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H.R. 4173 (111th): Dodd-Frank Wall Street Reform and Consumer Protection Act


The text of the bill below is as of Dec 11, 2009 (Passed the House).

Summary of this bill

Source: Wikipedia

The Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111–203, H.R. 4173, commonly referred to as Dodd–Frank) was signed into United States federal law by US President Barack Obama on July 21, 2010. Passed in response to the 2008 global financial crisis, the Act brought the most significant changes to financial regulation in the nation since the regulatory reform that came following the Great Recession. It made changes in the American financial regulatory environment affecting all federal financial regulatory agencies and almost every part of the nation's financial services industry.

The law was initially proposed by the Obama administration in June 2009, when ...


I

111th CONGRESS

1st Session

H. R. 4173

IN THE HOUSE OF REPRESENTATIVES

AN ACT

To provide for financial regulatory reform, to protect consumers and investors, to enhance Federal understanding of insurance issues, to regulate the over-the-counter derivatives markets, and for other purposes.

1.

Short title

This Act may be cited as the Wall Street Reform and Consumer Protection Act of 2009.

2.

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Title I—Financial stability improvement Act

Sec. 1000. Short title; definitions.

Sec. 1000A. Restrictions on the Federal Reserve System pending audit report.

Subtitle A—The Financial Services Oversight Council

Sec. 1001. Financial Services Oversight Council established.

Sec. 1002. Resolution of disputes among Federal financial regulatory agencies.

Sec. 1003. Technical and professional advisory committees.

Sec. 1004. Financial Services Oversight Council meetings and council governance.

Sec. 1005. Council staff and funding.

Sec. 1006. Reports to the Congress.

Sec. 1007. Applicability of certain Federal laws.

Sec. 1008. Oversight by GAO.

Subtitle B—Prudential regulation of companies and activities for financial stability purposes

Sec. 1100. Federal Reserve Board authority that of agent acting on behalf of Council.

Sec. 1101. Council and Board authority to obtain information.

Sec. 1102. Council prudential regulation recommendations to Federal financial regulatory agencies; agency authority.

Sec. 1103. Subjecting financial companies to stricter prudential standards for financial stability purposes.

Sec. 1104. Stricter prudential standards for certain financial holding companies for financial stability purposes.

Sec. 1105. Mitigation of systemic risk.

Sec. 1106. Subjecting activities or practices to stricter prudential standards for financial stability purposes.

Sec. 1107. Stricter regulation of activities and practices for financial stability purposes.

Sec. 1108. Effect of rescission of identification.

Sec. 1109. Emergency financial stabilization.

Sec. 1110. Additional related amendments.

Sec. 1111. Corporation may receive warrants when paying or risking taxpayer funds.

Sec. 1112. Examinations and enforcement actions for insurance and resolutions purposes.

Sec. 1113. Study of the effects of size and complexity of financial institutions on capital market efficiency and economic growth.

Sec. 1114. Exercise of Federal Reserve authority.

Sec. 1115. Stress tests.

Sec. 1116. Contingent Capital.

Sec. 1117. Restriction on proprietary trading by designated financial holding companies.

Sec. 1118. Rule of construction.

Sec. 1119. Antitrust savings clause.

Subtitle C—Improvements to supervision and regulation of Federal depository institutions

Sec. 1201. Definitions.

Sec. 1202. Amendments to the Home Owners’ Loan Act relating to transfer of functions.

Sec. 1203. Amendments to the revised statutes.

Sec. 1204. Power and duties transferred.

Sec. 1205. Transfer date.

Sec. 1206. Expiration of term of comptroller.

Sec. 1207. Office of Thrift Supervision abolished.

Sec. 1208. Savings provisions.

Sec. 1209. Regulations and orders.

Sec. 1210. Coordination of transition activities.

Sec. 1211. Interim responsibilities of office of the comptroller of the currency and office of thrift supervision.

Sec. 1212. Employees transferred.

Sec. 1213. Property transferred.

Sec. 1214. Funds transferred.

Sec. 1215. Disposition of affairs.

Sec. 1216. Continuation of services.

Sec. 1217. Contracting and leasing authority.

Sec. 1218. Treatment of savings and loan holding companies.

Sec. 1219. Practices of certain mutual thrift holding companies preserved.

Sec. 1220. Implementation plan and reports.

Sec. 1221. Composition of board of directors of the Federal Deposit Insurance Corporation.

Sec. 1222. Amendments to section 3.

Sec. 1223. Amendments to section 7.

