

(B)

the holding company and its affiliates shall have the same duties and obligations with respect to the Corporation as the holding company and its affiliates have with respect to the appropriate Federal banking agency.

.

(c)

Rule of construction

Nothing in this Act shall be construed to limit or curtail the Corporation’s current authority to examine or bring enforcement actions with respect to any insured depository institution or institution-affiliated party.

173.

Access to United States financial market by foreign institutions

(a)

Establishment of foreign bank offices in the United States

Section 7(d)(3) of the International Banking Act of 1978 (12 U.S.C. 3105(d)(3)) is amended—

(1)

in subparagraph (C), by striking and at the end;

(2)

in subparagraph (D), by striking the period at the end of and inserting ; and; and

(3)

by adding at the end the following new subparagraph:

(E)

for a foreign bank that presents a risk to the stability of United States financial system, whether the home country of the foreign bank has adopted, or is making demonstrable progress toward adopting, an appropriate system of financial regulation for the financial system of such home country to mitigate such risk.

.

(b)

Termination of foreign bank offices in the United States

Section 7(e)(1) of the International Banking Act of 1978 (12 U.S.C. 3105(e)(1)) is amended—

(1)

in subparagraph (A), by striking or at the end;

(2)

in subparagraph (B), by striking the period at the end of and inserting ; or; and

(3)

by inserting after subparagraph (B), the following new subparagraph:

(C)

for a foreign bank that presents a risk to the stability of the United States financial system, the home country of the foreign bank has not adopted, or made demonstrable progress toward adopting, an appropriate system of financial regulation to mitigate such risk.

.

(c)

Registration or succession to a United States broker or dealer and termination of such registration

Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended by adding at the end the following new subsections:

(k)

Registration or succession to a United States broker or dealer

In determining whether to permit a foreign person or an affiliate of a foreign person to register as a United States broker or dealer, or succeed to the registration of a United States broker or dealer, the Commission may consider whether, for a foreign person, or an affiliate of a foreign person that presents a risk to the stability of the United States financial system, the home country of the foreign person has adopted, or made demonstrable progress toward adopting, an appropriate system of financial regulation to mitigate such risk.

(l)

Termination of a United States broker or dealer

For a foreign person or an affiliate of a foreign person that presents such a risk to the stability of the United States financial system, the Commission may determine to terminate the registration of such foreign person or an affiliate of such foreign person as a broker or dealer in the United States, if the Commission determines that the home country of the foreign person has not adopted, or made demonstrable progress toward adopting, an appropriate system of financial regulation to mitigate such risk.

.

174.

Studies and reports on holding company capital requirements

(a)

Study of hybrid capital instruments

The Comptroller General of the United States, in consultation with the Board of Governors, the Comptroller of the Currency, and the Corporation, shall conduct a study of the use of hybrid capital instruments as a component of Tier 1 capital for banking institutions and bank holding companies. The study shall consider—

(1)

the current use of hybrid capital instruments, such as trust preferred shares, as a component of Tier 1 capital;

(2)

the differences between the components of capital permitted for insured depository institutions and those permitted for companies that control insured depository institutions;

(3)

the benefits and risks of allowing such instruments to be used to comply with Tier 1 capital requirements;

(4)

the economic impact of prohibiting the use of such capital instruments for Tier 1;

(5)

a review of the consequences of disqualifying trust preferred instruments, and whether it could lead to the failure or undercapitalization of existing banking organizations;

(6)

the international competitive implications prohibiting hybrid capital instruments for Tier 1;

(7)

the impact on the cost and availability of credit in the United States from such a prohibition;

(8)

the availability of capital for financial institutions with less than $10,000,000,000 in total assets; and

(9)

any other relevant factors relating to the safety and soundness of our financial system and potential economic impact of such a prohibition.

(b)

Study of foreign bank intermediate holding company capital requirements

The Comptroller General of the United States, in consultation with the Secretary, the Board of Governors, the Comptroller of the Currency, and the Corporation, shall conduct a study of capital requirements applicable to United States intermediate holding companies of foreign banks that are bank holding companies or savings and loan holding companies. The study shall consider—

(1)

current Board of Governors policy regarding the treatment of intermediate holding companies;

(2)

the principle of national treatment and equality of competitive opportunity for foreign banks operating in the United States;

(3)

the extent to which foreign banks are subject on a consolidated basis to home country capital standards comparable to United States capital standards;

(4)

potential effects on United States banking organizations operating abroad of changes to United States policy regarding intermediate holding companies;

(5)

the impact on the cost and availability of credit in the United States from a change in United States policy regarding intermediate holding companies; and

(6)

any other relevant factors relating to the safety and soundness of our financial system and potential economic impact of such a prohibition.

(c)

Report

Not later than 18 months after the date of enactment of this Act, the Comptroller General of the United States shall submit reports to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives summarizing the results of the studies required under subsection (a). The reports shall include specific recommendations for legislative or regulatory action regarding the treatment of hybrid capital instruments, including trust preferred shares, and shall explain the basis for such recommendations.

175.

International policy coordination

(a)

By the President

The President, or a designee of the President, may coordinate through all available international policy channels, similar policies as those found in United States law relating to limiting the scope, nature, size, scale, concentration, and interconnectedness of financial companies, in order to protect financial stability and the global economy.

(b)

By the Council

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 systemic risk to the international financial system.

(c)

By the Board of Governors and the Secretary

The Board of Governors and the Secretary shall consult with their foreign counterparts and through appropriate multilateral organizations to encourage comprehensive and robust prudential supervision and regulation for all highly leveraged and interconnected financial companies.

176.

Rule of construction

No regulation or standard imposed under this title may be construed in a manner that would lessen the stringency of the requirements of any applicable primary financial regulatory agency or any other Federal or State agency that are otherwise applicable. This title, and the rules and regulations or orders prescribed pursuant to this title, do not divest any such agency of any authority derived from any other applicable law.

II

Orderly liquidation authority

201.

Definitions

(a)

In general

In this title, the following definitions shall apply:

(1)

Administrative expenses of the receiver

The term administrative expenses of the receiver includes—

(A)

the actual, necessary costs and expenses incurred by the Corporation as receiver for a covered financial company in liquidating a covered financial company; and

(B)

any obligations that the Corporation as receiver for a covered financial company determines are necessary and appropriate to facilitate the smooth and orderly liquidation of the covered financial company.

(2)

Bankruptcy code

The term Bankruptcy Code means title 11, United States Code.

(3)

Bridge financial company

The term bridge financial company means a new financial company organized by the Corporation in accordance with section 210(h) for the purpose of resolving a covered financial company.

(4)

Claim

The term claim means any right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.

(5)

Company

The term company has the same meaning as in section 2(b) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(b)), except that such term includes any company described in paragraph (11), the majority of the securities of which are owned by the United States or any State.

(6)

Court

The term Court means the United States District Court for the District of Columbia, unless the context otherwise requires.

(7)

Covered broker or dealer

The term covered broker or dealer means a covered financial company that is a broker or dealer that—

(A)

is registered with the Commission under section 15(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)); and

(B)

is a member of SIPC.

(8)

Covered financial company

The term covered financial company

(A)

means a financial company for which a determination has been made under section 203(b); and

(B)

does not include an insured depository institution.

(9)

Covered subsidiary

The term covered subsidiary means a subsidiary of a covered financial company, other than—

(A)

an insured depository institution;

(B)

an insurance company; or

(C)

a covered broker or dealer.

(10)

Definitions relating to covered brokers and dealers

The terms customer, customer name securities, customer property, and net equity in the context of a covered broker or dealer, have the same meanings as in section 16 of the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll).

(11)

Financial company

The term financial company means any company that—

(A)

is incorporated or organized under any provision of Federal law or the laws of any State;

(B)

is—

(i)

a bank holding company, as defined in section 2(a) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(a));

(ii)

a nonbank financial company supervised by the Board of Governors;

(iii)

any company 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)) other than a company described in clause (i) or (ii); or

(iv)

any subsidiary of any company described in any of clauses (i) through (iii) 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)) (other than a subsidiary that is an insured depository institution or an insurance company); and

(C)

is not a Farm Credit System institution chartered under and subject to the provisions of the Farm Credit Act of 1971, as amended (12 U.S.C. 2001 et seq.), a governmental entity, or a regulated entity, as defined under section 1303(20) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4502(20)).

(12)

Fund

The term Fund means the Orderly Liquidation Fund established under section 210(n).

(13)

Insurance company

The term insurance company means any entity that is—

(A)

engaged in the business of insurance;

(B)

subject to regulation by a State insurance regulator; and

(C)

covered by a State law that is designed to specifically deal with the rehabilitation, liquidation, or insolvency of an insurance company.

(14)

Nonbank financial company

The term nonbank financial company has the same meaning as in section 102(a)(4)(C).

(15)

Nonbank financial company supervised by the board of governors

The term nonbank financial company supervised by the Board of Governors has the same meaning as in section 102(a)(4)(D).

(16)

SIPC

The term SIPC means the Securities Investor Protection Corporation.

(b)

Definitional criteria

For purpose of the definition of the term financial company under subsection (a)(11), 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.

202.

Judicial review

(a)

Commencement of orderly liquidation

(1)

Petition to district court

(A)

District court review

(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 receiver, the Secretary shall appoint the Corporation as 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 receiver.

(ii)

Form and content of order

The Secretary shall present all relevant findings and the recommendation made pursuant to section 203(a) to the Court. The petition shall be filed under seal.

(iii)

Determination

On a strictly confidential basis, and without any prior public disclosure, the Court, after notice to the covered financial company and a hearing in which the covered financial company may oppose the petition, shall determine whether the determination of the Secretary that the covered financial company is in default or in danger of default and satisfies the definition of a financial company under section 201(a)(11) is arbitrary and capricious.

(iv)

Issuance of order

If the Court determines that the determination of the Secretary that the covered financial company is in default or in danger of default and satisfies the definition of a financial company under section 201(a)(11)—

(I)

is not arbitrary and capricious, the Court shall issue an order immediately authorizing the Secretary to appoint the Corporation as receiver of the covered financial company; or

(II)

is arbitrary and capricious, the Court shall immediately provide to the Secretary a written statement of each reason supporting its determination, and afford the Secretary an immediate opportunity to amend and refile the petition under clause (i).

(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.

(B)

Effect of determination

The determination of the Court under subparagraph (A) shall be final, and shall be subject to appeal only in accordance with paragraph (2). The decision shall not be subject to any stay or injunction pending appeal. Upon conclusion of its proceedings under subparagraph (A), the Court shall provide immediately for the record a written statement of each reason supporting the decision of the Court, and shall provide copies thereof to the Secretary and the covered financial company.

(C)

Criminal penalties

A person who recklessly discloses a determination of the Secretary under section 203(b) or a petition of the Secretary under subparagraph (A), or the pendency of court proceedings as provided for under subparagraph (A), shall be fined not more than $250,000, or imprisoned for not more than 5 years, or both.

(2)

Appeal of decisions of the district court

(A)

Appeal to court of appeals

(i)

In general

Subject to clause (ii), the United States Court of Appeals for the District of Columbia Circuit shall have jurisdiction of an appeal of a final decision of the Court filed by the Secretary or a covered financial company, through its board of directors, notwithstanding section 210(a)(1)(A)(i), not later than 30 days after the date on which the decision of the Court is rendered or deemed rendered under this subsection.

(ii)

Condition of jurisdiction

The Court of Appeals shall have jurisdiction of an appeal by a covered financial company only if the covered financial company did not acquiesce or consent to the appointment of a receiver by the Secretary under paragraph (1)(A).

(iii)

Expedition

The Court of Appeals shall consider any appeal under this subparagraph on an expedited basis.

(iv)

Scope of review

For an appeal taken under this subparagraph, review shall be limited to whether the determination of the Secretary that a covered financial company is in default or in danger of default and satisfies the definition of a financial company under section 201(a)(11) is arbitrary and capricious.

(B)

Appeal to the supreme court

(i)

In general

A petition for a writ of certiorari to review a decision of the Court of Appeals under subparagraph (A) may be filed by the Secretary or the covered financial company, through its board of directors, notwithstanding section 210(a)(1)(A)(i), with the Supreme Court of the United States, not later than 30 days after the date of the final decision of the Court of Appeals, and the Supreme Court shall have discretionary jurisdiction to review such decision.

(ii)

Written statement

In the event of a petition under clause (i), the Court of Appeals shall immediately provide for the record a written statement of each reason for its decision.

(iii)

Expedition

The Supreme Court shall consider any petition under this subparagraph on an expedited basis.

(iv)

Scope of review

Review by the Supreme Court under this subparagraph shall be limited to whether the determination of the Secretary that the covered financial company is in default or in danger of default and satisfies the definition of a financial company under section 201(a)(11) is arbitrary and capricious.

(b)

Establishment and transmittal of rules and procedures

(1)

In general

Not later than 6 months after the date of enactment of this Act, the Court shall establish such rules and procedures as may be necessary to ensure the orderly conduct of proceedings, including rules and procedures to ensure that the 24-hour deadline is met and that the Secretary shall have an ongoing opportunity to amend and refile petitions under subsection (a)(1).

(2)

Publication of rules

The rules and procedures established under paragraph (1), and any modifications of such rules and procedures, shall be recorded and shall be transmitted to—

(A)

the Committee on the Judiciary of the Senate;

(B)

the Committee on Banking, Housing, and Urban Affairs of the Senate;

(C)

the Committee on the Judiciary of the House of Representatives; and

(D)

the Committee on Financial Services of the House of Representatives.

(c)

Provisions applicable to financial companies

(1)

Bankruptcy code

Except as provided in this subsection, the provisions of the Bankruptcy Code and rules issued thereunder or otherwise applicable insolvency law, and not the provisions of this title, shall apply to financial companies that are not covered financial companies for which the Corporation has been appointed as receiver.

(2)

This title

The provisions of this title shall exclusively apply to and govern all matters relating to covered financial companies for which the Corporation is appointed as receiver, and no provisions of the Bankruptcy Code or the rules issued thereunder shall apply in such cases, except as expressly provided in this title.

(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.

(e)

Study of bankruptcy and orderly liquidation process for financial companies

(1)

Study

(A)

In general

The Administrative Office of the United States Courts and the Comptroller General of the United States shall each monitor the activities of the Court, and each such Office shall conduct separate studies regarding the bankruptcy and orderly liquidation process for financial companies under the Bankruptcy Code.

(B)

Issues to be studied

In conducting the study under subparagraph (A), the Administrative Office of the United States Courts and the Comptroller General of the United States each shall evaluate—

(i)

the effectiveness of chapter 7 or chapter 11 of the Bankruptcy Code in facilitating the orderly liquidation or reorganization of financial companies;

(ii)

ways to maximize the efficiency and effectiveness of the Court; and

(iii)

ways to make the orderly liquidation process under the Bankruptcy Code for financial companies more effective.

(2)

Reports

Not later than 1 year after the date of enactment of this Act, in each successive year until the third year, and every fifth year after that date of enactment, the Administrative Office of the United States Courts and the Comptroller General of the United States shall submit to the Committee on Banking, Housing, and Urban Affairs and the Committee on the Judiciary of the Senate and the Committee on Financial Services and the Committee on the Judiciary of the House of Representatives separate reports summarizing the results of the studies conducted under paragraph (1).

(f)

Study of international coordination relating to bankruptcy process for financial companies

(1)

Study

(A)

In general

The Comptroller General of the United States shall conduct a study regarding international coordination relating to the orderly liquidation of financial companies under the Bankruptcy Code.

(B)

Issues to be studied

In conducting the study under subparagraph (A), the Comptroller General of the United States shall evaluate, with respect to the bankruptcy process for financial companies—

(i)

the extent to which international coordination currently exists;

(ii)

current mechanisms and structures for facilitating international cooperation;

(iii)

barriers to effective international coordination; and

(iv)

ways to increase and make more effective international coordination.

(2)

Report

Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Banking, Housing, and Urban Affairs and the Committee on the Judiciary of the Senate and the Committee on Financial Services and the Committee on the Judiciary of the House of Representatives and the Secretary a report summarizing the results of the study conducted under paragraph (1).

(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 year 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.

203.

Systemic risk determination

(a)

Written recommendation and determination

(1)

Vote required

(A)

In general

On their own initiative, or at the request of the Secretary, the Corporation and the Board of Governors shall consider whether to make a written recommendation described in paragraph (2) with respect to whether the Secretary should appoint the Corporation as receiver for a financial company. Such recommendation shall be made upon a vote of not fewer than 2/3 of the members of the Board of Governors then serving and 2/3 of the members of the board of directors of the Corporation then serving.

(B)

Cases involving brokers or dealers

In the case of a broker or dealer, or in which the largest United States subsidiary (as measured by total assets as of the end of the previous calendar quarter) of a financial company is a broker or dealer, the Commission and the Board of Governors, at the request of the Secretary, or on their own initiative, shall consider whether to make the written recommendation described in paragraph (2) with respect to the financial company. Subject to the requirements in paragraph (2), such recommendation shall be made upon a vote of not fewer than 2/3 of the members of the Board of Governors then serving and 2/3 of the members of the Commission then serving, and in consultation with the Corporation.

(C)

Cases involving insurance companies

In the case of an insurance company, or in which the largest United States subsidiary (as measured by total assets as of the end of the previous calendar quarter) of a financial company is an insurance company, the Director of the Federal Insurance Office and the Board of Governors, at the request of the Secretary or on their own initiative, shall consider whether to make the written recommendation described in paragraph (2) with respect to the financial company. Subject to the requirements in paragraph (2), such recommendation shall be made upon a vote of not fewer than 2/3 of the Board of Governors then serving and the affirmative approval of the Director of the Federal Insurance Office, and in consultation with the Corporation.

(2)

Recommendation required

Any written recommendation pursuant to paragraph (1) shall contain—

(A)

an evaluation of whether the financial company is in default or in danger of default;

(B)

a description of the effect that the default of the financial company would have on financial stability in the United States;

(C)

a description of the effect that the default of the financial company would have on economic conditions or financial stability for low income, minority, or underserved communities;

(D)

a recommendation regarding the nature and the extent of actions to be taken under this title regarding the financial company;

(E)

an evaluation of the likelihood of a private sector alternative to prevent the default of the financial company;

(F)

an evaluation of why a case under the Bankruptcy Code is not appropriate for the financial company;

(G)

an evaluation of the effects on creditors, counterparties, and shareholders of the financial company and other market participants; and

(H)

an evaluation of whether the company satisfies the definition of a financial company under section 201.

(b)

Determination by the Secretary

Notwithstanding any other provision of Federal or State law, the Secretary shall take action in accordance with section 202(a)(1)(A), if, upon the written recommendation under subsection (a), the Secretary (in consultation with the President) determines that—

(1)

the financial company is in default or in danger of default;

(2)

the failure of the financial company and its resolution under otherwise applicable Federal or State law would have serious adverse effects on financial stability in the United States;

(3)

no viable private sector alternative is available to prevent the default of the financial company;

(4)

any effect on the claims or interests of creditors, counterparties, and shareholders of the financial company and other market participants as a result of actions to be taken under this title is appropriate, given the impact that any action taken under this title would have on financial stability in the United States;

(5)

any action under section 204 would avoid or mitigate such adverse effects, taking into consideration the effectiveness of the action in mitigating potential adverse effects on the financial system, the cost to the general fund of the Treasury, and the potential to increase excessive risk taking on the part of creditors, counterparties, and shareholders in the financial company;

(6)

a Federal regulatory agency has ordered the financial company to convert all of its convertible debt instruments that are subject to the regulatory order; and

(7)

the company satisfies the definition of a financial company under section 201.