Sec. 1224. Amendments to section 8.

Sec. 1225. Amendments to section 11.

Sec. 1226. Amendments to section 13.

Sec. 1227. Amendments to section 18.

Sec. 1228. Amendments to section 28.

Sec. 1229. Amendments to the Alternative Mortgage Transaction Parity Act of 1982.

Sec. 1230. Amendments to the Bank Holding Company Act of 1956.

Sec. 1231. Amendments to the Bank Protection Act of 1968.

Sec. 1232. Amendments to the Bank Service Company Act.

Sec. 1233. Amendments to the Community Reinvestment Act of 1977.

Sec. 1234. Amendments to the Depository Institution Management Interlocks Act.

Sec. 1235. Amendments to the Emergency Homeowners’ Relief Act.

Sec. 1236. Amendments to the Equal Credit Opportunity Act.

Sec. 1237. Amendments to the Federal Credit Union Act.

Sec. 1238. Amendments to the Federal Financial Institutions Examination Council Act of 1978.

Sec. 1239. Amendments to the Federal Home Loan Bank Act.

Sec. 1240. Amendments to the Federal Reserve Act.

Sec. 1241. Amendments to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

Sec. 1242. Amendments to the Housing Act of 1948.

Sec. 1243. Amendments to the Housing and Community Development Act of 1992 and the Federal Housing Enterprises Financial Safety and Soundness Act of 1992.

Sec. 1244. Amendment to the Housing and Urban-Rural Recovery Act of 1983.

Sec. 1245. Amendments to the National Housing Act.

Sec. 1246. Amendments to the Right to Financial Privacy Act of 1978.

Sec. 1247. Amendments to the Balanced Budget and Emergency Deficit Control Act of 1985.

Sec. 1248. Amendments to the Crime Control Act of 1990.

Sec. 1249. Amendment to the Flood Disaster Protection Act of 1973.

Sec. 1250. Amendment to the Investment Company Act of 1940.

Sec. 1251. Amendment to the Neighborhood Reinvestment Corporation Act.

Sec. 1252. Amendments to the Securities Exchange Act of 1934.

Sec. 1253. Amendments to title 18, United States Code.

Sec. 1254. Amendments to title 31, United States Code.

Sec. 1255. Requirement for Countercyclical Capital Requirements.

Sec. 1256. Transfer of authority to the Board with respect to savings and loan holding companies.

Sec. 1257. Effective date.

Subtitle D—Further improvements to the regulation of bank holding companies and depository institutions

Sec. 1301. Treatment of industrial loan companies, savings associations, and certain other companies under the bank holding company act.

Sec. 1302. Registration of certain companies as bank holding companies.

Sec. 1303. Reports and examinations of bank holding companies; regulation of functionally regulated subsidiaries.

Sec. 1304. Requirements for financial holding companies to remain well capitalized and well managed.

Sec. 1305. Standards for interstate acquisitions.

Sec. 1306. Enhancing existing restrictions on bank transactions with affiliates.

Sec. 1307. Eliminating exceptions for transactions with financial subsidiaries.

Sec. 1308. Lending limits applicable to credit exposure on derivative transactions, repurchase agreements, reverse repurchase agreements, and securities lending and borrowing transactions.

Sec. 1309. Restriction on conversions of troubled banks and thrifts.

Sec. 1310. Lending limits to insiders.

Sec. 1311. Limitations on purchases of assets from insiders.

Sec. 1312. Rules regarding capital levels of bank holding companies.

Sec. 1313. Enhancements to factors to be considered in certain acquisitions.

Sec. 1314. Elimination of elective investment bank holding company framework.

Sec. 1315. Examination fees for large bank holding companies.

Sec. 1316. Mutual national banks and Federal mutual bank holding companies authorized.

Sec. 1317.  Nationwide Deposit Cap for Interstate Acquisitions.

Sec. 1318. De novo branching into states.

Subtitle E—Improvements to the Federal Deposit Insurance Fund

Sec. 1401. Accounting for actual risk to the Deposit Insurance Fund.

Sec. 1402. Creating a risk-focused assessment base.

Sec. 1403. Elimination of procyclical assessments.

Sec. 1404. Enhanced access to information for deposit insurance purposes.

Sec. 1405. Transition reserve ratio requirements to reflect new assessment base.

Subtitle F—Improvements to the asset-Backed securitization process

Sec. 1501. Short title.

Sec. 1502. Credit risk retention.

Sec. 1503. Periodic and other reporting under the Securities Exchange Act of 1934 for asset-backed securities.