(c)

Documentation and review

(1)

In general

The Secretary shall—

(A)

document any determination under subsection (b);

(B)

retain the documentation for review under paragraph (2); and

(C)

notify the covered financial company and the Corporation of such determination.

(2)

Report to congress

Not later than 24 hours after the date of appointment of the Corporation as receiver for a covered financial company, the Secretary shall provide written notice of the recommendations and determinations reached in accordance with subsections (a) and (b) to the Majority Leader and the Minority Leader of the Senate and the Speaker and the Minority Leader of the House of Representatives, the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives, which shall consist of a summary of the basis for the determination, including, to the extent available at the time of the determination—

(A)

the size and financial condition of the covered financial company;

(B)

the sources of capital and credit support that were available to the covered financial company;

(C)

the operations of the covered financial company that could have had a significant impact on financial stability, markets, or both;

(D)

identification of the banks and financial companies which may be able to provide the services offered by the covered financial company;

(E)

any potential international ramifications of resolution of the covered financial company under other applicable insolvency law;

(F)

an estimate of the potential effect of the resolution of the covered financial company under other applicable insolvency law on the financial stability of the United States;

(G)

the potential effect of the appointment of a receiver by the Secretary on consumers;

(H)

the potential effect of the appointment of a receiver by the Secretary on the financial system, financial markets, and banks and other financial companies; and

(I)

whether resolution of the covered financial company under other applicable insolvency law would cause banks or other financial companies to experience severe liquidity distress.

(3)

Reports to Congress and the public

(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.

(B)

Amendments

The Corporation shall, on a timely basis, not less frequently than quarterly, amend or revise and resubmit the reports prepared under this paragraph, as necessary.

(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).

(4)

Default or in danger of default

For purposes of this title, a financial company shall be considered to be in default or in danger of default if, as determined in accordance with subsection (b)—

(A)

a case has been, or likely will promptly be, commenced with respect to the financial company under the Bankruptcy Code;

(B)

the financial company has incurred, or is likely to incur, losses that will deplete all or substantially all of its capital, and there is no reasonable prospect for the company to avoid such depletion;

(C)

the assets of the financial company are, or are likely to be, less than its obligations to creditors and others; or

(D)

the financial company is, or is likely to be, unable to pay its obligations (other than those subject to a bona fide dispute) in the normal course of business.

(5)

GAO review

The Comptroller General of the United States shall review and report to Congress on any determination under subsection (b), that results in the appointment of the Corporation as receiver, including—

(A)

the basis for the determination;

(B)

the purpose for which any action was taken pursuant thereto;

(C)

the likely effect of the determination and such action on the incentives and conduct of financial companies and their creditors, counterparties, and shareholders; and

(D)

the likely disruptive effect of the determination and such action on the reasonable expectations of creditors, counterparties, and shareholders, taking into account the impact any action under this title would have on financial stability in the United States, including whether the rights of such parties will be disrupted.

(d)

Corporation policies and procedures

As soon as is practicable after the date of enactment of this Act, the Corporation shall establish policies and procedures that are acceptable to the Secretary governing the use of funds available to the Corporation to carry out this title, including the terms and conditions for the provision and use of funds under sections 204(d), 210(h)(2)(G)(iv), and 210(h)(9).

(e)

Treatment of insurance companies and insurance company subsidiaries

(1)

In general

Notwithstanding subsection (b), if an insurance company is a covered financial company or a subsidiary or affiliate of a covered financial company, the liquidation or rehabilitation of such insurance company, and any subsidiary or affiliate of such company that is not excepted under paragraph (2), shall be conducted as provided under applicable State law.

(2)

Exception for subsidiaries and affiliates

The requirement of paragraph (1) shall not apply with respect to any subsidiary or affiliate of an insurance company that is not itself an insurance company.

(3)

Backup authority

Notwithstanding paragraph (1), with respect to a covered financial company described in paragraph (1), if, after the end of the 60-day period beginning on the date on which a determination is made under section 202(a) with respect to such company, the appropriate regulatory agency has not filed the appropriate judicial action in the appropriate State court to place such company into orderly liquidation under the laws and requirements of the State, the Corporation shall have the authority to stand in the place of the appropriate regulatory agency and file the appropriate judicial action in the appropriate State court to place such company into orderly liquidation under the laws and requirements of the State.

204.

Orderly liquidation of covered financial companies

(a)

Purpose of orderly liquidation authority

It is the purpose of this title to provide the necessary authority to liquidate failing financial companies that pose a significant risk to the financial stability of the United States in a manner that mitigates such risk and minimizes moral hazard. The authority provided in this title shall be exercised in the manner that best fulfills such purpose, so that—

(1)

creditors and shareholders will bear the losses of the financial company;

(2)

management responsible for the condition of the financial company will not be retained; and

(3)

the Corporation and other appropriate agencies will take all steps necessary and appropriate to assure that all parties, including management, directors, and third parties, having responsibility for the condition of the financial company bear losses consistent with their responsibility, including actions for damages, restitution, and recoupment of compensation and other gains not compatible with such responsibility.

(b)

Corporation as receiver

Upon the appointment of the Corporation under section 202, the Corporation shall act as the receiver for the covered financial company, with all of the rights and obligations set forth in this title.

(c)

Consultation

The Corporation, as receiver—

(1)

shall consult with the primary financial regulatory agency or agencies of the covered financial company and its covered subsidiaries for purposes of ensuring an orderly liquidation of the covered financial company;

(2)

may consult with, or under subsection (a)(1)(B)(v) or (a)(1)(L) of section 210, acquire the services of, any outside experts, as appropriate to inform and aid the Corporation in the orderly liquidation process;

(3)

shall consult with the primary financial regulatory agency or agencies of any subsidiaries of the covered financial company that are not covered subsidiaries, and coordinate with such regulators regarding the treatment of such solvent subsidiaries and the separate resolution of any such insolvent subsidiaries under other governmental authority, as appropriate; and

(4)

shall consult with the Commission and the Securities Investor Protection Corporation in the case of any covered financial company for which the Corporation has been appointed as receiver that is a broker or dealer registered with the Commission under section 15(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)) and is a member of the Securities Investor Protection Corporation, for the purpose of determining whether to transfer to a bridge financial company organized by the Corporation as receiver, without consent of any customer, customer accounts of the covered financial company.

(d)

Funding for orderly liquidation

Upon its appointment as receiver for a covered financial company, and thereafter as the Corporation may, in its discretion, determine to be necessary or appropriate, the Corporation may make available to the receivership, subject to the conditions set forth in section 206 and subject to the plan described in section 210(n)(9), funds for the orderly liquidation of the covered financial company. 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.

205.

Orderly liquidation of covered brokers and dealers

(a)

Appointment of SIPC as trustee

(1)

Appointment

Upon the appointment of the Corporation as receiver for any covered broker or dealer, the Corporation shall appoint, without any need for court approval, the Securities Investor Protection Corporation to act as trustee for the liquidation under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) of the covered broker or dealer.

(2)

Actions by SIPC

(A)

Filing

Upon appointment of SIPC under paragraph (1), SIPC shall promptly file with any Federal district court of competent jurisdiction specified in section 21 or 27 of the Securities Exchange Act of 1934 (15 U.S.C. 78u, 78aa), an application for a protective decree under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) as to the covered broker or dealer. The Federal district court shall accept and approve the filing, including outside of normal business hours, and shall immediately issue the protective decree as to the covered broker or dealer.

(B)

Administration by SIPC

Following entry of the protective decree, and except as otherwise provided in this section, the determination of claims and the liquidation of assets retained in the receivership of the covered broker or dealer and not transferred to the bridge financial company shall be administered under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) by SIPC, as trustee for the covered broker or dealer.

(C)

Definition of filing date

For purposes of the liquidation proceeding, the term filing date means the date on which the Corporation is appointed as receiver of the covered broker or dealer.

(D)

Determination of claims

As trustee for the covered broker or dealer, SIPC shall determine and satisfy, consistent with this title and with the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), all claims against the covered broker or dealer arising on or before the filing date.

(b)

Powers and duties of SIPC

(1)

In general

Except as provided in this section, upon its appointment as trustee for the liquidation of a covered broker or dealer, SIPC shall have all of the powers and duties provided by the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), including, without limitation, all rights of action against third parties, and shall conduct such liquidation in accordance with the terms of the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), except that SIPC shall have no powers or duties with respect to assets and liabilities transferred by the Corporation from the covered broker or dealer to any bridge financial company established in accordance with this title.

(2)

Limitation of powers

The exercise by SIPC of powers and functions as trustee under subsection (a) shall not impair or impede the exercise of the powers and duties of the Corporation with regard to—

(A)

any action, except as otherwise provided in this title—

(i)

to make funds available under section 204(d);

(ii)

to organize, establish, operate, or terminate any bridge financial company;

(iii)

to transfer assets and liabilities;

(iv)

to enforce or repudiate contracts; or

(v)

to take any other action relating to such bridge financial company under section 210; or

(B)

determining claims under subsection (e).

(3)

Protective decree

SIPC and the Corporation, in consultation with the Commission, shall jointly determine the terms of the protective decree to be filed by SIPC with any court of competent jurisdiction under section 21 or 27 of the Securities Exchange Act of 1934 (15 U.S.C. 78u, 78aa), as required by subsection (a).

(4)

Qualified financial contracts

Notwithstanding any provision of the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) to the contrary (including section 5(b)(2)(C) of that Act (15 U.S.C. 78eee(b)(2)(C))), the rights and obligations of any party to a qualified financial contract (as that term is defined in section 210(c)(8)) to which a covered broker or dealer for which the Corporation has been appointed receiver is a party shall be governed exclusively by section 210, including the limitations and restrictions contained in section 210(c)(10)(B).

(c)

Limitation on court action

Except as otherwise provided in this title, no court may take any action, including any action pursuant to the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) or the Bankruptcy Code, to restrain or affect the exercise of powers or functions of the Corporation as receiver for a covered broker or dealer and any claims against the Corporation as such receiver shall be determined in accordance with subsection (e) and such claims shall be limited to money damages.

(d)

Actions by corporation as receiver

(1)

In general

Notwithstanding any other provision of this title, no action taken by the Corporation as receiver with respect to a covered broker or dealer shall—

(A)

adversely affect the rights of a customer to customer property or customer name securities;

(B)

diminish the amount or timely payment of net equity claims of customers; or

(C)

otherwise impair the recoveries provided to a customer under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.).

(2)

Net proceeds

The net proceeds from any transfer, sale, or disposition of assets of the covered broker or dealer, or proceeds thereof by the Corporation as receiver for the covered broker or dealer shall be for the benefit of the estate of the covered broker or dealer, as provided in this title.

(e)

Claims against the corporation as receiver

Any claim against the Corporation as receiver for a covered broker or dealer for assets transferred to a bridge financial company established with respect to such covered broker or dealer—

(1)

shall be determined in accordance with section 210(a)(2); and

(2)

may be reviewed by the appropriate district or territorial court of the United States in accordance with section 210(a)(5).

(f)

Satisfaction of customer claims

(1)

Obligations to customers

Notwithstanding any other provision of this title, all obligations of a covered broker or dealer or of any bridge financial company established with respect to such covered broker or dealer to a customer relating to, or net equity claims based upon, customer property or customer name securities shall be promptly discharged by SIPC, the Corporation, or the bridge financial company, as applicable, by the delivery of securities or the making of payments to or for the account of such customer, in a manner and in an amount at least as beneficial to the customer as would have been the case had the actual proceeds realized from the liquidation of the covered broker or dealer under this title been distributed in a proceeding under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) without the appointment of the Corporation as receiver and without any transfer of assets or liabilities to a bridge financial company, and with a filing date as of the date on which the Corporation is appointed as receiver.

(2)

Satisfaction of claims by SIPC

SIPC, as trustee for a covered broker or dealer, shall satisfy customer claims in the manner and amount provided under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), as if the appointment of the Corporation as receiver had not occurred, and with a filing date as of the date on which the Corporation is appointed as receiver. The Corporation shall satisfy customer claims, to the extent that a customer would have received more securities or cash with respect to the allocation of customer property had the covered financial company been subject to a proceeding under the Securities Investor Protection Act (15 U.S.C. 78aaa et seq.) without the appointment of the Corporation as receiver, and with a filing date as of the date on which the Corporation is appointed as receiver.

(g)

Priorities

(1)

Customer property

As trustee for a covered broker or dealer, SIPC shall allocate customer property and deliver customer name securities in accordance with section 8(c) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78fff–2(c)).

(2)

Other claims

All claims other than those described in paragraph (1) (including any unpaid claim by a customer for the allowed net equity claim of such customer from customer property) shall be paid in accordance with the priorities in section 210(b).

(h)

Rulemaking

The Commission and the Corporation, after consultation with SIPC, shall jointly issue rules to implement this section.

206.

Mandatory terms and conditions for all orderly liquidation actions

In taking action under this title, the Corporation shall—

(1)

determine that such action is necessary for purposes of the financial stability of the United States, and not for the purpose of preserving the covered financial company;

(2)

ensure that the shareholders of a covered financial company do not receive payment until after all other claims and the Fund are fully paid;

(3)

ensure that unsecured creditors bear losses in accordance with the priority of claim provisions in section 210;

(4)

ensure that management responsible for the failed condition of the covered financial company is removed (if such management has not already been removed at the time at which the Corporation is appointed receiver);

(5)

ensure that the members of the board of directors (or body performing similar functions) responsible for the failed condition of the covered financial company are removed, if such members have not already been removed at the time the Corporation is appointed as receiver; and

(6)

not take an equity interest in or become a shareholder of any covered financial company or any covered subsidiary.

207.

Directors not liable for acquiescing in appointment of receiver

The members of the board of directors (or body performing similar functions) of a covered financial company shall not be liable to the shareholders or creditors thereof for acquiescing in or consenting in good faith to the appointment of the Corporation as receiver for the covered financial company under section 203.

208.

Dismissal and exclusion of other actions

(a)

In general

Effective as of the date of the appointment of the Corporation as receiver for the covered financial company under section 202 or the appointment of SIPC as trustee for a covered broker or dealer under section 205, as applicable, any case or proceeding commenced with respect to the covered financial company under the Bankruptcy Code or the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) shall be dismissed, upon notice to the bankruptcy court (with respect to a case commenced under the Bankruptcy Code), and upon notice to SIPC (with respect to a covered broker or dealer) and no such case or proceeding may be commenced with respect to a covered financial company at any time while the orderly liquidation is pending.

(b)

Revesting of assets

Effective as of the date of appointment of the Corporation as receiver, the assets of a covered financial company shall, to the extent they have vested in any entity other than the covered financial company as a result of any case or proceeding commenced with respect to the covered financial company under the Bankruptcy Code, the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), or any similar provision of State liquidation or insolvency law applicable to the covered financial company, revest in the covered financial company.

(c)

Limitation

Notwithstanding subsections (a) and (b), any order entered or other relief granted by a bankruptcy court prior to the date of appointment of the Corporation as receiver shall continue with the same validity as if an orderly liquidation had not been commenced.

209.

Rulemaking; non-conflicting law

The Corporation shall, in consultation with the Council, prescribe such rules or regulations as the Corporation considers necessary or appropriate to implement this title, including rules and regulations with respect to the rights, interests, and priorities of creditors, counterparties, security entitlement holders, or other persons with respect to any covered financial company or any assets or other property of or held by such covered financial company, and address the potential for conflicts of interest between or among individual receiverships established under this title or under the Federal Deposit Insurance Act. To the extent possible, the Corporation shall seek to harmonize applicable rules and regulations promulgated under this section with the insolvency laws that would otherwise apply to a covered financial company.

210.

Powers and duties of the Corporation

(a)

Powers and authorities

(1)

General powers

(A)

Successor to covered financial company

The Corporation shall, upon appointment as receiver for a covered financial company under this title, succeed to—

(i)

all rights, titles, powers, and privileges of the covered financial company and its assets, and of any stockholder, member, officer, or director of such company; and

(ii)

title to the books, records, and assets of any previous receiver or other legal custodian of such covered financial company.

(B)

Operation of the covered financial company during the period of orderly liquidation

The Corporation, as receiver for a covered financial company, may—

(i)

take over the assets of and operate the covered financial company with all of the powers of the members or shareholders, the directors, and the officers of the covered financial company, and conduct all business of the covered financial company;

(ii)

collect all obligations and money owed to the covered financial company;

(iii)

perform all functions of the covered financial company, in the name of the covered financial company;

(iv)

manage the assets and property of the covered financial company, consistent with maximization of the value of the assets in the context of the orderly liquidation; and

(v)

provide by contract for assistance in fulfilling any function, activity, action, or duty of the Corporation as receiver.

(C)

Functions of covered financial company officers, directors, and shareholders

The Corporation may provide for the exercise of any function by any member or stockholder, director, or officer of any covered financial company for which the Corporation has been appointed as receiver under this title.

(D)

Additional powers as receiver

The Corporation shall, as receiver for a covered financial company, and subject to all legally enforceable and perfected security interests and all legally enforceable security entitlements in respect of assets held by the covered financial company, liquidate, and wind-up the affairs of a covered financial company, including taking steps to realize upon the assets of the covered financial company, in such manner as the Corporation deems appropriate, including through the sale of assets, the transfer of assets to a bridge financial company established under subsection (h), or the exercise of any other rights or privileges granted to the receiver under this section.

(E)

Additional powers with respect to failing subsidiaries of a covered financial company

(i)

In general

In any case in which a receiver is appointed for a covered financial company under section 202, the Corporation may appoint itself as receiver of any covered subsidiary of the covered financial company that is organized under Federal law or the laws of any State, if the Corporation and the Secretary jointly determine that—

(I)

the covered subsidiary is in default or in danger of default;

(II)

such action would avoid or mitigate serious adverse effects on the financial stability or economic conditions of the United States; and

(III)

such action would facilitate the orderly liquidation of the covered financial company.

(ii)

Treatment as covered financial company

If the Corporation is appointed as receiver of a covered subsidiary of a covered financial company under clause (i), the covered subsidiary shall thereafter be considered a covered financial company under this title, and the Corporation shall thereafter have all the powers and rights with respect to that covered subsidiary as it has with respect to a covered financial company under this title.

(F)

Organization of bridge companies

The Corporation, as receiver for a covered financial company, may organize a bridge financial company under subsection (h).

(G)

Merger; transfer of assets and liabilities

(i)

In general

Subject to clauses (ii) and (iii), the Corporation, as receiver for a covered financial company, may—

(I)

merge the covered financial company with another company; or

(II)

transfer any asset or liability of the covered financial company (including any assets and liabilities held by the covered financial company for security entitlement holders, any customer property, or any assets and liabilities associated with any trust or custody business) without obtaining any approval, assignment, or consent with respect to such transfer.