Sec. 1504. Representations and warranties in asset-backed offerings.

Sec. 1505. Exempted transactions under the Securities Act of 1933.

Sec. 1506. Study on the macroeconomic effects of risk retention requirements.

Subtitle G—Enhanced dissolution authority

Sec. 1601. Short title; Purpose.

Sec. 1602. Definitions.

Sec. 1603. Systemic risk determination.

Sec. 1604. Dissolution; stabilization.

Sec. 1605. Judicial review.

Sec. 1606. Directors not liable for acquiescing in appointment of receiver.

Sec. 1607. Termination and exclusion of other actions.

Sec. 1608. Rulemaking.

Sec. 1609. Powers and duties of corporation.

Sec. 1610. Clarification of prohibition regarding concealment of assets from receiver or liquidating agent.

Sec. 1611. Office of Dissolution.

Sec. 1612. Miscellaneous provisions.

Sec. 1613. Amendment to Federal Deposit Insurance Act.

Sec. 1614. Application of executive compensation limitations.

Sec. 1615. Study on the effect of safe harbor provisions in insolvency cases.

Sec. 1616. Treasury study.

Sec. 1617. Priority of claims in federal deposit insurance act.

Subtitle H—Additional improvements for financial crisis management

Sec. 1701. Additional improvements for financial crisis management.

Sec. 1702. Certain restrictions related to foreign currency swap authority.

Sec. 1703. Additional oversight of financial regulatory system.

Subtitle I—Miscellaneous

Sec. 1801. Inclusion of minorities and women; Diversity in agency workforce.

Sec. 1802. Federal Housing Finance Agency advisory role in FIEC.

Subtitle J—International policy coordination

Sec. 1901. International policy coordination.

Subtitle K—International financial provisions

Sec. 1951. Access to United States financial market by foreign institutions.

Sec. 1952. Reducing TARP funds to offset costs.

Subtitle L—Securities holding companies

Sec. 1961. Securities holding companies.

Title II—Corporate and Financial Institution Compensation Fairness Act

Sec. 2001. Short title.

Sec. 2002. Shareholder vote on executive compensation disclosures.

Sec. 2003. Compensation committee independence.

Sec. 2004. Enhanced compensation structure reporting to reduce perverse incentives.

Title III—Derivative Markets Transparency and Accountability Act

Sec. 3001. Short title.

Sec. 3002. Review of regulatory authority.

Sec. 3003. International harmonization.

Sec. 3004. Prohibition against government assistance.

Sec. 3005. Studies.

Sec. 3006. Recommendations for changes to insolvency laws.

Sec. 3007. Abusive swaps.

Sec. 3008. Authority to prohibit participation in swap activities.

Sec. 3009. Memorandum.

Subtitle A—Regulation of Swap Markets

Sec. 3101. Definitions.

Sec. 3102. Jurisdiction.

Sec. 3103. Clearing and execution transparency.

Sec. 3104. Public reporting of aggregate swap data.

Sec. 3105. Swap repositories.

Sec. 3106. Reporting and recordkeeping.

Sec. 3107. Registration and regulation of swap dealers and major swap participants.

Sec. 3108. Conflicts of interest.

Sec. 3109. Swap execution facilities.

Sec. 3110. Derivatives transaction execution facilities and exempt boards of trade.

Sec. 3111. Designated contract markets.

Sec. 3112. Margin.

Sec. 3113. Position limits.

Sec. 3114. Enhanced authority over registered entities.

Sec. 3115. Foreign boards of trade.

Sec. 3116. Legal certainty for swaps.

Sec. 3117. FDICIA amendments.

Sec. 3118. Enforcement authority.

Sec. 3119. Enforcement.

Sec. 3120. Retail commodity transactions.

Sec. 3121. Large swap trader reporting.

Sec. 3122. Segregation of assets held as collateral in swap transactions.

Sec. 3123. Other authority.

Sec. 3124. Antitrust.

Sec. 3125. Review of prior actions.

Sec. 3126. Expedited process.

Sec. 3127. Effective date.

Subtitle B—Regulation of Security-Based Swap Markets

Sec. 3201. Definitions under the Securities Exchange Act of 1934.

Sec. 3202. Repeal of prohibition on regulation of security-based swaps.

Sec. 3203. Amendments to the Securities Exchange Act of 1934.

Sec. 3204. Registration and regulation of swap dealers and major swap participants.

Sec. 3205. Reporting and recordkeeping.

Sec. 3206. State gaming and bucket shop laws.