(ii)

Federal agency approval; antitrust review

With respect to a transaction described in clause (i)(I) that requires approval by a Federal agency—

(I)

the transaction may not be consummated before the 5th calendar day after the date of approval by the Federal agency responsible for such approval;

(II)

if, in connection with any such approval, a report on competitive factors is required, the Federal agency responsible for such approval shall promptly notify the Attorney General of the United States of the proposed transaction, and the Attorney General shall provide the required report not later than 10 days after the date of the request; and

(III)

if notification under section 7A of the Clayton Act is required with respect to such transaction, then the required waiting period shall end on the 15th day after the date on which the Attorney General and the Federal Trade Commission receive such notification, unless the waiting period is terminated earlier under subsection (b)(2) of such section 7A, or is extended pursuant to subsection (e)(2) of such section 7A.

(iii)

Setoff

Subject to the other provisions of this title, any transferee of assets from a receiver, including a bridge financial company, shall be subject to such claims or rights as would prevail over the rights of such transferee in such assets under applicable noninsolvency law.

(H)

Payment of valid obligations

The Corporation, as receiver for a covered financial company, shall, to the extent that funds are available, pay all valid obligations of the covered financial company that are due and payable at the time of the appointment of the Corporation as receiver, in accordance with the prescriptions and limitations of this title.

(I)

Applicable noninsolvency law

Except as may otherwise be provided in this title, the applicable noninsolvency law shall be determined by the noninsolvency choice of law rules otherwise applicable to the claims, rights, titles, persons, or entities at issue.

(J)

Subpoena authority

(i)

In general

The Corporation, as receiver for a covered financial company, may, for purposes of carrying out any power, authority, or duty with respect to the covered financial company (including determining any claim against the covered financial company and determining and realizing upon any asset of any person in the course of collecting money due the covered financial company), exercise any power established under section 8(n) of the Federal Deposit Insurance Act, as if the Corporation were the appropriate Federal banking agency for the covered financial company, and the covered financial company were an insured depository institution.

(ii)

Rule of construction

This subparagraph may not be construed as limiting any rights that the Corporation, in any capacity, might otherwise have to exercise any powers described in clause (i) or under any other provision of law.

(K)

Incidental powers

The Corporation, as receiver for a covered financial company, may exercise all powers and authorities specifically granted to receivers under this title, and such incidental powers as shall be necessary to carry out such powers under this title.

(L)

Utilization of private sector

In carrying out its responsibilities in the management and disposition of assets from the covered financial company, the Corporation, as receiver for a covered financial company, may utilize the services of private persons, including real estate and loan portfolio asset management, property management, auction marketing, legal, and brokerage services, if such services are available in the private sector, and the Corporation determines that utilization of such services is practicable, efficient, and cost effective.

(M)

Shareholders and creditors of covered financial company

Notwithstanding any other provision of law, the Corporation, as receiver for a covered financial company, shall succeed by operation of law to the rights, titles, powers, and privileges described in subparagraph (A), and shall terminate all rights and claims that the stockholders and creditors of the covered financial company may have against the assets of the covered financial company or the Corporation arising out of their status as stockholders or creditors, except for their right to payment, resolution, or other satisfaction of their claims, as permitted under this section. The Corporation shall ensure that shareholders and unsecured creditors bear losses, consistent with the priority of claims provisions under this section.

(N)

Coordination with foreign financial authorities

The Corporation, as receiver for a covered financial company, shall coordinate, to the maximum extent possible, with the appropriate foreign financial authorities regarding the orderly liquidation of any covered financial company that has assets or operations in a country other than the United States.

(O)

Restriction on transfers

(i)

Selection of accounts for transfer

If the Corporation establishes one or more bridge financial companies with respect to a covered broker or dealer, the Corporation shall transfer to one of such bridge financial companies, all customer accounts of the covered broker or dealer, and all associated customer name securities and customer property, unless the Corporation, after consulting with the Commission and SIPC, determines that—

(I)

the customer accounts, customer name securities, and customer property are likely to be promptly transferred to another broker or dealer that is registered with the Commission under section 15(b) of the Securities Exchange Act of 1934 (15 U.S.C. 73o(b)) and is a member of SIPC; or

(II)

the transfer of the accounts to a bridge financial company would materially interfere with the ability of the Corporation to avoid or mitigate serious adverse effects on financial stability or economic conditions in the United States.

(ii)

Transfer of property

SIPC, as trustee for the liquidation of the covered broker or dealer, and the Commission shall provide any and all reasonable assistance necessary to complete such transfers by the Corporation.

(iii)

Customer consent and court approval not required

Neither customer consent nor court approval shall be required to transfer any customer accounts or associated customer name securities or customer property to a bridge financial company in accordance with this section.

(iv)

Notification of sipc and sharing of information

The Corporation shall identify to SIPC the customer accounts and associated customer name securities and customer property transferred to the bridge financial company. The Corporation and SIPC shall cooperate in the sharing of any information necessary for each entity to discharge its obligations under this title and under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) including by providing access to the books and records of the covered financial company and any bridge financial company established in accordance with this title.

(2)

Determination of claims

(A)

In general

The Corporation, as receiver for a covered financial company, shall report on claims, as set forth in section 203(c)(3). Subject to paragraph (4) of this subsection, the Corporation, as receiver for a covered financial company, shall determine claims in accordance with the requirements of this subsection and regulations prescribed under section 209.

(B)

Notice requirements

The Corporation, as receiver for a covered financial company, in any case involving the liquidation or winding up of the affairs of a covered financial company, shall—

(i)

promptly publish a notice to the creditors of the covered financial company to present their claims, together with proof, to the receiver by a date specified in the notice, which shall be not earlier than 90 days after the date of publication of such notice; and

(ii)

republish such notice 1 month and 2 months, respectively, after the date of publication under clause (i).

(C)

Mailing required

The Corporation as receiver shall mail a notice similar to the notice published under clause (i) or (ii) of subparagraph (B), at the time of such publication, to any creditor shown on the books and records of the covered financial company—

(i)

at the last address of the creditor appearing in such books;

(ii)

in any claim filed by the claimant; or

(iii)

upon discovery of the name and address of a claimant not appearing on the books and records of the covered financial company, not later than 30 days after the date of the discovery of such name and address.

(3)

Procedures for resolution of claims

(A)

Decision period

(i)

In general

Prior to the 180th day after the date on which a claim against a covered financial company is filed with the Corporation as receiver, or such later date as may be agreed as provided in clause (ii), the Corporation shall notify the claimant whether it allows or disallows the claim, in accordance with subparagraphs (B), (C), and (D).

(ii)

Extension of time

By written agreement executed not later than 180 days after the date on which a claim against a covered financial company is filed with the Corporation, the period described in clause (i) may be extended by written agreement between the claimant and the Corporation. Failure to notify the claimant of any disallowance within the time period set forth in clause (i), as it may be extended by agreement under this clause, shall be deemed to be a disallowance of such claim, and the claimant may file or continue an action in court, as provided in paragraph (4).

(iii)

Mailing of notice sufficient

The requirements of clause (i) shall be deemed to be satisfied if the notice of any decision with respect to any claim is mailed to the last address of the claimant which appears—

(I)

on the books, records, or both of the covered financial company;

(II)

in the claim filed by the claimant; or

(III)

in documents submitted in proof of the claim.

(iv)

Contents of notice of disallowance

If the Corporation as receiver disallows any claim filed under clause (i), the notice to the claimant shall contain—

(I)

a statement of each reason for the disallowance; and

(II)

the procedures required to file or continue an action in court, as provided in paragraph (4).

(B)

Allowance of proven claim

The receiver shall allow any claim received by the receiver on or before the date specified in the notice under paragraph (2)(B)(i), which is proved to the satisfaction of the receiver.

(C)

Disallowance of claims filed after end of filing period

(i)

In general

Except as provided in clause (ii), claims filed after the date specified in the notice published under paragraph (2)(B)(i) shall be disallowed, and such disallowance shall be final.

(ii)

Certain exceptions

Clause (i) shall not apply with respect to any claim filed by a claimant after the date specified in the notice published under paragraph (2)(B)(i), and such claim may be considered by the receiver under subparagraph (B), if—

(I)

the claimant did not receive notice of the appointment of the receiver in time to file such claim before such date; and

(II)

such claim is filed in time to permit payment of such claim.

(D)

Authority to disallow claims

(i)

In general

The Corporation may disallow any portion of any claim by a creditor or claim of a security, preference, setoff, or priority which is not proved to the satisfaction of the Corporation.

(ii)

Payments to undersecured creditors

In the case of a claim against a covered financial company that is secured by any property or other asset of such covered financial company, the receiver—

(I)

may treat the portion of such claim which exceeds an amount equal to the fair market value of such property or other asset as an unsecured claim; and

(II)

may not make any payment with respect to such unsecured portion of the claim, other than in connection with the disposition of all claims of unsecured creditors of the covered financial company.

(iii)

Exceptions

No provision of this paragraph shall apply with respect to—

(I)

any extension of credit from any Federal reserve bank, or the Corporation, to any covered financial company; or

(II)

subject to clause (ii), any legally enforceable and perfected security interest in the assets of the covered financial company securing any such extension of credit.

(E)

Legal effect of filing

(i)

Statute of limitations tolled

For purposes of any applicable statute of limitations, the filing of a claim with the receiver shall constitute a commencement of an action.

(ii)

No prejudice to other actions

Subject to paragraph (8), the filing of a claim with the receiver shall not prejudice any right of the claimant to continue any action which was filed before the date of appointment of the receiver for the covered financial company.

(4)

Judicial determination of claims

(A)

In general

Subject to subparagraph (B), a claimant may file suit on a claim (or continue an action commenced before the date of appointment of the Corporation as receiver) in the district or territorial court of the United States for the district within which the principal place of business of the covered financial company is located (and such court shall have jurisdiction to hear such claim).

(B)

Timing

A claim under subparagraph (A) may be filed before the end of the 60-day period beginning on the earlier of—

(i)

the end of the period described in paragraph (3)(A)(i) (or, if extended by agreement of the Corporation and the claimant, the period described in paragraph (3)(A)(ii)) with respect to any claim against a covered financial company for which the Corporation is receiver; or

(ii)

the date of any notice of disallowance of such claim pursuant to paragraph (3)(A)(i).

(C)

Statute of limitations

If any claimant fails to file suit on such claim (or to continue an action on such claim commenced before the date of appointment of the Corporation as receiver) prior to the end of the 60-day period described in subparagraph (B), the claim shall be deemed to be disallowed (other than any portion of such claim which was allowed by the receiver) as of the end of such period, such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such claim.

(5)

Expedited determination of claims

(A)

Procedure required

The Corporation shall establish a procedure for expedited relief outside of the claims process established under paragraph (3), for any claimant that alleges—

(i)

having a legally valid and enforceable or perfected security interest in property of a covered financial company or control of any legally valid and enforceable security entitlement in respect of any asset held by the covered financial company for which the Corporation has been appointed receiver; and

(ii)

that irreparable injury will occur if the claims procedure established under paragraph (3) is followed.

(B)

Determination period

Prior to the end of the 90-day period beginning on the date on which a claim is filed in accordance with the procedures established pursuant to subparagraph (A), the Corporation shall—

(i)

determine—

(I)

whether to allow or disallow such claim, or any portion thereof; or

(II)

whether such claim should be determined pursuant to the procedures established pursuant to paragraph (3);

(ii)

notify the claimant of the determination; and

(iii)

if the claim is disallowed, provide a statement of each reason for the disallowance and the procedure for obtaining a judicial determination.

(C)

Period for filing or renewing suit

Any claimant who files a request for expedited relief shall be permitted to file suit (or continue a suit filed before the date of appointment of the Corporation as receiver seeking a determination of the rights of the claimant with respect to such security interest (or such security entitlement) after the earlier of—

(i)

the end of the 90-day period beginning on the date of the filing of a request for expedited relief; or

(ii)

the date on which the Corporation denies the claim or a portion thereof.

(D)

Statute of limitations

If an action described in subparagraph (C) is not filed, or the motion to renew a previously filed suit is not made, before the end of the 30-day period beginning on the date on which such action or motion may be filed in accordance with subparagraph (C), the claim shall be deemed to be disallowed as of the end of such period (other than any portion of such claim which was allowed by the receiver), such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such claim.

(E)

Legal effect of filing

(i)

Statute of limitations tolled

For purposes of any applicable statute of limitations, the filing of a claim with the receiver shall constitute a commencement of an action.

(ii)

No prejudice to other actions

Subject to paragraph (8), the filing of a claim with the receiver shall not prejudice any right of the claimant to continue any action which was filed before the appointment of the Corporation as receiver for the covered financial company.

(6)

Agreements against interest of the receiver

No agreement that tends to diminish or defeat the interest of the Corporation as receiver in any asset acquired by the receiver under this section shall be valid against the receiver, unless such agreement—

(A)

is in writing;

(B)

was executed by an authorized officer or representative of the covered financial company, or confirmed in the ordinary course of business by the covered financial company; and

(C)

has been, since the time of its execution, an official record of the company or the party claiming under the agreement provides documentation, acceptable to the receiver, of such agreement and its authorized execution or confirmation by the covered financial company.

(7)

Payment of claims

(A)

In general

Subject to subparagraph (B), the Corporation as receiver may, in its discretion and to the extent that funds are available, pay creditor claims, in such manner and amounts as are authorized under this section, which are—

(i)

allowed by the receiver;

(ii)

approved by the receiver pursuant to a final determination pursuant to paragraph (3) or (5), as applicable; or

(iii)

determined by the final judgment of a court of competent jurisdiction.

(B)

Limitation

A creditor shall, in no event, receive less than the amount that the creditor is entitled to receive under paragraphs (2) and (3) of subsection (d), as applicable.

(C)

Payment of dividends on claims

The Corporation as receiver may, in its sole discretion, and to the extent otherwise permitted by this section, pay dividends on proven claims at any time, and no liability shall attach to the Corporation as receiver, by reason of any such payment or for failure to pay dividends to a claimant whose claim is not proved at the time of any such payment.

(D)

Rulemaking by the corporation

The Corporation may prescribe such rules, including definitions of terms, as the Corporation deems appropriate to establish an interest rate for or to make payments of post-insolvency interest to creditors holding proven claims against the receivership estate of a covered financial company, except that no such interest shall be paid until the Corporation as receiver has satisfied the principal amount of all creditor claims.

(8)

Suspension of legal actions

(A)

In general

After the appointment of the Corporation as receiver for a covered financial company, the Corporation may request a stay in any judicial action or proceeding in which such covered financial company is or becomes a party, for a period of not to exceed 90 days.

(B)

Grant of stay by all courts required

Upon receipt of a request by the Corporation pursuant to subparagraph (A), the court shall grant such stay as to all parties.

(9)

Additional rights and duties

(A)

Prior final adjudication

The Corporation shall abide by any final, non-appealable judgment of any court of competent jurisdiction that was rendered before the appointment of the Corporation as receiver.

(B)

Rights and remedies of receiver

In the event of any appealable judgment, the Corporation as receiver shall—

(i)

have all the rights and remedies available to the covered financial company (before the date of appointment of the Corporation as receiver under section 202) and the Corporation, including removal to Federal court and all appellate rights; and

(ii)

not be required to post any bond in order to pursue such remedies.

(C)

No attachment or execution

No attachment or execution may be issued by any court upon assets in the possession of the Corporation as receiver for a covered financial company.

(D)

Limitation on judicial review

Except as otherwise provided in this title, no court shall have jurisdiction over—

(i)

any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets of any covered financial company for which the Corporation has been appointed receiver, including any assets which the Corporation may acquire from itself as such receiver; or

(ii)

any claim relating to any act or omission of such covered financial company or the Corporation as receiver.

(E)

Disposition of assets

In exercising any right, power, privilege, or authority as receiver in connection with any covered financial company for which the Corporation is acting as receiver under this section, the Corporation shall, to the greatest extent practicable, conduct its operations in a manner that—

(i)

maximizes the net present value return from the sale or disposition of such assets;

(ii)

minimizes the amount of any loss realized in the resolution of cases;

(iii)

mitigates the potential for serious adverse effects to the financial system;

(iv)

ensures timely and adequate competition and fair and consistent treatment of offerors; and

(v)

prohibits discrimination on the basis of race, sex, or ethnic group in the solicitation and consideration of offers.

(10)

Statute of limitations for actions brought by receiver

(A)

In general

Notwithstanding any provision of any contract, the applicable statute of limitations with regard to any action brought by the Corporation as receiver for a covered financial company shall be—

(i)

in the case of any contract claim, the longer of—

(I)

the 6-year period beginning on the date on which the claim accrues; or

(II)

the period applicable under State law; and

(ii)

in the case of any tort claim, the longer of—

(I)

the 3-year period beginning on the date on which the claim accrues; or

(II)

the period applicable under State law.

(B)

Date on which a claim accrues

For purposes of subparagraph (A), the date on which the statute of limitations begins to run on any claim described in subparagraph (A) shall be the later of—

(i)

the date of the appointment of the Corporation as receiver under this title; or

(ii)

the date on which the cause of action accrues.

(C)

Revival of expired State causes of action

(i)

In general

In the case of any tort claim described in clause (ii) for which the applicable statute of limitations under State law has expired not more than 5 years before the date of appointment of the Corporation as receiver for a covered financial company, the Corporation may bring an action as receiver on such claim without regard to the expiration of the statute of limitations.

(ii)

Claims described

A tort claim referred to in clause (i) is a claim arising from fraud, intentional misconduct resulting in unjust enrichment, or intentional misconduct resulting in substantial loss to the covered financial company.

(11)

Avoidable transfers

(A)

Fraudulent transfers

The Corporation, as receiver for any covered financial company, may avoid a transfer of any interest of the covered financial company in property, or any obligation incurred by the covered financial company, that was made or incurred at or within 2 years before the date on which the Corporation was appointed receiver, if—

(i)

the covered financial company voluntarily or involuntarily—

(I)

made such transfer or incurred such obligation with actual intent to hinder, delay, or defraud any entity to which the covered financial company was or became, on or after the date on which such transfer was made or such obligation was incurred, indebted; or

(II)

received less than a reasonably equivalent value in exchange for such transferor obligation; and

(ii)

the covered financial company voluntarily or involuntarily—

(I)

was insolvent on the date that such transfer was made or such obligation was incurred, or became insolvent as a result of such transfer or obligation;

(II)

was engaged in business or a transaction, or was about to engage in business or a transaction, for which any property remaining with the covered financial company was an unreasonably small capital;

(III)

intended to incur, or believed that the covered financial company would incur, debts that would be beyond the ability of the covered financial company to pay as such debts matured; or

(IV)

made such transfer to or for the benefit of an insider, or incurred such obligation to or for the benefit of an insider, under an employment contract and not in the ordinary course of business.

(B)

Preferential transfers

The Corporation as receiver for any covered financial company may avoid a transfer of an interest of the covered financial company in property—

(i)

to or for the benefit of a creditor;

(ii)

for or on account of an antecedent debt that was owed by the covered financial company before the transfer was made;

(iii)

that was made while the covered financial company was insolvent;

(iv)

that was made—

(I)

90 days or less before the date on which the Corporation was appointed receiver; or

(II)

more than 90 days, but less than 1 year before the date on which the Corporation was appointed receiver, if such creditor at the time of the transfer was an insider; and

(v)

that enables the creditor to receive more than the creditor would receive if—

(I)

the covered financial company had been liquidated under chapter 7 of the Bankruptcy Code;

(II)

the transfer had not been made; and

(III)

the creditor received payment of such debt to the extent provided by the provisions of chapter 7 of the Bankruptcy Code.

(C)

Post-receivership transactions

The Corporation as receiver for any covered financial company may avoid a transfer of property of the receivership that occurred after the Corporation was appointed receiver that was not authorized under this title by the Corporation as receiver.

(D)

Right of recovery

To the extent that a transfer is avoided under subparagraph (A), (B), or (C), the Corporation may recover, for the benefit of the covered financial company, the property transferred or, if a court so orders, the value of such property (at the time of such transfer) from—

(i)

the initial transferee of such transfer or the person for whose benefit such transfer was made; or

(ii)

any immediate or mediate transferee of any such initial transferee.

(E)

Rights of transferee or obligee

The Corporation may not recover under subparagraph (D)(ii) from—

(i)

any transferee that takes for value, including in satisfaction of or to secure a present or antecedent debt, in good faith, and without knowledge of the voidability of the transfer avoided; or

(ii)

any immediate or mediate good faith transferee of such transferee.

(F)

Defenses

Subject to the other provisions of this title—

(i)

a transferee or obligee from which the Corporation seeks to recover a transfer or to avoid an obligation under subparagraph (A), (B), (C), or (D) shall have the same defenses available to a transferee or obligee from which a trustee seeks to recover a transfer or avoid an obligation under sections 547, 548, and 549 of the Bankruptcy Code; and

(ii)

the authority of the Corporation to recover a transfer or avoid an obligation shall be subject to subsections (b) and (c) of section 546, section 547(c), and section 548(c) of the Bankruptcy Code.

(G)

Rights under this section

The rights of the Corporation as receiver under this section shall be superior to any rights of a trustee or any other party (other than a Federal agency) under the Bankruptcy Code.

(H)

Rules of construction; definitions

For purposes of—

(i)

subparagraphs (A) and (B)—

(I)

the term insider has the same meaning as in section 101(31) of the Bankruptcy Code;

(II)

a transfer is made when such transfer is so perfected that a bona fide purchaser from the covered financial company against whom applicable law permits such transfer to be perfected cannot acquire an interest in the property transferred that is superior to the interest in such property of the transferee, but if such transfer is not so perfected before the date on which the Corporation is appointed as receiver for the covered financial company, such transfer is made immediately before the date of such appointment; and

(III)

the term value means property, or satisfaction or securing of a present or antecedent debt of the covered financial company, but does not include an unperformed promise to furnish support to the covered financial company; and

(ii)

subparagraph (B)—

(I)

the covered financial company is presumed to have been insolvent on and during the 90-day period immediately preceding the date of appointment of the Corporation as receiver; and

(II)

the term insolvent has the same meaning as in section 101(32) of the Bankruptcy Code.

(12)

Setoff

(A)

Generally

Except as otherwise provided in this title, any right of a creditor to offset a mutual debt owed by the creditor to any covered financial company that arose before the Corporation was appointed as receiver for the covered financial company against a claim of such creditor may be asserted if enforceable under applicable noninsolvency law, except to the extent that—

(i)

the claim of the creditor against the covered financial company is disallowed;

(ii)

the claim was transferred, by an entity other than the covered financial company, to the creditor—

(I)

after the Corporation was appointed as receiver of the covered financial company; or

(II)
(aa)

after the 90-day period preceding the date on which the Corporation was appointed as receiver for the covered financial company; and

(bb)

while the covered financial company was insolvent (except for a setoff in connection with a qualified financial contract); or

(iii)

the debt owed to the covered financial company was incurred by the covered financial company—

(I)

after the 90-day period preceding the date on which the Corporation was appointed as receiver for the covered financial company;

(II)

while the covered financial company was insolvent; and

(III)

for the purpose of obtaining a right of setoff against the covered financial company (except for a setoff in connection with a qualified financial contract).

(B)

Insufficiency

(i)

In general

Except with respect to a setoff in connection with a qualified financial contract, if a creditor offsets a mutual debt owed to the covered financial company against a claim of the covered financial company on or within the 90-day period preceding the date on which the Corporation is appointed as receiver for the covered financial company, the Corporation may recover from the creditor the amount so offset, to the extent that any insufficiency on the date of such setoff is less than the insufficiency on the later of—

(I)

the date that is 90 days before the date on which the Corporation is appointed as receiver for the covered financial company; or

(II)

the first day on which there is an insufficiency during the 90-day period preceding the date on which the Corporation is appointed as receiver for the covered financial company.

(ii)

Definition of insufficiency

In this subparagraph, the term insufficiency means the amount, if any, by which a claim against the covered financial company exceeds a mutual debt owed to the covered financial company by the holder of such claim.

(C)

Insolvency

The term insolvent has the same meaning as in section 101(32) of the Bankruptcy Code.

(D)

Presumption of insolvency

For purposes of this paragraph, the covered financial company is presumed to have been insolvent on and during the 90-day period preceding the date of appointment of the Corporation as receiver.

(E)

Limitation

Nothing in this paragraph (12) shall be the basis for any right of setoff where no such right exists under applicable noninsolvency law.

(F)

Priority claim

Except as otherwise provided in this title, the Corporation as receiver for the covered financial company may sell or transfer any assets free and clear of the setoff rights of any party, except that such party shall be entitled to a claim, subordinate to the claims payable under subparagraphs (A), (B), (C), and (D) of subsection (b)(1), but senior to all other unsecured liabilities defined in subsection (b)(1)(E), in an amount equal to the value of such setoff rights.

(13)

Attachment of assets and other injunctive relief

Subject to paragraph (14), any court of competent jurisdiction may, at the request of the Corporation as receiver for a covered financial company, issue an order in accordance with Rule 65 of the Federal Rules of Civil Procedure, including an order placing the assets of any person designated by the Corporation under the control of the court and appointing a trustee to hold such assets.

(14)

Standards

(A)

Showing

Rule 65 of the Federal Rules of Civil Procedure shall apply with respect to any proceeding under paragraph (13), without regard to the requirement that the applicant show that the injury, loss, or damage is irreparable and immediate.

(B)

State proceeding

If, in the case of any proceeding in a State court, the court determines that rules of civil procedure available under the laws of the State provide substantially similar protections of the right of the parties to due process as provided under Rule 65 (as modified with respect to such proceeding by subparagraph (A)), the relief sought by the Corporation pursuant to paragraph (14) may be requested under the laws of such State.

(15)

Treatment of claims arising from breach of contracts executed by the corporation as receiver

Notwithstanding any other provision of this title, any final and non-appealable judgment for monetary damages entered against the Corporation as receiver for a covered financial company for the breach of an agreement executed or approved by the Corporation after the date of its appointment shall be paid as an administrative expense of the receiver. Nothing in this paragraph shall be construed to limit the power of a receiver to exercise any rights under contract or law, including to terminate, breach, cancel, or otherwise discontinue such agreement.

(16)

Accounting and recordkeeping requirements

(A)

In general

The Corporation as receiver for a covered financial company shall, consistent with the accounting and reporting practices and procedures established by the Corporation, maintain a full accounting of each receivership or other disposition of any covered financial company.

(B)

Annual accounting or report

With respect to each receivership to which the Corporation is appointed, the Corporation shall make an annual accounting or report, as appropriate, available to the Secretary and the Comptroller General of the United States.

(C)

Availability of reports

Any report prepared pursuant to subparagraph (B) and section 203(c)(3) shall be made available to the public by the Corporation.

(D)

Recordkeeping requirement

(i)

In general

The Corporation shall prescribe such regulations and establish such retention schedules as are necessary to maintain the documents and records of the Corporation generated in exercising the authorities of this title and the records of a covered financial company for which the Corporation is appointed receiver, with due regard for—

(I)

the avoidance of duplicative record retention; and

(II)

the expected evidentiary needs of the Corporation as receiver for a covered financial company and the public regarding the records of covered financial companies.

(ii)

Retention of records

Unless otherwise required by applicable Federal law or court order, the Corporation may not, at any time, destroy any records that are subject to clause (i).

(iii)

Records defined

As used in this subparagraph, the terms records and records of a covered financial company mean any document, book, paper, map, photograph, microfiche, microfilm, computer or electronically-created record generated or maintained by the covered financial company in the course of and necessary to its transaction of business.

(b)

Priority of expenses and unsecured claims

(1)

In general

Unsecured claims against a covered financial company, or the Corporation as receiver for such covered financial company under this section, that are proven to the satisfaction of the receiver shall have priority in the following order:

(A)

Administrative expenses of the receiver.

(B)

Any amounts owed to the United States, unless the United States agrees or consents otherwise.

(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.

(E)

Any other general or senior liability of the covered financial company (which is not a liability described under subparagraph (F), (G), or (H)).

(F)

Any obligation subordinated to general creditors (which is not an obligation described under subparagraph (G) or (H)).

(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.

(H)

Any obligation to shareholders, members, general partners, limited partners, or other persons, with interests in the equity of the covered financial company arising as a result of their status as shareholders, members, general partners, limited partners, or other persons with interests in the equity of the covered financial company.

(2)

Post-receivership financing priority

In the event that the Corporation, as receiver for a covered financial company, is unable to obtain unsecured credit for the covered financial company from commercial sources, the Corporation as receiver may obtain credit or incur debt on the part of the covered financial company, which shall have priority over any or all administrative expenses of the receiver under paragraph (1)(A).

(3)

Claims of the United States

Unsecured claims of the United States shall, at a minimum, have a higher priority than liabilities of the covered financial company that count as regulatory capital.

(4)

Creditors similarly situated

All claimants of a covered financial company that are similarly situated under paragraph (1) shall be treated in a similar manner, except that the Corporation may take any action (including making payments, subject to subsection (o)(1)(D)(i)) that does not comply with this subsection, if—

(A)

the Corporation determines that such action is necessary—

(i)

to maximize the value of the assets of the covered financial company;

(ii)

to initiate and continue operations essential to implementation of the receivership or any bridge financial company;

(iii)

to maximize the present value return from the sale or other disposition of the assets of the covered financial company; or

(iv)

to minimize the amount of any loss realized upon the sale or other disposition of the assets of the covered financial company; and

(B)

all claimants that are similarly situated under paragraph (1) receive not less than the amount provided in paragraphs (2) and (3) of subsection (d).

(5)

Secured claims unaffected

This section shall not affect secured claims or security entitlements in respect of assets or property held by the covered financial company, except to the extent that the security is insufficient to satisfy the claim, and then only with regard to the difference between the claim and the amount realized from the security.

(6)

Priority of expenses and unsecured claims in the orderly liquidation of sipc member

Where the Corporation is appointed as receiver for a covered broker or dealer, unsecured claims against such covered broker or dealer, or the Corporation as receiver for such covered broker or dealer under this section, that are proven to the satisfaction of the receiver under section 205(e), shall have the priority prescribed in paragraph (1), except that—

(A)

SIPC shall be entitled to recover administrative expenses incurred in performing its responsibilities under section 205 on an equal basis with the Corporation, in accordance with paragraph (1)(A);

(B)

the Corporation shall be entitled to recover any amounts paid to customers or to SIPC pursuant to section 205(f), in accordance with paragraph (1)(B);

(C)

SIPC shall be entitled to recover any amounts paid out of the SIPC Fund to meet its obligations under section 205 and under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), which claim shall be subordinate to the claims payable under subparagraphs (A) and (B) of paragraph (1), but senior to all other claims; and

(D)

the Corporation may, after paying any proven claims to customers under section 205 and the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), and as provided above, pay dividends on other proven claims, in its discretion, and to the extent that funds are available, in accordance with the priorities set forth in paragraph (1).

(c)

Provisions relating to contracts entered into before appointment of receiver

(1)

Authority to repudiate contracts

In addition to any other rights that a receiver may have, the Corporation as receiver for any covered financial company may disaffirm or repudiate any contract or lease—

(A)

to which the covered financial company is a party;

(B)

the performance of which the Corporation as receiver, in the discretion of the Corporation, determines to be burdensome; and

(C)

the disaffirmance or repudiation of which the Corporation as receiver determines, in the discretion of the Corporation, will promote the orderly administration of the affairs of the covered financial company.

(2)

Timing of repudiation

The Corporation, as receiver for any covered financial company, shall determine whether or not to exercise the rights of repudiation under this section within a reasonable period of time.

(3)

Claims for damages for repudiation

(A)

In general

Except as provided in paragraphs (4), (5), and (6) and in subparagraphs (C), (D), and (E) of this paragraph, the liability of the Corporation as receiver for a covered financial company for the disaffirmance or repudiation of any contract pursuant to paragraph (1) shall be—

(i)

limited to actual direct compensatory damages; and

(ii)

determined as of—

(I)

the date of the appointment of the Corporation as receiver; or

(II)

in the case of any contract or agreement referred to in paragraph (8), the date of the disaffirmance or repudiation of such contract or agreement.

(B)

No liability for other damages

For purposes of subparagraph (A), the term actual direct compensatory damages does not include—

(i)

punitive or exemplary damages;

(ii)

damages for lost profits or opportunity; or

(iii)

damages for pain and suffering.

(C)

Measure of damages for repudiation of qualified financial contracts

In the case of any qualified financial contract or agreement to which paragraph (8) applies, compensatory damages shall be—

(i)

deemed to include normal and reasonable costs of cover or other reasonable measures of damages utilized in the industries for such contract and agreement claims; and

(ii)

paid in accordance with this paragraph and subsection (d), except as otherwise specifically provided in this subsection.

(D)

Measure of damages for repudiation or disaffirmance of debt obligation

In the case of any debt for borrowed money or evidenced by a security, actual direct compensatory damages shall be no less than the amount lent plus accrued interest plus any accreted original issue discount as of the date the Corporation was appointed receiver of the covered financial company and, to the extent that an allowed secured claim is secured by property the value of which is greater than the amount of such claim and any accrued interest through the date of repudiation or disaffirmance, such accrued interest pursuant to paragraph (1).

(E)

Measure of damages for repudiation or disaffirmance of contingent obligation

In the case of any contingent obligation of a covered financial company consisting of any obligation under a guarantee, letter of credit, loan commitment, or similar credit obligation, the Corporation may, by rule or regulation, prescribe that actual direct compensatory damages shall be no less than the estimated value of the claim as of the date the Corporation was appointed receiver of the covered financial company, as such value is measured based on the likelihood that such contingent claim would become fixed and the probable magnitude thereof.

(4)

Leases under which the covered financial company is the lessee

(A)

In general

If the Corporation as receiver disaffirms or repudiates a lease under which the covered financial company is the lessee, the receiver shall not be liable for any damages (other than damages determined pursuant to subparagraph (B)) for the disaffirmance or repudiation of such lease.

(B)

Payments of rent

Notwithstanding subparagraph (A), the lessor under a lease to which subparagraph (A) would otherwise apply shall—

(i)

be entitled to the contractual rent accruing before the later of the date on which—

(I)

the notice of disaffirmance or repudiation is mailed; or

(II)

the disaffirmance or repudiation becomes effective, unless the lessor is in default or breach of the terms of the lease;

(ii)

have no claim for damages under any acceleration clause or other penalty provision in the lease; and

(iii)

have a claim for any unpaid rent, subject to all appropriate offsets and defenses, due as of the date of the appointment which shall be paid in accordance with this paragraph and subsection (d).

(5)

Leases under which the covered financial company is the lessor

(A)

In general

If the Corporation as receiver for a covered financial company repudiates an unexpired written lease of real property of the covered financial company under which the covered financial company is the lessor and the lessee is not, as of the date of such repudiation, in default, the lessee under such lease may either—

(i)

treat the lease as terminated by such repudiation; or

(ii)

remain in possession of the leasehold interest for the balance of the term of the lease, unless the lessee defaults under the terms of the lease after the date of such repudiation.

(B)

Provisions applicable to lessee remaining in possession

If any lessee under a lease described in subparagraph (A) remains in possession of a leasehold interest pursuant to clause (ii) of subparagraph (A)—

(i)

the lessee—

(I)

shall continue to pay the contractual rent pursuant to the terms of the lease after the date of the repudiation of such lease; and

(II)

may offset against any rent payment which accrues after the date of the repudiation of the lease, any damages which accrue after such date due to the nonperformance of any obligation of the covered financial company under the lease after such date; and

(ii)

the Corporation as receiver shall not be liable to the lessee for any damages arising after such date as a result of the repudiation, other than the amount of any offset allowed under clause (i)(II).

(6)

Contracts for the sale of real property

(A)

In general

If the receiver repudiates any contract (which meets the requirements of subsection (a)(6)) for the sale of real property, and the purchaser of such real property under such contract is in possession and is not, as of the date of such repudiation, in default, such purchaser may either—

(i)

treat the contract as terminated by such repudiation; or

(ii)

remain in possession of such real property.

(B)

Provisions applicable to purchaser remaining in possession

If any purchaser of real property under any contract described in subparagraph (A) remains in possession of such property pursuant to clause (ii) of subparagraph (A)—

(i)

the purchaser—

(I)

shall continue to make all payments due under the contract after the date of the repudiation of the contract; and

(II)

may offset against any such payments any damages which accrue after such date due to the nonperformance (after such date) of any obligation of the covered financial company under the contract; and

(ii)

the Corporation as receiver shall—

(I)

not be liable to the purchaser for any damages arising after such date as a result of the repudiation, other than the amount of any offset allowed under clause (i)(II);

(II)

deliver title to the purchaser in accordance with the provisions of the contract; and

(III)

have no obligation under the contract other than the performance required under subclause (II).

(C)

Assignment and sale allowed

(i)

In general

No provision of this paragraph shall be construed as limiting the right of the Corporation as receiver to assign the contract described in subparagraph (A) and sell the property, subject to the contract and the provisions of this paragraph.

(ii)

No liability after assignment and sale

If an assignment and sale described in clause (i) is consummated, the Corporation as receiver shall have no further liability under the contract described in subparagraph (A) or with respect to the real property which was the subject of such contract.

(7)

Provisions applicable to service contracts

(A)

Services performed before appointment

In the case of any contract for services between any person and any covered financial company for which the Corporation has been appointed receiver, any claim of such person for services performed before the date of appointment shall be—

(i)

a claim to be paid in accordance with subsections (a), (b), and (d); and

(ii)

deemed to have arisen as of the date on which the receiver was appointed.

(B)

Services performed after appointment and prior to repudiation

If, in the case of any contract for services described in subparagraph (A), the Corporation as receiver accepts performance by the other person before making any determination to exercise the right of repudiation of such contract under this section—

(i)

the other party shall be paid under the terms of the contract for the services performed; and

(ii)

the amount of such payment shall be treated as an administrative expense of the receivership.

(C)

Acceptance of performance no bar to subsequent repudiation

The acceptance by the Corporation as receiver for services referred to in subparagraph (B) in connection with a contract described in subparagraph (B) shall not affect the right of the Corporation as receiver to repudiate such contract under this section at any time after such performance.

(8)

Certain qualified financial contracts

(A)

Rights of parties to contracts

Subject to subsection (a)(8) and paragraphs (9) and (10) of this subsection, and notwithstanding any other provision of this section, any other provision of Federal law, or the law of any State, no person shall be stayed or prohibited from exercising—

(i)

any right that such person has to cause the termination, liquidation, or acceleration of any qualified financial contract with a covered financial company which arises upon the date of appointment of the Corporation as receiver for such covered financial company or at any time after such appointment;

(ii)

any right under any security agreement or arrangement or other credit enhancement related to one or more qualified financial contracts described in clause (i); or

(iii)

any right to offset or net out any termination value, payment amount, or other transfer obligation arising under or in connection with 1 or more contracts or agreements described in clause (i), including any master agreement for such contracts or agreements.