Sec. 3207. Amendments to the Securities Act of 1933; treatment of security-based swaps.

Sec. 3208. Other authority.

Sec. 3209. Jurisdiction.

Sec. 3210. Effective date.

Subtitle C—Improved financial and commodity markets oversight and accountability

Sec. 3301. Elevation of certain Inspectors General to appointment pursuant to section 3 of the Inspector General Act of 1978.

Sec. 3302. Continuation of provisions relating to personnel.

Sec. 3303. Corrective responses by heads of certain establishments to deficiencies identified by Inspectors General.

Sec. 3304. Effective date; transition rule.

Sec. 3305. Authority of the Commodity Futures Trading Commission to define commercial risk, operating risk, and balance sheet risk.

Sec. 3306.  Conflicts of interest in clearing organizations.

Sec. 3307. Definitions of major swap participant and major security-based swap participant.

Title IV—Consumer Financial Protection Agency Act

Sec. 4001. Short title.

Sec. 4002. Definitions.

Subtitle A—Establishment of the Agency

Sec. 4101. Establishment of the Consumer Financial Protection Agency.

Sec. 4102. Director.

Sec. 4103. Establishment and composition of the commission.

Sec. 4104. Consumer Financial Protection Oversight Board.

Sec. 4105. Executive and administrative powers.

Sec. 4106. Administration.

Sec. 4107. Consumer Advisory Board.

Sec. 4108. Coordination.

Sec. 4109. Reports to the Congress.

Sec. 4110. GAO small business studies.

Sec. 4111. Funding; fees and assessments; penalties and fines.

Sec. 4112. Amendments relating to other administrative provisions.

Sec. 4113. Oversight by GAO.

Sec. 4114. Effective date.

Subtitle B—General Powers of the Director and Agency

Sec. 4201. Mandate and objectives.

Sec. 4202. Authorities.

Sec. 4203. Examination and enforcement for small banks, thrifts, and credit unions.

Sec. 4204. Simultaneous and coordinated supervisory action.

Sec. 4205. Limitations on authority of agency and director.

Sec. 4206. Collection of information; confidentiality regulations.

Sec. 4207. Monitoring; assessments of significant regulations; reports.

Sec. 4208. Authority to restrict mandatory predispute arbitration.

Sec. 4209. Registration and supervision of nondepository covered persons.

Sec. 4210. Effective date.

Subtitle C—Specific Authorities

Sec. 4301. Prohibiting unfair, deceptive, or abusive acts or practices.

Sec. 4302. Disclosures.

Sec. 4303. Sales practices.

Sec. 4304. Pilot disclosures.

Sec. 4305. Adopting operational standards to deter unfair, deceptive, or abusive practices.

Sec. 4306. Duties.

Sec. 4307. Consumer rights to access information.

Sec. 4308. Prohibited acts.

Sec. 4309. Treatment of remittance transfers.

Sec. 4310. Effective date.

Sec. 4311. No authority to require the offering of financial products or services.

Sec. 4312. Appraisal independence requirements.

Sec. 4313. Overdraft protection notice requirements.

Sec. 4314. Review, report, and program with respect to exchange facilitators.

Sec. 4315. Regulation of person-to-person lending.

Sec. 4316. Treatment of reverse mortgages.

Subtitle D—Preservation of State Law

Sec. 4401. Relation to State law.

Sec. 4402. Preservation of enforcement powers of States.

Sec. 4403. Preservation of existing contracts.

Sec. 4404. State law preemption standards for national banks and subsidiaries clarified.

Sec. 4405. Visitorial standards.

Sec. 4406. Clarification of law applicable to nondepository institution subsidiaries.

Sec. 4407. State law preemption standards for Federal savings associations and subsidiaries clarified.

Sec. 4408. Visitorial standards.

Sec. 4409. Clarification of law applicable to nondepository institution subsidiaries.

Sec. 4410. Effective date.

Subtitle E—Enforcement Powers

Sec. 4501. Definitions.

Sec. 4502. Investigations and administrative discovery.

Sec. 4503. Hearings and adjudication proceedings.

Sec. 4504. Litigation authority.

Sec. 4505. Relief available.

Sec. 4506. Referrals for criminal proceedings.

Sec. 4507. Employee protection.

Sec. 4508. No private right of action.

Sec. 4509. Effective date.

Subtitle F—Transfer of Functions and Personnel; Transitional Provisions

Sec. 4601. Transfer of certain functions.

Sec. 4602. Designated transfer date.

Sec. 4603. Savings provisions.