(B)

Applicability of other provisions

Subsection (a)(8) shall apply in the case of any judicial action or proceeding brought against the Corporation as receiver referred to in subparagraph (A), or the subject covered financial company, by any party to a contract or agreement described in subparagraph (A)(i) with such covered financial company.

(C)

Certain transfers not avoidable

(i)

In general

Notwithstanding subsection (a)(11), (a)(12), or (c)(12), section 5242 of the Revised Statutes of the United States, or any other provision of Federal or State law relating to the avoidance of preferential or fraudulent transfers, the Corporation, whether acting as the Corporation or as receiver for a covered financial company, may not avoid any transfer of money or other property in connection with any qualified financial contract with a covered financial company.

(ii)

Exception for certain transfers

Clause (i) shall not apply to any transfer of money or other property in connection with any qualified financial contract with a covered financial company if the transferee had actual intent to hinder, delay, or defraud such company, the creditors of such company, or the Corporation as receiver appointed for such company.

(D)

Certain contracts and agreements defined

For purposes of this subsection, the following definitions shall apply:

(i)

Qualified financial contract

The term qualified financial contract means any securities contract, commodity contract, forward contract, repurchase agreement, swap agreement, and any similar agreement that the Corporation determines by regulation, resolution, or order to be a qualified financial contract for purposes of this paragraph.

(ii)

Securities contract

The term securities contract

(I)

means a contract for the purchase, sale, or loan of a security, a certificate of deposit, a mortgage loan, any interest in a mortgage loan, a group or index of securities, certificates of deposit, or mortgage loans or interests therein (including any interest therein or based on the value thereof), or any option on any of the foregoing, including any option to purchase or sell any such security, certificate of deposit, mortgage loan, interest, group or index, or option, and including any repurchase or reverse repurchase transaction on any such security, certificate of deposit, mortgage loan, interest, group or index, or option (whether or not such repurchase or reverse repurchase transaction is a repurchase agreement, as defined in clause (v));

(II)

does not include any purchase, sale, or repurchase obligation under a participation in a commercial mortgage loan unless the Corporation determines by regulation, resolution, or order to include any such agreement within the meaning of such term;

(III)

means any option entered into on a national securities exchange relating to foreign currencies;

(IV)

means the guarantee (including by novation) by or to any securities clearing agency of any settlement of cash, securities, certificates of deposit, mortgage loans or interests therein, group or index of securities, certificates of deposit or mortgage loans or interests therein (including any interest therein or based on the value thereof) or an option on any of the foregoing, including any option to purchase or sell any such security, certificate of deposit, mortgage loan, interest, group or index, or option (whether or not such settlement is in connection with any agreement or transaction referred to in subclauses (I) through (XII) (other than subclause (II)));

(V)

means any margin loan;

(VI)

means any extension of credit for the clearance or settlement of securities transactions;

(VII)

means any loan transaction coupled with a securities collar transaction, any prepaid securities forward transaction, or any total return swap transaction coupled with a securities sale transaction;

(VIII)

means any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;

(IX)

means any combination of the agreements or transactions referred to in this clause;

(X)

means any option to enter into any agreement or transaction referred to in this clause;

(XI)

means a master agreement that provides for an agreement or transaction referred to in any of subclauses (I) through (X), other than subclause (II), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a securities contract under this clause, except that the master agreement shall be considered to be a securities contract under this clause only with respect to each agreement or transaction under the master agreement that is referred to in any of subclauses (I) through (X), other than subclause (II); and

(XII)

means any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in this clause, including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in this clause.

(iii)

Commodity contract

The term commodity contract means—

(I)

with respect to a futures commission merchant, a contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or board of trade;

(II)

with respect to a foreign futures commission merchant, a foreign future;

(III)

with respect to a leverage transaction merchant, a leverage transaction;

(IV)

with respect to a clearing organization, a contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or board of trade that is cleared by such clearing organization, or commodity option traded on, or subject to the rules of, a contract market or board of trade that is cleared by such clearing organization;

(V)

with respect to a commodity options dealer, a commodity option;

(VI)

any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;

(VII)

any combination of the agreements or transactions referred to in this clause;

(VIII)

any option to enter into any agreement or transaction referred to in this clause;

(IX)

a master agreement that provides for an agreement or transaction referred to in any of subclauses (I) through (VIII), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a commodity contract under this clause, except that the master agreement shall be considered to be a commodity contract under this clause only with respect to each agreement or transaction under the master agreement that is referred to in any of subclauses (I) through (VIII); or

(X)

any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in this clause, including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in this clause.

(iv)

Forward contract

The term forward contract means—

(I)

a contract (other than a commodity contract) for the purchase, sale, or transfer of a commodity or any similar good, article, service, right, or interest which is presently or in the future becomes the subject of dealing in the forward contract trade, or product or byproduct thereof, with a maturity date that is more than 2 days after the date on which the contract is entered into, including a repurchase or reverse repurchase transaction (whether or not such repurchase or reverse repurchase transaction is a repurchase agreement, as defined in clause (v)), consignment, lease, swap, hedge transaction, deposit, loan, option, allocated transaction, unallocated transaction, or any other similar agreement;

(II)

any combination of agreements or transactions referred to in subclauses (I) and (III);

(III)

any option to enter into any agreement or transaction referred to in subclause (I) or (II);

(IV)

a master agreement that provides for an agreement or transaction referred to in subclause (I), (II), or (III), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a forward contract under this clause, except that the master agreement shall be considered to be a forward contract under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (II), or (III); or

(V)

any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in subclause (I), (II), (III), or (IV), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.

(v)

Repurchase agreement

The term repurchase agreement (which definition also applies to a reverse repurchase agreement)—

(I)

means an agreement, including related terms, which provides for the transfer of one or more certificates of deposit, mortgage related securities (as such term is defined in section 3 of the Securities Exchange Act of 1934), mortgage loans, interests in mortgage-related securities or mortgage loans, eligible bankers’ acceptances, qualified foreign government securities (which, for purposes of this clause, means a security that is a direct obligation of, or that is fully guaranteed by, the central government of a member of the Organization for Economic Cooperation and Development, as determined by regulation or order adopted by the Board of Governors), or securities that are direct obligations of, or that are fully guaranteed by, the United States or any agency of the United States against the transfer of funds by the transferee of such certificates of deposit, eligible bankers’ acceptances, securities, mortgage loans, or interests with a simultaneous agreement by such transferee to transfer to the transferor thereof certificates of deposit, eligible bankers’ acceptances, securities, mortgage loans, or interests as described above, at a date certain not later than 1 year after such transfers or on demand, against the transfer of funds, or any other similar agreement;

(II)

does not include any repurchase obligation under a participation in a commercial mortgage loan, unless the Corporation determines, by regulation, resolution, or order to include any such participation within the meaning of such term;

(III)

means any combination of agreements or transactions referred to in subclauses (I) and (IV);

(IV)

means any option to enter into any agreement or transaction referred to in subclause (I) or (III);

(V)

means a master agreement that provides for an agreement or transaction referred to in subclause (I), (III), or (IV), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a repurchase agreement under this clause, except that the master agreement shall be considered to be a repurchase agreement under this subclause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (III), or (IV); and

(VI)

means any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in subclause (I), (III), (IV), or (V), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.

(vi)

Swap agreement

The term swap agreement means—

(I)

any agreement, including the terms and conditions incorporated by reference in any such agreement, which is an interest rate swap, option, future, or forward agreement, including a rate floor, rate cap, rate collar, cross-currency rate swap, and basis swap; a spot, same day-tomorrow, tomorrow-next, forward, or other foreign exchange, precious metals, or other commodity agreement; a currency swap, option, future, or forward agreement; an equity index or equity swap, option, future, or forward agreement; a debt index or debt swap, option, future, or forward agreement; a total return, credit spread or credit swap, option, future, or forward agreement; a commodity index or commodity swap, option, future, or forward agreement; weather swap, option, future, or forward agreement; an emissions swap, option, future, or forward agreement; or an inflation swap, option, future, or forward agreement;

(II)

any agreement or transaction that is similar to any other agreement or transaction referred to in this clause and that is of a type that has been, is presently, or in the future becomes, the subject of recurrent dealings in the swap or other derivatives markets (including terms and conditions incorporated by reference in such agreement) and that is a forward, swap, future, option, or spot transaction on one or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, quantitative measures associated with an occurrence, extent of an occurrence, or contingency associated with a financial, commercial, or economic consequence, or economic or financial indices or measures of economic or financial risk or value;

(III)

any combination of agreements or transactions referred to in this clause;

(IV)

any option to enter into any agreement or transaction referred to in this clause;

(V)

a master agreement that provides for an agreement or transaction referred to in subclause (I), (II), (III), or (IV), together with all supplements to any such master agreement, without regard to whether the master agreement contains an agreement or transaction that is not a swap agreement under this clause, except that the master agreement shall be considered to be a swap agreement under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (II), (III), or (IV); and

(VI)

any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in any of subclauses (I) through (V), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such clause.

(vii)

Definitions relating to default

When used in this paragraph and paragraphs (9) and (10)—

(I)

the term default means, with respect to a covered financial company, any adjudication or other official decision by any court of competent jurisdiction, or other public authority pursuant to which the Corporation has been appointed receiver; and

(II)

the term in danger of default means a covered financial company with respect to which the Corporation or appropriate State authority has determined that—

(aa)

in the opinion of the Corporation or such authority—

(AA)

the covered financial company is not likely to be able to pay its obligations in the normal course of business; and

(BB)

there is no reasonable prospect that the covered financial company will be able to pay such obligations without Federal assistance; or

(bb)

in the opinion of the Corporation or such authority—

(AA)

the covered financial company has incurred or is likely to incur losses that will deplete all or substantially all of its capital; and

(BB)

there is no reasonable prospect that the capital will be replenished without Federal assistance.

(viii)

Treatment of master agreement as one agreement

Any master agreement for any contract or agreement described in any of clauses (i) through (vi) (or any master agreement for such master agreement or agreements), together with all supplements to such master agreement, shall be treated as a single agreement and a single qualified financial contact. If a master agreement contains provisions relating to agreements or transactions that are not themselves qualified financial contracts, the master agreement shall be deemed to be a qualified financial contract only with respect to those transactions that are themselves qualified financial contracts.

(ix)

Transfer

The term transfer means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property, including retention of title as a security interest and foreclosure of the equity of redemption of the covered financial company.

(x)

Person

The term person includes any governmental entity in addition to any entity included in the definition of such term in section 1, title 1, United States Code.

(E)

Clarification

No provision of law shall be construed as limiting the right or power of the Corporation, or authorizing any court or agency to limit or delay, in any manner, the right or power of the Corporation to transfer any qualified financial contract or to disaffirm or repudiate any such contract in accordance with this subsection.

(F)

Walkaway clauses not effective

(i)

In general

Notwithstanding the provisions of subparagraph (A) of this paragraph and sections 403 and 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991, no walkaway clause shall be enforceable in a qualified financial contract of a covered financial company in default.

(ii)

Limited suspension of certain obligations

In the case of a qualified financial contract referred to in clause (i), any payment or delivery obligations otherwise due from a party pursuant to the qualified financial contract shall be suspended from the time at which the Corporation is appointed as receiver until the earlier of—

(I)

the time at which such party receives notice that such contract has been transferred pursuant to paragraph (10)(A); or

(II)

5:00 p.m. (eastern time) on the business day following the date of the appointment of the Corporation as receiver.

(iii)

Walkaway clause defined

For purposes of this subparagraph, the term walkaway clause means any provision in a qualified financial contract that suspends, conditions, or extinguishes a payment obligation of a party, in whole or in part, or does not create a payment obligation of a party that would otherwise exist, solely because of the status of such party as a nondefaulting party in connection with the insolvency of a covered financial company that is a party to the contract or the appointment of or the exercise of rights or powers by the Corporation as receiver for such covered financial company, and not as a result of the exercise by a party of any right to offset, setoff, or net obligations that exist under the contract, any other contract between those parties, or applicable law.

(G)

Certain obligations to clearing organizations

In the event that the Corporation has been appointed as receiver for a covered financial company which is a party to any qualified financial contract cleared by or subject to the rules of a clearing organization (as defined in paragraph (9)(D)), the receiver shall use its best efforts to meet all margin, collateral, and settlement obligations of the covered financial company that arise under qualified financial contracts (other than any margin, collateral, or settlement obligation that is not enforceable against the receiver under paragraph (8)(F)(i) or paragraph (10)(B)), as required by the rules of the clearing organization when due. Notwithstanding any other provision of this title, if the receiver fails to satisfy any such margin, collateral, or settlement obligations under the rules of the clearing organization, the clearing organization shall have the immediate right to exercise, and shall not be stayed from exercising, all of its rights and remedies under its rules and applicable law with respect to any qualified financial contract of the covered financial company, including, without limitation, the right to liquidate all positions and collateral of such covered financial company under the company's qualified financial contracts, and suspend or cease to act for such covered financial company, all in accordance with the rules of the clearing organization.

(H)

Recordkeeping

(i)

Joint rulemaking

The Federal primary financial regulatory agencies shall jointly prescribe regulations requiring that financial companies maintain such records with respect to qualified financial contracts (including market valuations) that the Federal primary financial regulatory agencies determine to be necessary or appropriate in order to assist the Corporation as receiver for a covered financial company in being able to exercise its rights and fulfill its obligations under this paragraph or paragraph (9) or (10).

(ii)

Time frame

The Federal primary financial regulatory agencies shall prescribe joint final or interim final regulations not later than 24 months after the date of enactment of this Act.

(iii)

Back-Up rulemaking authority

If the Federal primary financial regulatory agencies do not prescribe joint final or interim final regulations within the time frame in clause (ii), the Chairperson of the Council shall prescribe, in consultation with the Corporation, the regulations required by clause (i).

(iv)

Categorization and tiering

The joint regulations prescribed under clause (i) shall, as appropriate, differentiate among financial companies by taking into consideration their size, risk, complexity, leverage, frequency and dollar amount of qualified financial contracts, interconnectedness to the financial system, and any other factors deemed appropriate.

(9)

Transfer of qualified financial contracts

(A)

In general

In making any transfer of assets or liabilities of a covered financial company in default, which includes any qualified financial contract, the Corporation as receiver for such covered financial company shall either—

(i)

transfer to one financial institution, other than a financial institution for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed or which is otherwise the subject of a bankruptcy or insolvency proceeding—

(I)

all qualified financial contracts between any person or any affiliate of such person and the covered financial company in default;

(II)

all claims of such person or any affiliate of such person against such covered financial company under any such contract (other than any claim which, under the terms of any such contract, is subordinated to the claims of general unsecured creditors of such company);

(III)

all claims of such covered financial company against such person or any affiliate of such person under any such contract; and

(IV)

all property securing or any other credit enhancement for any contract described in subclause (I) or any claim described in subclause (II) or (III) under any such contract; or

(ii)

transfer none of the qualified financial contracts, claims, property or other credit enhancement referred to in clause (i) (with respect to such person and any affiliate of such person).

(B)

Transfer to foreign bank, financial institution, or branch or agency thereof

In transferring any qualified financial contracts and related claims and property under subparagraph (A)(i), the Corporation as receiver for the covered financial company shall not make such transfer to a foreign bank, financial institution organized under the laws of a foreign country, or a branch or agency of a foreign bank or financial institution unless, under the law applicable to such bank, financial institution, branch or agency, to the qualified financial contracts, and to any netting contract, any security agreement or arrangement or other credit enhancement related to one or more qualified financial contracts, the contractual rights of the parties to such qualified financial contracts, netting contracts, security agreements or arrangements, or other credit enhancements are enforceable substantially to the same extent as permitted under this section.

(C)

Transfer of contracts subject to the rules of a clearing organization

In the event that the Corporation as receiver for a financial institution transfers any qualified financial contract and related claims, property, or credit enhancement pursuant to subparagraph (A)(i) and such contract is cleared by or subject to the rules of a clearing organization, the clearing organization shall not be required to accept the transferee as a member by virtue of the transfer.

(D)

Definitions

For purposes of this paragraph—

(i)

the term financial institution means a broker or dealer, a depository institution, a futures commission merchant, a bridge financial company, or any other institution determined by the Corporation, by regulation, to be a financial institution; and

(ii)

the term clearing organization has the same meaning as in section 402 of the Federal Deposit Insurance Corporation Improvement Act of 1991.

(10)

Notification of transfer

(A)

In general

(i)

Notice

The Corporation shall provide notice in accordance with clause (ii), if—

(I)

the Corporation as receiver for a covered financial company in default or in danger of default transfers any assets or liabilities of the covered financial company; and

(II)

the transfer includes any qualified financial contract.

(ii)

Timing

The Corporation as receiver for a covered financial company shall notify any person who is a party to any contract described in clause (i) of such transfer not later than 5:00 p.m. (eastern time) on the business day following the date of the appointment of the Corporation as receiver.

(B)

Certain rights not enforceable

(i)

Receivership

A person who is a party to a qualified financial contract with a covered financial company may not exercise any right that such person has to terminate, liquidate, or net such contract under paragraph (8)(A) solely by reason of or incidental to the appointment under this section of the Corporation as receiver for the covered financial company (or the insolvency or financial condition of the covered financial company for which the Corporation has been appointed as receiver)—

(I)

until 5:00 p.m. (eastern time) on the business day following the date of the appointment; or

(II)

after the person has received notice that the contract has been transferred pursuant to paragraph (9)(A).

(ii)

Notice

For purposes of this paragraph, the Corporation as receiver for a covered financial company shall be deemed to have notified a person who is a party to a qualified financial contract with such covered financial company, if the Corporation has taken steps reasonably calculated to provide notice to such person by the time specified in subparagraph (A).

(C)

Treatment of bridge financial company

For purposes of paragraph (9), a bridge financial company shall not be considered to be a financial institution for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed, or which is otherwise the subject of a bankruptcy or insolvency proceeding.

(D)

Business day defined

For purposes of this paragraph, the term business day means any day other than any Saturday, Sunday, or any day on which either the New York Stock Exchange or the Federal Reserve Bank of New York is closed.

(11)

Disaffirmance or repudiation of qualified financial contracts

In exercising the rights of disaffirmance or repudiation of the Corporation as receiver with respect to any qualified financial contract to which a covered financial company is a party, the Corporation shall either—

(A)

disaffirm or repudiate all qualified financial contracts between—

(i)

any person or any affiliate of such person; and

(ii)

the covered financial company in default; or

(B)

disaffirm or repudiate none of the qualified financial contracts referred to in subparagraph (A) (with respect to such person or any affiliate of such person).

(12)

Certain security and customer interests not avoidable

No provision of this subsection shall be construed as permitting the avoidance of any—

(A)

legally enforceable or perfected security interest in any of the assets of any covered financial company, except in accordance with subsection (a)(11); or

(B)

legally enforceable interest in customer property, security entitlements in respect of assets or property held by the covered financial company for any security entitlement holder.

(13)

Authority to enforce contracts

(A)

In general

The Corporation, as receiver for a covered financial company, may enforce any contract, other than a liability insurance contract of a director or officer, a financial institution bond entered into by the covered financial company, notwithstanding any provision of the contract providing for termination, default, acceleration, or exercise of rights upon, or solely by reason of, insolvency, the appointment of or the exercise of rights or powers by the Corporation as receiver, the filing of the petition pursuant to section 202(a)(1), or the issuance of the recommendations or determination, or any actions or events occurring in connection therewith or as a result thereof, pursuant to section 203.

(B)

Certain rights not affected

No provision of this paragraph may be construed as impairing or affecting any right of the Corporation as receiver to enforce or recover under a liability insurance contract of a director or officer or financial institution bond under other applicable law.

(C)

Consent requirement and ipso facto clauses

(i)

In general

Except as otherwise provided by this section, no person may exercise any right or power to terminate, accelerate, or declare a default under any contract to which the covered financial company is a party (and no provision in any such contract providing for such default, termination, or acceleration shall be enforceable), or to obtain possession of or exercise control over any property of the covered financial company or affect any contractual rights of the covered financial company, without the consent of the Corporation as receiver for the covered financial company during the 90 day period beginning from the appointment of the Corporation as receiver.

(ii)

Exceptions

No provision of this subparagraph shall apply to a director or officer liability insurance contract or a financial institution bond, to the rights of parties to certain qualified financial contracts pursuant to paragraph (8), or to the rights of parties to netting contracts pursuant to subtitle A of title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4401 et seq.), or shall be construed as permitting the Corporation as receiver to fail to comply with otherwise enforceable provisions of such contract.

(D)

Contracts to extend credit

Notwithstanding any other provision in this title, if the Corporation as receiver enforces any contract to extend credit to the covered financial company or bridge financial company, any valid and enforceable obligation to repay such debt shall be paid by the Corporation as receiver, as an administrative expense of the receivership.

(14)

Exception for Federal reserve banks and corporation security interest

No provision of this subsection shall apply with respect to—

(A)

any extension of credit from any Federal reserve bank or the Corporation to any covered financial company; or

(B)

any security interest in the assets of the covered financial company securing any such extension of credit.

(15)

Savings clause

The meanings of terms used in this subsection are applicable for purposes of this subsection only, and shall not be construed or applied so as to challenge or affect the characterization, definition, or treatment of any similar terms under any other statute, regulation, or rule, including the Gramm-Leach-Bliley Act, the Legal Certainty for Bank Products Act of 2000, the securities laws (as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934), and the Commodity Exchange Act.

(16)

Enforcement of contracts guaranteed by the covered financial company

(A)

In General

The Corporation, as receiver for a covered financial company or as receiver for a subsidiary of a covered financial company (including an insured depository institution) shall have the power to enforce contracts of subsidiaries or affiliates of the covered financial company, the obligations under which are guaranteed or otherwise supported by or linked to the covered financial company, notwithstanding any contractual right to cause the termination, liquidation, or acceleration of such contracts based solely on the insolvency, financial condition, or receivership of the covered financial company, if—

(i)

such guaranty or other support and all related assets and liabilities are transferred to and assumed by a bridge financial company or a third party (other than a third party for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed, or which is otherwise the subject of a bankruptcy or insolvency proceeding) within the same period of time as the Corporation is entitled to transfer the qualified financial contracts of such covered financial company; or

(ii)

the Corporation, as receiver, otherwise provides adequate protection with respect to such obligations.

(B)

Rule of construction

For purposes of this paragraph, a bridge financial company shall not be considered to be a third party for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed, or which is otherwise the subject of a bankruptcy or insolvency proceeding.

(d)

Valuation of claims in default

(1)

In general

Notwithstanding any other provision of Federal law or the law of any State, and regardless of the method utilized by the Corporation for a covered financial company, including transactions authorized under subsection (h), this subsection shall govern the rights of the creditors of any such covered financial company.

(2)

Maximum liability

The maximum liability of the Corporation, acting as receiver for a covered financial company or in any other capacity, to any person having a claim against the Corporation as receiver or the covered financial company for which the Corporation is appointed shall equal the amount that such claimant would have received if—

(A)

the Corporation had not been appointed receiver with respect to the covered financial company; and

(B)

the covered financial company had been liquidated under chapter 7 of the Bankruptcy Code, or any similar provision of State insolvency law applicable to the covered financial company.

(3)

Special provision for orderly liquidation by sipc

The maximum liability of the Corporation, acting as receiver or in its corporate capacity for any covered broker or dealer to any customer of such covered broker or dealer, with respect to customer property of such customer, shall be—

(A)

equal to the amount that such customer would have received with respect to such customer property in a case initiated by SIPC under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.); and

(B)

determined as of the close of business on the date on which the Corporation is appointed as receiver.

(4)

Additional payments authorized

(A)

In general

Subject to subsection (o)(1)(D)(i), the Corporation, with the approval of the Secretary, may make additional payments or credit additional amounts to or with respect to or for the account of any claimant or category of claimants of the covered financial company, if the Corporation determines that such payments or credits are necessary or appropriate to minimize losses to the Corporation as receiver from the orderly liquidation of the covered financial company under this section.

(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.

(C)

Manner of payment

The Corporation may make payments or credit amounts under subparagraph (A) directly to the claimants or may make such payments or credit such amounts to a company other than a covered financial company or a bridge financial company established with respect thereto in order to induce such other company to accept liability for such claims.

(e)

Limitation on court action

Except as provided in this title, no court may take any action to restrain or affect the exercise of powers or functions of the receiver hereunder, and any remedy against the Corporation or receiver shall be limited to money damages determined in accordance with this title.

(f)

Liability of directors and officers

(1)

In general

A director or officer of a covered financial company may be held personally liable for monetary damages in any civil action described in paragraph (2) by, on behalf of, or at the request or direction of the Corporation, which action is prosecuted wholly or partially for the benefit of the Corporation—

(A)

acting as receiver for such covered financial company;

(B)

acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed by the Corporation as receiver; or

(C)

acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed in whole or in part by a covered financial company or its affiliate in connection with assistance provided under this title.

(2)

Actions covered

Paragraph (1) shall apply with respect to actions for gross negligence, including any similar conduct or conduct that demonstrates a greater disregard of a duty of care (than gross negligence) including intentional tortious conduct, as such terms are defined and determined under applicable State law.

(3)

Savings clause

Nothing in this subsection shall impair or affect any right of the Corporation under other applicable law.

(g)

Damages

In any proceeding related to any claim against a director, officer, employee, agent, attorney, accountant, or appraiser of a covered financial company, or any other party employed by or providing services to a covered financial company, recoverable damages determined to result from the improvident or otherwise improper use or investment of any assets of the covered financial company shall include principal losses and appropriate interest.

(h)

Bridge financial companies

(1)

Organization

(A)

Purpose

The Corporation, as receiver for one or more covered financial companies or in anticipation of being appointed receiver for one or more covered financial companies, may organize one or more bridge financial companies in accordance with this subsection.

(B)

Authorities

Upon the creation of a bridge financial company under subparagraph (A) with respect to a covered financial company, such bridge financial company may—

(i)

assume such liabilities (including liabilities associated with any trust or custody business, but excluding any liabilities that count as regulatory capital) of such covered financial company as the Corporation may, in its discretion, determine to be appropriate;

(ii)

purchase such assets (including assets associated with any trust or custody business) of such covered financial company as the Corporation may, in its discretion, determine to be appropriate; and

(iii)

perform any other temporary function which the Corporation may, in its discretion, prescribe in accordance with this section.

(2)

Charter and establishment

(A)

Establishment

Except as provided in subparagraph (H), where the covered financial company is a covered broker or dealer, the Corporation, as receiver for a covered financial company, may grant a Federal charter to and approve articles of association for one or more bridge financial company or companies, with respect to such covered financial company which shall, by operation of law and immediately upon issuance of its charter and approval of its articles of association, be established and operate in accordance with, and subject to, such charter, articles, and this section.

(B)

Management

Upon its establishment, a bridge financial company shall be under the management of a board of directors appointed by the Corporation.

(C)

Articles of association

The articles of association and organization certificate of a bridge financial company shall have such terms as the Corporation may provide, and shall be executed by such representatives as the Corporation may designate.

(D)

Terms of charter; rights and privileges

Subject to and in accordance with the provisions of this subsection, the Corporation shall—

(i)

establish the terms of the charter of a bridge financial company and the rights, powers, authorities, and privileges of a bridge financial company granted by the charter or as an incident thereto; and

(ii)

provide for, and establish the terms and conditions governing, the management (including the bylaws and the number of directors of the board of directors) and operations of the bridge financial company.

(E)

Transfer of rights and privileges of covered financial company

(i)

In general

Notwithstanding any other provision of Federal or State law, the Corporation may provide for a bridge financial company to succeed to and assume any rights, powers, authorities, or privileges of the covered financial company with respect to which the bridge financial company was established and, upon such determination by the Corporation, the bridge financial company shall immediately and by operation of law succeed to and assume such rights, powers, authorities, and privileges.

(ii)

Effective without approval

Any succession to or assumption by a bridge financial company of rights, powers, authorities, or privileges of a covered financial company under clause (i) or otherwise shall be effective without any further approval under Federal or State law, assignment, or consent with respect thereto.

(F)

Corporate governance and election and designation of body of law

To the extent permitted by the Corporation and consistent with this section and any rules, regulations, or directives issued by the Corporation under this section, a bridge financial company may elect to follow the corporate governance practices and procedures that are applicable to a corporation incorporated under the general corporation law of the State of Delaware, or the State of incorporation or organization of the covered financial company with respect to which the bridge financial company was established, as such law may be amended from time to time.

(G)

Capital

(i)

Capital not required

Notwithstanding any other provision of Federal or State law, a bridge financial company may, if permitted by the Corporation, operate without any capital or surplus, or with such capital or surplus as the Corporation may in its discretion determine to be appropriate.

(ii)

No contribution by the corporation required

The Corporation is not required to pay capital into a bridge financial company or to issue any capital stock on behalf of a bridge financial company established under this subsection.

(iii)

Authority

If the Corporation determines that such action is advisable, the Corporation may cause capital stock or other securities of a bridge financial company established with respect to a covered financial company to be issued and offered for sale in such amounts and on such terms and conditions as the Corporation may, in its discretion, determine.

(iv)

Operating funds in lieu of capital and implementation plan

Upon the organization of a bridge financial company, and thereafter as the Corporation may, in its discretion, determine to be necessary or advisable, the Corporation may make available to the bridge financial company, subject to the plan described in subsection (n)(9), funds for the operation of the bridge financial company in lieu of capital.

(H)

Bridge brokers or dealers

(i)

In general

The Corporation, as receiver for a covered broker or dealer, may approve articles of association for one or more bridge financial companies with respect to such covered broker or dealer, which bridge financial company or companies shall, by operation of law and immediately upon approval of its articles of association—

(I)

be established and deemed registered with the Commission under the Securities Exchange Act of 1934 and a member of SIPC;

(II)

operate in accordance with such articles and this section; and

(III)

succeed to any and all registrations and memberships of the covered financial company with or in any self-regulatory organizations.

(ii)

Other requirements

Except as provided in clause (i), and notwithstanding any other provision of this section, the bridge financial company shall be subject to the Federal securities laws and all requirements with respect to being a member of a self-regulatory organization, unless exempted from any such requirements by the Commission, as is necessary or appropriate in the public interest or for the protection of investors.

(iii)

Treatment of customers

Except as otherwise provided by this title, any customer of the covered broker or dealer whose account is transferred to a bridge financial company shall have all the rights, privileges, and protections under section 205(f) and under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), that such customer would have had if the account were not transferred from the covered financial company under this subparagraph.

(iv)

Operation of bridge brokers or dealers

Notwithstanding any other provision of this title, the Corporation shall not operate any bridge financial company created by the Corporation under this title with respect to a covered broker or dealer in such a manner as to adversely affect the ability of customers to promptly access their customer property in accordance with applicable law.

(3)

Interests in and assets and obligations of covered financial company

Notwithstanding paragraph (1) or (2) or any other provision of law—

(A)

a bridge financial company shall assume, acquire, or succeed to the assets or liabilities of a covered financial company (including the assets or liabilities associated with any trust or custody business) only to the extent that such assets or liabilities are transferred by the Corporation to the bridge financial company in accordance with, and subject to the restrictions set forth in, paragraph (1)(B); and

(B)

a bridge financial company shall not assume, acquire, or succeed to any obligation that a covered financial company for which the Corporation has been appointed receiver may have to any shareholder, member, general partner, limited partner, or other person with an interest in the equity of the covered financial company that arises as a result of the status of that person having an equity claim in the covered financial company.

(4)

Bridge financial company treated as being in default for certain purposes

A bridge financial company shall be treated as a covered financial company in default at such times and for such purposes as the Corporation may, in its discretion, determine.

(5)

Transfer of assets and liabilities

(A)

Authority of corporation

The Corporation, as receiver for a covered financial company, may transfer any assets and liabilities of a covered financial company (including any assets or liabilities associated with any trust or custody business) to one or more bridge financial companies, in accordance with and subject to the restrictions of paragraph (1).

(B)

Subsequent transfers

At any time after the establishment of a bridge financial company with respect to a covered financial company, the Corporation, as receiver, may transfer any assets and liabilities of such covered financial company as the Corporation may, in its discretion, determine to be appropriate in accordance with and subject to the restrictions of paragraph (1).

(C)

Treatment of trust or custody business

For purposes of this paragraph, the trust or custody business, including fiduciary appointments, held by any covered financial company is included among its assets and liabilities.

(D)

Effective without approval

The transfer of any assets or liabilities, including those associated with any trust or custody business of a covered financial company, to a bridge financial company shall be effective without any further approval under Federal or State law, assignment, or consent with respect thereto.

(E)

Equitable treatment of similarly situated creditors

The Corporation shall treat all creditors of a covered financial company that are similarly situated under subsection (b)(1), in a similar manner in exercising the authority of the Corporation under this subsection to transfer any assets or liabilities of the covered financial company to one or more bridge financial companies established with respect to such covered financial company, except that the Corporation may take any action (including making payments, subject to subsection (o)(1)(D)(i)) that does not comply with this subparagraph, if—

(i)

the Corporation determines that such action is necessary—

(I)

to maximize the value of the assets of the covered financial company;

(II)

to maximize the present value return from the sale or other disposition of the assets of the covered financial company; or

(III)

to minimize the amount of any loss realized upon the sale or other disposition of the assets of the covered financial company; and

(ii)

all creditors that are similarly situated under subsection (b)(1) receive not less than the amount provided under paragraphs (2) and (3) of subsection (d).

(F)

Limitation on transfer of liabilities

Notwithstanding any other provision of law, the aggregate amount of liabilities of a covered financial company that are transferred to, or assumed by, a bridge financial company from a covered financial company may not exceed the aggregate amount of the assets of the covered financial company that are transferred to, or purchased by, the bridge financial company from the covered financial company.

(6)

Stay of judicial action

Any judicial action to which a bridge financial company becomes a party by virtue of its acquisition of any assets or assumption of any liabilities of a covered financial company shall be stayed from further proceedings for a period of not longer than 45 days (or such longer period as may be agreed to upon the consent of all parties) at the request of the bridge financial company.

(7)

Agreements against interest of the bridge financial company

No agreement that tends to diminish or defeat the interest of the bridge financial company in any asset of a covered financial company acquired by the bridge financial company shall be valid against the bridge financial company, unless such agreement—

(A)

is in writing;

(B)

was executed by an authorized officer or representative of the covered financial company or confirmed in the ordinary course of business by the covered financial company; and

(C)

has been on the official record of the company, since the time of its execution, or with which, the party claiming under the agreement provides documentation of such agreement and its authorized execution or confirmation by the covered financial company that is acceptable to the receiver.

(8)

No Federal status

(A)

Agency status

A bridge financial company is not an agency, establishment, or instrumentality of the United States.

(B)

Employee status

Representatives for purposes of paragraph (1)(B), directors, officers, employees, or agents of a bridge financial company are not, solely by virtue of service in any such capacity, officers or employees of the United States. Any employee of the Corporation or of any Federal instrumentality who serves at the request of the Corporation as a representative for purposes of paragraph (1)(B), director, officer, employee, or agent of a bridge financial company shall not—

(i)

solely by virtue of service in any such capacity lose any existing status as an officer or employee of the United States for purposes of title 5, United States Code, or any other provision of law; or

(ii)

receive any salary or benefits for service in any such capacity with respect to a bridge financial company in addition to such salary or benefits as are obtained through employment with the Corporation or such Federal instrumentality.

(9)

Funding authorized

The Corporation may, subject to the plan described in subsection (n)(9), provide funding to facilitate any transaction described in subparagraph (A), (B), (C), or (D) of paragraph (13) with respect to any bridge financial company, or facilitate the acquisition by a bridge financial company of any assets, or the assumption of any liabilities, of a covered financial company for which the Corporation has been appointed receiver.

(10)

Exempt tax status

Notwithstanding any other provision of Federal or State law, a bridge financial company, its franchise, property, and income shall be exempt from all taxation now or hereafter imposed by the United States, by any territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority.

(11)

Federal agency approval; antitrust review

If a transaction involving the merger or sale of a bridge financial company requires approval by a Federal agency, the transaction may not be consummated before the 5th calendar day after the date of approval by the Federal agency responsible for such approval with respect thereto. If, in connection with any such approval a report on competitive factors from the Attorney General is required, the Federal agency responsible for such approval shall promptly notify the Attorney General of the proposed transaction and the Attorney General shall provide the required report within 10 days of the request. If a notification is required under section 7A of the Clayton Act with respect to such transaction, the required waiting period shall end on the 15th day after the date on which the Attorney General and the Federal Trade Commission receive such notification, unless the waiting period is terminated earlier under section 7A(b)(2) of the Clayton Act, or extended under section 7A(e)(2) of that Act.

(12)

Duration of bridge financial company

Subject to paragraphs (13) and (14), the status of a bridge financial company as such shall terminate at the end of the 2-year period following the date on which it was granted a charter. The Corporation may, in its discretion, extend the status of the bridge financial company as such for no more than 3 additional 1-year periods.

(13)

Termination of bridge financial company status

The status of any bridge financial company as such shall terminate upon the earliest of—

(A)

the date of the merger or consolidation of the bridge financial company with a company that is not a bridge financial company;

(B)

at the election of the Corporation, the sale of a majority of the capital stock of the bridge financial company to a company other than the Corporation and other than another bridge financial company;

(C)

the sale of 80 percent, or more, of the capital stock of the bridge financial company to a person other than the Corporation and other than another bridge financial company;

(D)

at the election of the Corporation, either the assumption of all or substantially all of the liabilities of the bridge financial company by a company that is not a bridge financial company, or the acquisition of all or substantially all of the assets of the bridge financial company by a company that is not a bridge financial company, or other entity as permitted under applicable law; and

(E)

the expiration of the period provided in paragraph (12), or the earlier dissolution of the bridge financial company, as provided in paragraph (15).