Sec. 4604. Transfer of certain personnel.

Sec. 4605. Incidental transfers.

Sec. 4606. Interim authority of the Secretary.

Subtitle G—Regulatory Improvements

Sec. 4701. Collection of deposit account data.

Sec. 4702. Small business data collection.

Sec. 4703. Annual financial autopsy.

Sec. 4704. Reporting of mortgage data by State.

Subtitle H—Conforming Amendments

Sec. 4801. Amendments to the Inspector General Act of 1978.

Sec. 4802. Amendments to the Privacy Act of 1974.

Sec. 4803. Amendments to the Alternative Mortgage Transaction Parity Act of 1982.

Sec. 4804. Amendments to the Consumer Credit Protection Act.

Sec. 4805. Amendments to the Expedited Funds Availability Act.

Sec. 4806. Amendments to the Federal Deposit Insurance Act.

Sec. 4807. Amendments to the Gramm-Leach-Bliley Act.

Sec. 4808. Amendments to the Home Mortgage Disclosure Act of 1975.

Sec. 4809. Amendments to division D of the Omnibus Appropriations Act, 2009.

Sec. 4810. Amendments to the Homeowners Protection Act of 1998.

Sec. 4811. Amendments to the Real Estate Settlement Procedures Act of 1974.

Sec. 4812. Amendments to the Right to Financial Privacy Act of 1978.

Sec. 4813. Amendments to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.

Sec. 4814. Amendments to the Truth in Savings Act.

Sec. 4815. Amendments to the Telemarketing and Consumer Fraud Abuse and Prevention Act.

Sec. 4816. Membership in Financial Literacy and Education Commission.

Sec. 4817. Effective date.

Sec. 4818. Amendments to Truth in Lending Act.

Subtitle I—Improvements to the Federal Trade Commission Act

Sec. 4901. Amendments to the Federal Trade Commission Act.

Subtitle J—Miscellaneous

Sec. 4951. Requirements for State-licensed loan originators.

Title V—Capital Markets

Subtitle A—Private Fund Investment Advisers Registration Act

Sec. 5001. Short title.

Sec. 5002. Definitions.

Sec. 5003. Elimination of private adviser exemption; Limited exemption for foreign private fund advisers; Limited intrastate exemption.

Sec. 5004. Collection of data.

Sec. 5005. Elimination of disclosure provision.

Sec. 5006. Exemption of and reporting by venture capital fund advisers.

Sec. 5007. Exemption of and reporting by certain private fund advisers.

Sec. 5008. Clarification of rulemaking authority.

Sec. 5009. GAO study.

Sec. 5010. Effective date; Transition period.

Sec. 5011. Qualified client standard.

Subtitle B—Accountability and Transparency in Rating Agencies Act

Sec. 6001. Short title.

Sec. 6002. Enhanced regulation of nationally recognized statistical rating organizations.

Sec. 6003. Standards for private actions.

Sec. 6004. Issuer disclosure of preliminary ratings.

Sec. 6005. Change to designation.

Sec. 6006. Timeline for regulations.

Sec. 6007. Elimination of exemption from fair disclosure rule.

Sec. 6008. Advisory Board.

Sec. 6009. Removal of statutory references to credit ratings.

Sec. 6010. Review of reliance on ratings.

Sec. 6011. Publication of rating histories on the EDGAR system.

Sec. 6012. Effect of Rule 436(g).

Sec. 6013. Studies.

Subtitle C—Investor Protection Act

Sec. 7001. Short title.

Part 1—Disclosure

Sec. 7101. Investor Advisory Committee established.

Sec. 7102. Clarification of the Commission’s authority to engage in consumer testing.

Sec. 7103. Establishment of a fiduciary duty for brokers, dealers, and investment advisers, and harmonization of regulation.

Sec. 7104. Commission study and rulemaking on disclosure to retail customers before purchase of products or services.

Sec. 7105. Beneficial ownership and short-swing profit reporting.

Sec. 7106. Revision to recordkeeping rules.

Sec. 7107. Study on enhancing investment adviser examinations.

Sec. 7108. GAO study of financial planning.

Part 2—Enforcement and Remedies

Sec. 7201. Authority to restrict mandatory pre-dispute arbitration.

Sec. 7202. Comptroller General study to review securities arbitration system.

Sec. 7203. Whistleblower protection.

Sec. 7204. Conforming amendments for whistleblower protection.

Sec. 7205. Implementation and transition provisions for whistleblower protections.

Sec. 7206. Collateral bars.