(14)

Effect of termination events

(A)

Merger or consolidation

A merger or consolidation, described in paragraph (13)(A) shall be conducted in accordance with, and shall have the effect provided in, the provisions of applicable law. For the purpose of effecting such a merger or consolidation, the bridge financial company shall be treated as a corporation organized under the laws of the State of Delaware (unless the law of another State has been selected by the bridge financial company in accordance with paragraph (2)(F)), and the Corporation shall be treated as the sole shareholder thereof, notwithstanding any other provision of State or Federal law.

(B)

Charter conversion

Following the sale of a majority of the capital stock of the bridge financial company, as provided in paragraph (13)(B), the Corporation may amend the charter of the bridge financial company to reflect the termination of the status of the bridge financial company as such, whereupon the company shall have all of the rights, powers, and privileges under its constituent documents and applicable Federal or State law. In connection therewith, the Corporation may take such steps as may be necessary or convenient to reincorporate the bridge financial company under the laws of a State and, notwithstanding any provisions of Federal or State law, such State-chartered corporation shall be deemed to succeed by operation of law to such rights, titles, powers, and interests of the bridge financial company as the Corporation may provide, with the same effect as if the bridge financial company had merged with the State-chartered corporation under provisions of the corporate laws of such State.

(C)

Sale of stock

Following the sale of 80 percent or more of the capital stock of a bridge financial company, as provided in paragraph (13)(C), the company shall have all of the rights, powers, and privileges under its constituent documents and applicable Federal or State law. In connection therewith, the Corporation may take such steps as may be necessary or convenient to reincorporate the bridge financial company under the laws of a State and, notwithstanding any provisions of Federal or State law, the State-chartered corporation shall be deemed to succeed by operation of law to such rights, titles, powers and interests of the bridge financial company as the Corporation may provide, with the same effect as if the bridge financial company had merged with the State-chartered corporation under provisions of the corporate laws of such State.

(D)

Assumption of liabilities and sale of assets

Following the assumption of all or substantially all of the liabilities of the bridge financial company, or the sale of all or substantially all of the assets of the bridge financial company, as provided in paragraph (13)(D), at the election of the Corporation, the bridge financial company may retain its status as such for the period provided in paragraph (12) or may be dissolved at the election of the Corporation.

(E)

Amendments to charter

Following the consummation of a transaction described in subparagraph (A), (B), (C), or (D) of paragraph (13), the charter of the resulting company shall be amended to reflect the termination of bridge financial company status, if appropriate.

(15)

Dissolution of bridge financial company

(A)

In general

Notwithstanding any other provision of Federal or State law, if the status of a bridge financial company as such has not previously been terminated by the occurrence of an event specified in subparagraph (A), (B), (C), or (D) of paragraph (13)—

(i)

the Corporation may, in its discretion, dissolve the bridge financial company in accordance with this paragraph at any time; and

(ii)

the Corporation shall promptly commence dissolution proceedings in accordance with this paragraph upon the expiration of the 2-year period following the date on which the bridge financial company was chartered, or any extension thereof, as provided in paragraph (12).

(B)

Procedures

The Corporation shall remain the receiver for a bridge financial company for the purpose of dissolving the bridge financial company. The Corporation as receiver for a bridge financial company shall wind up the affairs of the bridge financial company in conformity with the provisions of law relating to the liquidation of covered financial companies under this title. With respect to any such bridge financial company, the Corporation as receiver shall have all the rights, powers, and privileges and shall perform the duties related to the exercise of such rights, powers, or privileges granted by law to the Corporation as receiver for a covered financial company under this title and, notwithstanding any other provision of law, in the exercise of such rights, powers, and privileges, the Corporation shall not be subject to the direction or supervision of any State agency or other Federal agency.

(16)

Authority to obtain credit

(A)

In general

A bridge financial company may obtain unsecured credit and issue unsecured debt.

(B)

Inability to obtain credit

If a bridge financial company is unable to obtain unsecured credit or issue unsecured debt, the Corporation may authorize the obtaining of credit or the issuance of debt by the bridge financial company—

(i)

with priority over any or all of the obligations of the bridge financial company;

(ii)

secured by a lien on property of the bridge financial company that is not otherwise subject to a lien; or

(iii)

secured by a junior lien on property of the bridge financial company that is subject to a lien.

(C)

Limitations

(i)

In general

The Corporation, after notice and a hearing, may authorize the obtaining of credit or the issuance of debt by a bridge financial company that is secured by a senior or equal lien on property of the bridge financial company that is subject to a lien, only if—

(I)

the bridge financial company is unable to otherwise obtain such credit or issue such debt; and

(II)

there is adequate protection of the interest of the holder of the lien on the property with respect to which such senior or equal lien is proposed to be granted.

(ii)

Hearing

The hearing required pursuant to this subparagraph shall be before a court of the United States, which shall have jurisdiction to conduct such hearing and to authorize a bridge financial company to obtain secured credit under clause (i).

(D)

Burden of proof

In any hearing under this paragraph, the Corporation has the burden of proof on the issue of adequate protection.

(E)

Qualified financial contracts

No credit or debt obtained or issued by a bridge financial company may contain terms that impair the rights of a counterparty to a qualified financial contract upon a default by the bridge financial company, other than the priority of such counterparty’s unsecured claim (after the exercise of rights) relative to the priority of the bridge financial company’s obligations in respect of such credit or debt, unless such counterparty consents in writing to any such impairment.

(17)

Effect on debts and liens

The reversal or modification on appeal of an authorization under this subsection to obtain credit or issue debt, or of a grant under this section of a priority or a lien, does not affect the validity of any debt so issued, or any priority or lien so granted, to an entity that extended such credit in good faith, whether or not such entity knew of the pendency of the appeal, unless such authorization and the issuance of such debt, or the granting of such priority or lien, were stayed pending appeal.

(i)

Sharing records

If the Corporation has been appointed as receiver for a covered financial company, other Federal regulators shall make all records relating to the covered financial company available to the Corporation, which may be used by the Corporation in any manner that the Corporation determines to be appropriate.

(j)

Expedited procedures for certain claims

(1)

Time for filing notice of appeal

The notice of appeal of any order, whether interlocutory or final, entered in any case brought by the Corporation against a director, officer, employee, agent, attorney, accountant, or appraiser of the covered financial company, or any other person employed by or providing services to a covered financial company, shall be filed not later than 30 days after the date of entry of the order. The hearing of the appeal shall be held not later than 120 days after the date of the notice of appeal. The appeal shall be decided not later than 180 days after the date of the notice of appeal.

(2)

Scheduling

The court shall expedite the consideration of any case brought by the Corporation against a director, officer, employee, agent, attorney, accountant, or appraiser of a covered financial company or any other person employed by or providing services to a covered financial company. As far as practicable, the court shall give such case priority on its docket.

(3)

Judicial discretion

The court may modify the schedule and limitations stated in paragraphs (1) and (2) in a particular case, based on a specific finding that the ends of justice that would be served by making such a modification would outweigh the best interest of the public in having the case resolved expeditiously.

(k)

Foreign investigations

The Corporation, as receiver for any covered financial company, and for purposes of carrying out any power, authority, or duty with respect to a covered financial company—

(1)

may request the assistance of any foreign financial authority and provide assistance to any foreign financial authority in accordance with section 8(v) of the Federal Deposit Insurance Act, as if the covered financial company were an insured depository institution, the Corporation were the appropriate Federal banking agency for the company, and any foreign financial authority were the foreign banking authority; and

(2)

may maintain an office to coordinate foreign investigations or investigations on behalf of foreign financial authorities.

(l)

Prohibition on entering secrecy agreements and protective orders

The Corporation may not enter into any agreement or approve any protective order which prohibits the Corporation from disclosing the terms of any settlement of an administrative or other action for damages or restitution brought by the Corporation in its capacity as receiver for a covered financial company.

(m)

Liquidation of certain covered financial companies or bridge financial companies

(1)

In general

Except as specifically provided in this section, and notwithstanding any other provision of law, the Corporation, in connection with the liquidation of any covered financial company or bridge financial company with respect to which the Corporation has been appointed as receiver, shall—

(A)

in the case of any covered financial company or bridge financial company that is a stockbroker, but is not a member of the Securities Investor Protection Corporation, apply the provisions of subchapter III of chapter 7 of the Bankruptcy Code, in respect of the distribution to any customer of all customer name security and customer property and member property, as if such covered financial company or bridge financial company were a debtor for purposes of such subchapter; or

(B)

in the case of any covered financial company or bridge financial company that is a commodity broker, apply the provisions of subchapter IV of chapter 7 the Bankruptcy Code, in respect of the distribution to any customer of all customer property and member property, as if such covered financial company or bridge financial company were a debtor for purposes of such subchapter.

(2)

Definitions

For purposes of this subsection—

(A)

the terms customer, customer name security, and customer property and member property have the same meanings as in sections 741 and 761 of title 11, United States Code; and

(B)

the terms commodity broker and stockbroker have the same meanings as in section 101 of the Bankruptcy Code.

(n)

Orderly liquidation fund

(1)

Establishment

There is established in the Treasury of the United States a separate fund to be known as the Orderly Liquidation Fund, which shall be available to the Corporation to carry out the authorities contained in this title, for the cost of actions authorized by this title, including the orderly liquidation of covered financial companies, payment of administrative expenses, the payment of principal and interest by the Corporation on obligations issued under paragraph (5), and the exercise of the authorities of the Corporation under this title.

(2)

Proceeds

Amounts received by the Corporation, including assessments received under subsection (o), proceeds of obligations issued under paragraph (5), interest and other earnings from investments, and repayments to the Corporation by covered financial companies, shall be deposited into the Fund.

(3)

Management

The Corporation shall manage the Fund in accordance with this subsection and the policies and procedures established under section 203(d).

(4)

Investments

At the request of the Corporation, the Secretary may invest such portion of amounts held in the Fund that are not, in the judgment of the Corporation, required to meet the current needs of the Corporation, in obligations of the United States having suitable maturities, as determined by the Corporation. The interest on and the proceeds from the sale or redemption of such obligations shall be credited to the Fund.

(5)

Authority to issue obligations

(A)

Corporation authorized to issue obligations

Upon appointment by the Secretary of the Corporation as receiver for a covered financial company, the Corporation is authorized to issue obligations to the Secretary.

(B)

Secretary authorized to purchase obligations

The Secretary may, under such terms and conditions as the Secretary may require, purchase or agree to purchase any obligations issued under subparagraph (A), and for such purpose, the Secretary is authorized to use as a public debt transaction the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include such purchases.

(C)

Interest rate

Each purchase of obligations by the Secretary under this paragraph shall be upon such terms and conditions as to yield a return at a rate determined by the Secretary, taking into consideration the current average yield on outstanding marketable obligations of the United States of comparable maturity, 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.

(D)

Secretary authorized to sell obligations

The Secretary may sell, upon such terms and conditions as the Secretary shall determine, any of the obligations acquired under this paragraph.

(E)

Public debt transactions

All purchases and sales by the Secretary of such obligations under this paragraph shall be treated as public debt transactions of the United States, and the proceeds from the sale of any obligations acquired by the Secretary under this paragraph shall be deposited into the Treasury of the United States as miscellaneous receipts.

(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).

(7)

Rulemaking

The Corporation and the Secretary shall jointly, in consultation with the Council, prescribe regulations governing the calculation of the maximum obligation limitation defined in this paragraph.

(8)

Rule of construction

(A)

In general

Nothing in this section shall be construed to affect the authority of the Corporation under subsection (a) or (b) of section 14 or section 15(c)(5) of the Federal Deposit Insurance Act (12 U.S.C. 1824, 1825(c)(5)), the management of the Deposit Insurance Fund by the Corporation, or the resolution of insured depository institutions, provided that—

(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.

(B)

Valuation

For purposes of determining the amount of obligations under this subsection—

(i)

the Corporation shall include as an obligation any contingent liability of the Corporation pursuant to this title; and

(ii)

the Corporation shall value any contingent liability at its expected cost to the Corporation.

(9)

Orderly liquidation and repayment plans

(A)

Orderly liquidation plan

Amounts in the Fund shall be available to the Corporation with regard to a covered financial company for which the Corporation is appointed receiver after the Corporation has developed an orderly liquidation plan that is acceptable to the Secretary with regard to such covered financial company, including the provision and use of funds, including taking any actions specified under section 204(d) and subsection (h)(2)(G)(iv) and (h)(9) of this section, and payments to third parties. The orderly liquidation plan shall take into account actions to avoid or mitigate potential adverse effects on low income, minority, or underserved communities affected by the failure of the covered financial company, and shall provide for coordination with the primary financial regulatory agencies, as appropriate, to ensure that such actions are taken. The Corporation may, at any time, amend any orderly liquidation plan approved by the Secretary with the concurrence of the Secretary.

(B)

Mandatory repayment plan

(i)

In general

No amount authorized under paragraph (6)(B) may be provided by the Secretary to the Corporation under paragraph (5), unless an agreement is in effect between the Secretary and the Corporation that—

(I)

provides a specific plan and schedule to achieve the repayment of the outstanding amount of any borrowing under paragraph (5); and

(II)

demonstrates that income to the Corporation from the liquidated assets of the covered financial company and assessments under subsection (o) will be sufficient to amortize the outstanding balance within the period established in the repayment schedule and pay the interest accruing on such balance within the time provided in subsection (o)(1)(B).

(ii)

Consultation with and report to Congress

The Secretary and the Corporation shall—

(I)

consult with the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the terms of any repayment schedule agreement; and

(II)

submit a copy of the repayment schedule agreement to the Committees described in subclause (I) before the end of the 30-day period beginning on the date on which any amount is provided by the Secretary to the Corporation under paragraph (5).

(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.

(o)

Assessments

(1)

Risk-based assessments

(A)

Eligible financial companies defined

For purposes of this subsection, the term eligible financial company means any bank holding company with total consolidated assets equal to or greater than $50,000,000,000 and any nonbank financial company supervised by the Board of Governors.

(B)

Assessments

The Corporation shall charge one or more risk-based assessments in accordance with the provisions of subparagraph (D), if such assessments are necessary to pay in full the obligations issued by the Corporation to the Secretary under this title within 60 months of the date of issuance of such obligations.

(C)

Extensions authorized

The Corporation may, with the approval of the Secretary, extend the time period under subparagraph (B), if the Corporation determines that an extension is necessary to avoid a serious adverse effect on the financial system of the United States.

(D)

Application of assessments

To meet the requirements of subparagraph (B), 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 (B), 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 (D)(i) shall not include the provision of financing, as defined by rule of the Corporation, to third parties.

(2)

Graduated assessment rate

The Corporation shall impose assessments on a graduated basis, with financial companies having greater assets and risk being assessed at a higher rate.

(3)

Notification and payment

The Corporation shall notify each financial company of that company's assessment under this subsection. Any financial company subject to assessment under this subsection shall pay such assessment in accordance with the regulations prescribed pursuant to paragraph (6).

(4)

Risk-based assessment considerations

In imposing assessments under paragraph (1)(D)(ii), the Corporation shall use a risk matrix. The Council shall make a recommendation to the Corporation on the risk matrix to be used in imposing such assessments, and the Corporation shall take into account any such recommendation in the establishment of the risk matrix to be used to impose such assessments. In recommending or establishing such risk matrix, the Council and the Corporation, respectively, shall take into account—

(A)

economic conditions generally affecting financial companies so as to allow assessments to increase during more favorable economic conditions and to decrease during less favorable economic conditions;

(B)

any assessments imposed on a financial company or an affiliate of a financial company that—

(i)

is an insured depository institution, assessed pursuant to section 7 or 13(c)(4)(G) of the Federal Deposit Insurance Act;

(ii)

is a member of the Securities Investor Protection Corporation, assessed pursuant to section 4 of the Securities Investor Protection Act of 1970 (15 U.S.C. 78ddd);

(iii)

is an insured credit union, assessed pursuant to section 202(c)(1)(A)(i) of the Federal Credit Union Act (12 U.S.C. 1782(c)(1)(A)(i)); or

(iv)

is an insurance company, assessed pursuant to applicable State law to cover (or reimburse payments made to cover) the costs of the rehabilitation, liquidation, or other State insolvency proceeding with respect to 1 or more insurance companies;

(C)

the risks presented by the financial company to the financial system and the extent to which the financial company has benefitted, or likely would benefit, from the orderly liquidation of a financial company under this title, including—

(i)

the amount, different categories, and concentrations of assets of the financial company and its affiliates, including both on-balance sheet and off-balance sheet assets;

(ii)

the activities of the financial company and its affiliates;

(iii)

the relevant market share of the financial company and its affiliates;

(iv)

the extent to which the financial company is leveraged;

(v)

the potential exposure to sudden calls on liquidity precipitated by economic distress;

(vi)

the amount, maturity, volatility, and stability of the company's financial obligations to, and relationship with, other financial companies;

(vii)

the amount, maturity, volatility, and stability of the liabilities of the company, including the degree of reliance on short-term funding, taking into consideration existing systems for measuring a company’s risk-based capital;

(viii)

the stability and variety of the company’s sources of funding;

(ix)

the company’s importance as a source of credit for households, businesses, and State and local governments and as a source of liquidity for the financial system;

(x)

the extent to which assets are simply managed and not owned by the financial company and the extent to which ownership of assets under management is diffuse; and

(xi)

the amount, different categories, and concentrations of liabilities, both insured and uninsured, contingent and noncontingent, including both on-balance sheet and off-balance sheet liabilities, of the financial company and its affiliates;

(D)

any risks presented by the financial company during the 10-year period immediately prior to the appointment of the Corporation as receiver for the covered financial company that contributed to the failure of the covered financial company; and

(E)

such other risk-related factors as the Corporation, or the Council, as applicable, may determine to be appropriate.

(5)

Collection of information

The Corporation may impose on covered financial companies such collection of information requirements as the Corporation deems necessary to carry out this subsection after the appointment of the Corporation as receiver under this title.

(6)

Rulemaking

(A)

In general

The Corporation shall prescribe regulations to carry out this subsection. The Corporation shall consult with the Secretary in the development and finalization of such regulations.

(B)

Equitable treatment

The regulations prescribed under subparagraph (A) shall take into account the differences in risks posed to the financial stability of the United States by financial companies, the differences in the liability structures of financial companies, and the different bases for other assessments that such financial companies may be required to pay, to ensure that assessed financial companies are treated equitably and that assessments under this subsection reflect such differences.

(p)

Unenforceability of certain agreements

(1)

In general

No provision described in paragraph (2) shall be enforceable against or impose any liability on any person, as such enforcement or liability shall be contrary to public policy.

(2)

Prohibited provisions

A provision described in this paragraph is any term contained in any existing or future standstill, confidentiality, or other agreement that, directly or indirectly—

(A)

affects, restricts, or limits the ability of any person to offer to acquire or acquire;

(B)

prohibits any person from offering to acquire or acquiring; or

(C)

prohibits any person from using any previously disclosed information in connection with any such offer to acquire or acquisition of,

all or part of any covered financial company, including any liabilities, assets, or interest therein, in connection with any transaction in which the Corporation exercises its authority under this title.
(q)

Other exemptions

(1)

In general

When acting as a receiver under this title—

(A)

the Corporation, including its franchise, its capital, reserves and surplus, and its income, shall be exempt from all taxation imposed by any State, county, municipality, or local taxing authority, except that any real property of the Corporation shall be subject to State, territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed, except that, notwithstanding the failure of any person to challenge an assessment under State law of the value of such property, such value, and the tax thereon, shall be determined as of the period for which such tax is imposed;

(B)

no property of the Corporation shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of the Corporation, nor shall any involuntary lien attach to the property of the Corporation; and

(C)

the Corporation shall not be liable for any amounts in the nature of penalties or fines, including those arising from the failure of any person to pay any real property, personal property, probate, or recording tax or any recording or filing fees when due; and

(D)

the Corporation shall be exempt from all prosecution by the United States or any State, county, municipality, or local authority for any criminal offense arising under Federal, State, county, municipal, or local law, which was allegedly committed by the covered financial company, or persons acting on behalf of the covered financial company, prior to the appointment of the Corporation as receiver.