Sec. 7207. Aiding and abetting authority under the Securities Act and the Investment Company Act.

Sec. 7208. Authority to impose penalties for aiding and abetting violations of the Investment Advisers Act.

Sec. 7209. Deadline for completing examinations, inspections and enforcement actions.

Sec. 7210. Nationwide service of subpoenas.

Sec. 7211. Authority to impose civil penalties in cease and desist proceedings.

Sec. 7212. Formerly associated persons.

Sec. 7213. Sharing privileged information with other authorities.

Sec. 7214. Expanded access to grand jury information.

Sec. 7215. Aiding and abetting standard of knowledge satisfied by recklessness.

Sec. 7216. Extraterritorial jurisdiction of the antifraud provisions of the Federal securities laws.

Sec. 7217. Fidelity bonding.

Sec. 7218. Enhanced SEC authority to conduct surveillance and risk assessment.

Sec. 7219. Investment company examinations.

Sec. 7220. Control person liability under the Securities Exchange Act.

Sec. 7221. Enhanced application of anti-fraud provisions.

Sec. 7222. SEC authority to issue rules on proxy access.

Part 3—Commission funding and organization

Sec. 7301. Authorization of appropriations.

Sec. 7302. Investment adviser regulation funding.

Sec. 7303. Amendments to section 31 of the Securities Exchange Act of 1934.

Sec. 7304. Commission organizational study and reform.

Sec. 7305. Capital Markets Safety Board.

Sec. 7306. Report on implementation of post-Madoff reforms.

Sec. 7307. Joint Advisory Committee.

Part 4—Additional Commission reforms

Sec. 7401. Regulation of securities lending.

Sec. 7402. Lost and stolen securities.

Sec. 7403. Fingerprinting.

Sec. 7404. Equal treatment of self-regulatory organization rules.

Sec. 7405. Clarification that section 205 of the Investment Advisers Act of 1940 does not apply to State-registered advisers.

Sec. 7406. Conforming amendments for the repeal of the Public Utility Holding Company Act of 1935.

Sec. 7407. Promoting transparency in financial reporting.

Sec. 7408. Unlawful margin lending.

Sec. 7409. Protecting confidentiality of materials submitted to the Commission.

Sec. 7410. Technical corrections.

Sec. 7411. Municipal securities.

Sec. 7412. Interested person definition.

Sec. 7413. Rulemaking authority to protect redeeming investors.

Sec. 7414. Study on SEC revolving door.

Sec. 7415. Study on internal control evaluation and reporting cost burdens on smaller issuers.

Sec. 7416. Analysis of rule regarding smaller reporting companies.

Sec. 7417. Financial Reporting Forum.

Sec. 7418. Investment advisers subject to State authorities.

Sec. 7419. Custodial requirements.

Sec. 7420. Ombudsman.

Sec. 7421. Notice to missing security holders.

Sec. 7422. Short sale reforms.

Sec. 7423. Streamlining of SEC filing procedures.

Part 5—Securities Investor Protection Act amendments

Sec. 7501. Increasing the minimum assessment paid by SIPC members.

Sec. 7502. Increasing the borrowing limit on treasury loans.

Sec. 7503. Increasing the cash limit of protection.

Sec. 7504. SIPC as trustee in SIPA liquidation proceedings.

Sec. 7505. Insiders ineligible for SIPC advances.

Sec. 7506. Eligibility for direct payment procedure.

Sec. 7507. Increasing the fine for prohibited acts under SIPA.

Sec. 7508. Penalty for misrepresentation of SIPC membership or protection.

Sec. 7509. Futures held in a portfolio margin securities account protection.

Sec. 7510. Study and report on the feasibility of risk-based assessments for SIPC members.

Part 6—Sarbanes-Oxley Act Amendments

Sec. 7601. Public Company Accounting Oversight Board oversight of auditors of brokers and dealers.

Sec. 7602. Foreign regulatory information sharing.

Sec. 7603. Expansion of audit information to be produced and exchanged with foreign counterparts.

Sec. 7604. Conforming amendment related to registration.

Sec. 7605. Fair fund amendments.

Sec. 7606. Exemption for nonaccelerated filers.

Sec. 7607. Whistleblower protection against retaliation by a subsidiary of an issuer.

Sec. 7608. Congressional access to information.

Sec. 7609. Creation of ombudsman for the PCAOB.

Sec. 7610. Auditing Oversight Board.

Part 7—Senior Investment Protection

Sec. 7701. Findings.

Sec. 7702. Definitions.

Sec. 7703. Grants to States for enhanced protection of seniors from being misled by false designations.

Sec. 7704. Applications.

Sec. 7705. Length of participation.

Sec. 7706. Authorization of appropriations.

Part 8—Registration of Municipal Financial Advisors

Sec. 7801. Municipal financial adviser registration requirement.

Sec. 7802. Conforming amendments.

Sec. 7803. Effective dates.

Title VI—Federal Insurance Office

Sec. 8001. Short title.

Sec. 8002. Federal Insurance Office established.

Sec. 8003. Report on global reinsurance market.

Sec. 8004. Study on modernization and improvement of insurance regulation in the United States.

Sec. 8005. Sense of Congress regarding simplified mortgage contract summaries.

Title VII—Mortgage Reform and Anti-Predatory Lending Act

Sec. 9000. Short title; designation as enumerated consumer law.

Subtitle A—Residential Mortgage Loan Origination Standards

Sec. 9001. Definitions.

Sec. 9002. Residential mortgage loan origination.

Sec. 9003. Prohibition on steering incentives.

Sec. 9004. Liability.

Sec. 9005. Regulations.

Sec. 9006. Study of shared appreciation mortgages.

Subtitle B—Minimum Standards For Mortgages

Sec. 9101. Ability to repay.

Sec. 9102. Net tangible benefit for refinancing of residential mortgage loans.

Sec. 9103. Safe harbor and rebuttable presumption.

Sec. 9104. Liability.

Sec. 9105. Defense to foreclosure.

Sec. 9106. Additional standards and requirements.

Sec. 9107. Rule of construction.

Sec. 9108. Effect on State laws.

Sec. 9109. Regulations.

Sec. 9110. Amendments to civil liability provisions.

Sec. 9111. Lender rights in the context of borrower deception.

Sec. 9112. Six-month notice required before reset of hybrid adjustable rate mortgages.

Sec. 9113. Required disclosures.

Sec. 9114. Disclosures required in monthly statements for residential mortgage loans.

Sec. 9115. Legal assistance for foreclosure-related issues.

Sec. 9116. Effective date.

Sec. 9117. Report by the GAO.

Sec. 9118. State Attorney General enforcement authority.

Subtitle C—High-Cost Mortgages

Sec. 9201. Definitions relating to high-cost mortgages.

Sec. 9202. Amendments to existing requirements for certain mortgages.

Sec. 9203. Additional requirements for certain mortgages.

Sec. 9204. Regulations.

Sec. 9205. Effective date.

Subtitle D—Office of Housing Counseling

Sec. 9301. Short title.

Sec. 9302. Establishment of Office of Housing Counseling.

Sec. 9303. Counseling procedures.

Sec. 9304. Grants for housing counseling assistance.

Sec. 9305. Requirements to use HUD-certified counselors under HUD programs.

Sec. 9306. Study of defaults and foreclosures.

Sec. 9307. Default and foreclosure database.

Sec. 9308. Definitions for counseling-related programs.

Sec. 9309. Accountability and transparency for grant recipients.

Sec. 9310. Updating and simplification of mortgage information booklet.

Sec. 9311. Home inspection counseling.

Sec. 9312. Warnings to homeowners of foreclosure rescue scams.

Subtitle E—Mortgage Servicing

Sec. 9401. Escrow and impound accounts relating to certain consumer credit transactions.

Sec. 9402. Disclosure notice required for consumers who waive escrow services.

Sec. 9403. Real Estate Settlement Procedures Act of 1974 amendments.

Sec. 9404. Truth in Lending Act amendments.

Sec. 9405. Escrows included in repayment analysis.

Subtitle F—Appraisal Activities

Sec. 9501. Property appraisal requirements.

Sec. 9502. Unfair and deceptive practices and acts relating to certain consumer credit transactions.

Sec. 9503. Amendments relating to Appraisal Subcommittee of FIEC, Appraiser Independence Monitoring, Approved Appraiser Education, Appraisal Management Companies, Appraiser Complaint Hotline, Automated Valuation Models, and Broker Price Opinions.

Sec. 9504. Study required on improvements in appraisal process and compliance programs.

Sec. 9505. Equal Credit Opportunity Act amendment.

Sec. 9506. Real Estate Settlement Procedures Act of 1974 amendment relating to certain appraisal fees.

Subtitle G—Sense of Congress regarding the importance of government sponsored enterprises reform

Sec. 9601. 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.