(2)

Limitation

Paragraph (1) shall not apply with respect to any tax imposed (or other amount arising) under the Internal Revenue Code of 1986.

(r)

Certain sales of assets prohibited

(1)

Persons who engaged in improper conduct with, or caused losses to, covered financial companies

The Corporation shall prescribe regulations which, at a minimum, shall prohibit the sale of assets of a covered financial company by the Corporation to—

(A)

any person who—

(i)

has defaulted, or was a member of a partnership or an officer or director of a corporation that has defaulted, on 1 or more obligations, the aggregate amount of which exceeds $1,000,000, to such covered financial company;

(ii)

has been found to have engaged in fraudulent activity in connection with any obligation referred to in clause (i); and

(iii)

proposes to purchase any such asset in whole or in part through the use of the proceeds of a loan or advance of credit from the Corporation or from any covered financial company;

(B)

any person who participated, as an officer or director of such covered financial company or of any affiliate of such company, in a material way in any transaction that resulted in a substantial loss to such covered financial company; or

(C)

any person who has demonstrated a pattern or practice of defalcation regarding obligations to such covered financial company.

(2)

Convicted debtors

Except as provided in paragraph (3), a person may not purchase any asset of such institution from the receiver, if that person—

(A)

has been convicted of an offense under section 215, 656, 657, 1005, 1006, 1007, 1008, 1014, 1032, 1341, 1343, or 1344 of title 18, United States Code, or of conspiring to commit such an offense, affecting any covered financial company; and

(B)

is in default on any loan or other extension of credit from such covered financial company which, if not paid, will cause substantial loss to the Fund or the Corporation.

(3)

Settlement of claims

Paragraphs (1) and (2) shall not apply to the sale or transfer by the Corporation of any asset of any covered financial company to any person, if the sale or transfer of the asset resolves or settles, or is part of the resolution or settlement, of 1 or more claims that have been, or could have been, asserted by the Corporation against the person.

(4)

Definition of default

For purposes of this subsection, the term default means a failure to comply with the terms of a loan or other obligation to such an extent that the property securing the obligation is foreclosed upon.

(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.

211.

Miscellaneous provisions

(a)

Clarification of prohibition regarding concealment of assets from receiver or liquidating agent

Section 1032(1) of title 18, United States Code, is amended by inserting the Federal Deposit Insurance Corporation acting as receiver for a covered financial company, in accordance with title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, before or the National Credit.

(b)

Conforming amendment

Section 1032 of title 18, United States Code, is amended in the section heading, by striking of financial institution.

(c)

Federal deposit insurance corporation improvement Act of 1991

Section 403(a) of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4403(a)) is amended by inserting section 210(c) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, section 1367 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4617(d)), after section 11(e) of the Federal Deposit Insurance Act,.

(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.

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.

213.

Ban on certain activities by 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 subparagraph 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 (12 U.S.C. 1818(e)) 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.

214.

Prohibition on taxpayer funding

(a)

Liquidation required

All financial companies put into receivership under this title shall be liquidated. No taxpayer funds shall be used to prevent the liquidation of any financial company under this title.

(b)

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, or shall be the responsibility of the financial sector, through assessments.

(c)

No losses to taxpayers

Taxpayers shall bear no losses from the exercise of any authority under this title.

215.

Study on secured creditor haircuts

(a)

Study required

The Council shall conduct a study evaluating the importance of maximizing United States taxpayer protections and promoting market discipline with respect to the treatment of fully secured creditors in the utilization of the orderly liquidation authority authorized by this Act. In carrying out such study, the Council shall—

(1)

not be prejudicial to current or past laws or regulations with respect to secured creditor treatment in a resolution process;

(2)

study the similarities and differences between the resolution mechanisms authorized by the Bankruptcy Code, the Federal Deposit Insurance Corporation Improvement Act of 1991, and the orderly liquidation authority authorized by this Act;

(3)

determine how various secured creditors are treated in such resolution mechanisms and examine how a haircut (of various degrees) on secured creditors could improve market discipline and protect taxpayers;

(4)

compare the benefits and dynamics of prudent lending practices by depository institutions in secured loans for consumers and small businesses to the lending practices of secured creditors to large, interconnected financial firms;

(5)

consider whether credit differs according to different types of collateral and different terms and timing of the extension of credit; amd

(6)

include an examination of stakeholders who were unsecured or under-collateralized and seek collateral when a firm is failing, and the impact that such behavior has on financial stability and an orderly resolution that protects taxpayers if the firm fails.

(b)

Report

Not later than the end of the 1-year period beginning on the date of enactment of this Act, the Council shall issue a report to the Congress containing all findings and conclusions made by the Council in carrying out the study required under subsection (a).

216.

Study on bankruptcy process for financial and nonbank financial institutions

(a)

Study

(1)

In general

Upon enactment of this Act, the Board of Governors, in consultation with the Administrative Office of the United States Courts, shall conduct a study regarding the resolution of financial companies under the Bankruptcy Code, under chapter 7 or 11 thereof .

(2)

Issues to be studied

Issues to be studied under this section include—

(A)

the effectiveness of chapter 7 and chapter 11 of the Bankruptcy Code in facilitating the orderly resolution or reorganization of systemic financial companies;

(B)

whether a special financial resolution court or panel of special masters or judges should be established to oversee cases involving financial companies to provide for the resolution of such companies under the Bankruptcy Code, in a manner that minimizes adverse impacts on financial markets without creating moral hazard;

(C)

whether amendments to the Bankruptcy Code should be adopted to enhance the ability of the Code to resolve financial companies in a manner that minimizes adverse impacts on financial markets without creating moral hazard;

(D)

whether amendments should be made to the Bankruptcy Code, the Federal Deposit Insurance Act, and other insolvency laws to address the manner in which qualified financial contracts of financial companies are treated; and

(E)

the implications, challenges, and benefits to creating a new chapter or subchapter of the Bankruptcy Code to deal with financial companies.

(b)

Reports to Congress

Not later than 1 year after the date of enactment of this Act, and in each successive year until the fifth year after the date of enactment of this Act, the Administrative Office of the United States courts shall submit to the Committees on Banking, Housing, and Urban Affairs and the Judiciary of the Senate and the Committees on Financial Services and the Judiciary of the House of Representatives a report summarizing the results of the study conducted under subsection (a).

217.

Study on international coordination relating to bankruptcy process for nonbank financial institutions

(a)

Study

(1)

In general

The Board of Governors, in consultation with the Administrative Office of the United States Courts, shall conduct a study regarding international coordination relating to the resolution of systemic financial companies under the United States Bankruptcy Code and applicable foreign law.

(2)

Issues to be studied

With respect to the bankruptcy process for financial companies, issues to be studied under this section include—

(A)

the extent to which international coordination currently exists;

(B)

current mechanisms and structures for facilitating international cooperation;

(C)

barriers to effective international coordination; and

(D)

ways to increase and make more effective international coordination of the resolution of financial companies, so as to minimize the impact on the financial system without creating moral hazard.

(b)

Report to Congress

Not later than 1 year after the date of enactment of this Act, the Administrative office of the United States Courts shall submit to the Committees on Banking, Housing, and Urban Affairs and the Judiciary of the Senate and the Committees on Financial Services and the Judiciary of the House of Representatives a report summarizing the results of the study conducted under subsection (a).

III

Transfer of powers to the Comptroller of the Currency, the Corporation, and the Board of Governors

300.

Short title

This title may be cited as the Enhancing Financial Institution Safety and Soundness Act of 2010.

301.

Purposes

The purposes of this title are—

(1)

to provide for the safe and sound operation of the banking system of the United States;

(2)

to preserve and protect the dual system of Federal and State-chartered depository institutions;

(3)

to ensure the fair and appropriate supervision of each depository institution, regardless of the size or type of charter of the depository institution; and

(4)

to streamline and rationalize the supervision of depository institutions and the holding companies of depository institutions.

302.

Definition

In this title, the term transferred employee means, as the context requires, an employee transferred to the Office of the Comptroller of the Currency or the Corporation under section 322.

A

Transfer of powers and duties

311.

Transfer date

(a)

Transfer date

Except as provided in subsection (b), the term transfer date means the date that is 1 year after the date of enactment of this Act.

(b)

Extension permitted

(1)

Notice required

The Secretary, in consultation with the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the Chairman of the Board of Governors, and the Chairperson of the Corporation, may extend the period under subsection (a) and designate a transfer date that is not later than 18 months after the date of enactment of this Act, if the Secretary transmits to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives—

(A)

a written determination that commencement of the orderly process to implement this title is not feasible by the date that is 1 year after the date of enactment of this Act;

(B)

an explanation of why an extension is necessary to commence the process of orderly implementation of this title;

(C)

the transfer date designated under this subsection; and

(D)

a description of the steps that will be taken to initiate the process of an orderly and timely implementation of this title within the extended time period.

(2)

Publication of notice

Not later than 270 days after the date of enactment of this Act, the Secretary shall publish in the Federal Register notice of any transfer date designated under paragraph (1).

312.

Powers and duties transferred

(a)

Effective date

This section, and the amendments made by this section, shall take effect on the transfer date.

(b)

Functions of the Office of Thrift Supervision

(1)

Savings and loan holding company functions transferred

(A)

Transfer of functions

There are transferred to the Board of Governors all functions of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision (including the authority to issue orders) relating to—

(i)

the supervision of—

(I)

any savings and loan holding company; and

(II)

any subsidiary (other than a depository institution) of a savings and loan holding company; and

(ii)

all rulemaking authority of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision relating to savings and loan holding companies.

(B)

Powers, authorities, rights, and duties

The Board of Governors shall succeed to all powers, authorities, rights, and duties that were vested in the Office of Thrift Supervision and the Director of the Office of Thrift Supervision on the day before the transfer date relating to the functions and authority transferred under subparagraph (A).

(2)

All other functions transferred

(A)

Board of Governors

All rulemaking authority of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision under section 11 of the Home Owners’ Loan Act (12 U.S.C. 1468) relating to transactions with affiliates and extensions of credit to executive officers, directors, and principal shareholders and under section 5(q) of such Act relating to tying arrangements is transferred to the Board of Governors.

(B)

Comptroller of the Currency

Except as provided in paragraph (1) and subparagraph (A)—

(i)

there are transferred to the Office of the Comptroller of the Currency and the Comptroller of the Currency—

(I)

all functions of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision, respectively, relating to Federal savings associations; and

(II)

all rulemaking authority of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision, respectively, relating to savings associations; and

(ii)

the Office of the Comptroller of the Currency and the Comptroller of the Currency shall succeed to all powers, authorities, rights, and duties that were vested in the Office of Thrift Supervision and the Director of the Office of Thrift Supervision, respectively, on the day before the transfer date relating to the functions and authority transferred under clause (i).

(C)

Corporation

Except as provided in paragraph (1) and subparagraphs (A) and (B)—

(i)

all functions of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision relating to State savings associations are transferred to the Corporation; and

(ii)

the Corporation shall succeed to all powers, authorities, rights, and duties that were vested in the Office of Thrift Supervision and the Director of the Office of Thrift Supervision on the day before the transfer date relating to the functions transferred under clause (i).

(c)

Conforming amendments

Section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) is amended—

(1)

in subsection (q), by striking paragraphs (1) through (4) and inserting the following:

(1)

the Office of the Comptroller of the Currency, in the case of—

(A)

any national banking association;

(B)

any Federal branch or agency of a foreign bank; and

(C)

any Federal savings association;

(2)

the Federal Deposit Insurance Corporation, in the case of—

(A)

any State nonmember insured bank;

(B)

any foreign bank having an insured branch; and

(C)

any State savings association;

(3)

the Board of Governors of the Federal Reserve System, in the case of—

(A)

any State member bank;

(B)

any branch or agency of a foreign bank with respect to any provision of the Federal Reserve Act which is made applicable under the International Banking Act of 1978;

(C)

any foreign bank which does not operate an insured branch;

(D)

any agency or commercial lending company other than a Federal agency;

(E)

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, including such proceedings under the Financial Institutions Supervisory Act of 1966;

(F)

any bank holding company and any subsidiary (other than a depository institution) of a bank holding company; and

(G)

any savings and loan holding company and any subsidiary (other than a depository institution) of a savings and loan holding company.

; and

(2)

in paragraphs (1) and (3) of subsection (u), by striking (other than a bank holding company and inserting (other than a bank holding company or savings and loan holding company.

(d)

Consumer protection

Nothing in this section may be construed to limit or otherwise affect the transfer of powers under title X.

313.

Abolishment

Effective 90 days after the transfer date, the Office of Thrift Supervision and the position of Director of the Office of Thrift Supervision are abolished.

314.

Amendments to the revised statutes

(a)

Amendment to section 324

Section 324 of the Revised Statutes of the United States (12 U.S.C. 1) is amended to read as follows:

324.

Comptroller of the Currency

(a)

Office of the Comptroller of the Currency established

There is established in the Department of the Treasury a bureau to be known as the Office of the Comptroller of the Currency which is charged with assuring the safety and soundness of, and compliance with laws and regulations, fair access to financial services, and fair treatment of customers by, the institutions and other persons subject to its jurisdiction.

(b)

Comptroller of the Currency

(1)

In general

The chief officer of the Office of the Comptroller of the Currency shall be known as the Comptroller of the Currency. The Comptroller of the Currency shall perform the duties of the Comptroller of the Currency under the general direction of the Secretary of the Treasury. The Secretary of the Treasury may not delay or prevent the issuance of any rule or the promulgation of any regulation by the Comptroller of the Currency, and may not intervene in any matter or proceeding before the Comptroller of the Currency (including agency enforcement actions), unless otherwise specifically provided by law.

(2)

Additional authority

The Comptroller of the Currency shall have the same authority with respect to functions transferred to the Comptroller of the Currency under the Enhancing Financial Institution Safety and Soundness Act of 2010 as was vested in the Director of the Office of Thrift Supervision on the transfer date, as defined in section 311 of that Act.

.

(b)

Supervision of Federal savings associations

Chapter 9 of title VII of the Revised Statutes of the United States (12 U.S.C. 1 et seq.) is amended by inserting after section 327A (12 U.S.C. 4a) the following:

327B.

Deputy Comptroller for the supervision and examination of Federal savings associations

The Comptroller of the Currency shall designate a Deputy Comptroller, who shall be responsible for the supervision and examination of Federal savings associations.

.

(c)

Amendment to section 329

Section 329 of the Revised Statutes of the United States (12 U.S.C. 11) is amended by inserting before the period at the end the following: or any Federal savings association.

(d)

Effective date

This section, and the amendments made by this section, shall take effect on the transfer date.

315.

Federal information policy

Section 3502(5) of title 44, United States Code, is amended by inserting Office of the Comptroller of the Currency, after the Securities and Exchange Commission,.

316.

Savings provisions

(a)

Office of thrift supervision

(1)

Existing rights, duties, and obligations not affected

Sections 312(b) and 313 shall 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 existed on the day before the transfer date.

(2)

Continuation of suits

This title shall not abate any action or proceeding commenced by or against the Director of the Office of Thrift Supervision or the Office of Thrift Supervision before the transfer date, except that—

(A)

for any action or proceeding arising out of a function of the Office of Thrift Supervision or the Director of the Office of Thrift Supervision transferred to the Board of Governors by this title, the Board of Governors shall be substituted for the Office of Thrift Supervision or the Director of the Office of Thrift Supervision as a party to the action or proceeding on and after the transfer date;

(B)

for any action or proceeding arising out of a function of the Office of Thrift Supervision or the Director of the Office of Thrift Supervision transferred to the Office of the Comptroller of the Currency or the Comptroller of the Currency by this title, the Office of the Comptroller of the Currency or the Comptroller of the Currency shall be substituted for the Office of Thrift Supervision or the Director of the Office of Thrift Supervision, as the case may be, as a party to the action or proceeding on and after the transfer date; and

(C)

for any action or proceeding arising out of a function of the Office of Thrift Supervision or the Director of the Office of Thrift Supervision transferred to the Corporation by this title, the Corporation shall be substituted for the Office of Thrift Supervision or the Director of the Office of Thrift Supervision as a party to the action or proceeding on and after the transfer date.

(b)

Continuation of existing OTS orders, resolutions, determinations, agreements, regulations, etc

All orders, resolutions, determinations, agreements, and regulations, interpretative rules, other interpretations, guidelines, procedures, and other advisory materials, that have been issued, made, prescribed, or allowed to become effective by the Office of Thrift Supervision or the Director of the Office of Thrift Supervision, or by a court of competent jurisdiction, in the performance of functions that are transferred by this title and that are in effect on the day before the transfer date, shall continue in effect according to the terms of such orders, resolutions, determinations, agreements, and regulations, interpretative rules, other interpretations, guidelines, procedures, and other advisory materials, and shall be enforceable by or against—

(1)

the Board of Governors, in the case of a function of the Office of Thrift Supervision or the Director of the Office of Thrift Supervision transferred to the Board of Governors, until modified, terminated, set aside, or superseded in accordance with applicable law by the Board of Governors, by any court of competent jurisdiction, or by operation of law;

(2)

the Office of the Comptroller of the Currency or the Comptroller of the Currency, in the case of a function of the Office of Thrift Supervision or the Director of the Office of Thrift Supervision transferred to the Office of the Comptroller of the Currency or the Comptroller of the Currency, respectively, until modified, terminated, set aside, or superseded in accordance with applicable law by the Office of the Comptroller of the Currency or the Comptroller of the Currency, by any court of competent jurisdiction, or by operation of law; and

(3)

the Corporation, in the case of a function of the Office of Thrift Supervision or the Director of the Office of Thrift Supervision transferred to the Corporation, until modified, terminated, set aside, or superseded in accordance with applicable law by the Corporation, by any court of competent jurisdiction, or by operation of law.

(c)

Identification of regulations continued

(1)

By the Board of Governors

Not later than the transfer date, the Board of Governors shall—

(A)

identify the regulations continued under subsection (b) that will be enforced by the Board of Governors; and

(B)

publish a list of the regulations identified under subparagraph (A) in the Federal Register.

(2)

By office of the comptroller of the currency

Not later than the transfer date, the Office of the Comptroller of the Currency shall—

(A)

after consultation with the Corporation, identify the regulations continued under subsection (b) that will be enforced by the Office of the Comptroller of the Currency; and

(B)

publish a list of the regulations identified under subparagraph (A) in the Federal Register.

(3)

By the corporation

Not later than the transfer date, the Corporation shall—

(A)

after consultation with the Office of the Comptroller of the Currency, identify the regulations continued under subsection (b) that will be enforced by the Corporation; and

(B)

publish a list of the regulations identified under subparagraph (A) in the Federal Register.