Subtitle H—Reports and Data Collection

Sec. 9701. GAO study report on government efforts to combat mortgage foreclosure rescue scams and loan modification fraud.

Sec. 9702. Reporting of mortgage data by State.

Subtitle I—Multifamily mortgage resolution

Sec. 9801. Multifamily mortgage resolution program.

Subtitle J—Study of effect of drywall presence on foreclosures

Sec. 9901. Study of effect of drywall presence on foreclosures.

Subtitle K—Home Affordable Modification Program

Sec. 9911. Home Affordable Modification Program guidelines.

Subtitle L—Making Home Affordable Program

Sec. 9921. Public availability of information.

Title VIII—Foreclosure Avoidance and Affordable Housing

Sec. 10001. Emergency mortgage relief.

Sec. 10002. Additional assistance for Neighborhood Stabilization Program.

Title IX—Nonadmitted and Reinsurance Reform Act

Sec. 10051. Short title.

Sec. 10052. Effective date.

Subtitle A—Nonadmitted Insurance

Sec. 10101. Reporting, payment, and allocation of premium taxes.

Sec. 10102. Regulation of nonadmitted insurance by insured’s home state.

Sec. 10103. Participation in national producer database.

Sec. 10104. Uniform standards for surplus lines eligibility.

Sec. 10105. Streamlined application for commercial purchasers.

Sec. 10106. GAO study of nonadmitted insurance market.

Sec. 10107. Definitions.

Subtitle B—Reinsurance

Sec. 10201. Regulation of credit for reinsurance and reinsurance agreements.

Sec. 10202. Regulation of reinsurer solvency.

Sec. 10203. Definitions.

Subtitle C—Rule of Construction

Sec. 10301. Rule of construction.

Sec. 10302. Severability.

Title X—Interest-bearing transaction accounts authorized

Sec. 11001. Interest-bearing transaction accounts authorized.

I

Financial stability improvement Act

1000.

Short title; definitions

(a)

Short title

This title may be cited as the Financial Stability Improvement Act of 2009.

(b)

Definitions

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

(1)

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

(2)

The term Council means the Financial Services Oversight Council established under section 1001.

(3)

The term Federal financial regulatory agency means any agency that has a voting member of the Council as set forth in section 1001(b)(1).

(4)

The term financial company means a company or other entity—

(A)

that is—

(i)

incorporated or organized under the laws of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands; or

(ii)

a company incorporated in or organized in a country other than the United States that has significant operations in the United States (hereafter in this title referred to as a foreign financial parent) after through—

(I)

a Federal or State branch or agency of a foreign bank as such terms are defined in the International Banking Act of 1978 (12 U.S.C. 3101 et seq.); or

(II)

a United States affiliate or other United States operating entity;

(B)

that is, in whole or in part, directly or indirectly, engaged in financial activities; and

(C)

that 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.).

(5)

Financial holding company subject to stricter standards

The term financial holding company subject to stricter standards means—

(A)

a financial company that has been subjected to stricter prudential standards under subtitle B; or

(B)

in the case of a financial company described in subparagraph (A) that is required to establish an intermediate holding company under section 6 of the Bank Holding Company Act, the section 6 holding company through which the financial company is required to conduct its financial activities.

(6)

The term primary financial regulatory agency means the following:

(A)

The Comptroller of the Currency, with respect to any national bank, any Federal branch or Federal agency of a foreign bank, and, after the date on which the functions of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision are transferred under subtitle C, a Federal savings association.

(B)

The Board, with respect to—

(i)

any State member bank;

(ii)

any bank holding company and any subsidiary of such company (as such terms are defined in the Bank Holding Company Act), other than a subsidiary that is described in any other subparagraph of this paragraph to the extent that the subsidiary is engaged in an activity described in such subparagraph;

(iii)

any financial holding company subject to stricter standards and any subsidiary (as such term is defined in the Bank Holding Company Act) of such company, other than a subsidiary that is described in any other subparagraph of this paragraph to the extent that the subsidiary is engaged in an activity described in such subparagraph;

(iv)

after the date on which the functions of the Office of Thrift Supervision are transferred under subtitle C, any savings and loan holding company (as defined in section 10(a)(1)(D) of the Home Owners’ Loan Act) and any subsidiary (as such term is defined in the Bank Holding Company Act of 1956) of such company, other than a subsidiary that is described in any other subparagraph of this paragraph, to the extent that the subsidiary is engaged in an activity described in such subparagraph;

(v)

any organization organized and operated under section 25 or 25A of the Federal Reserve Act (12 U.S.C. 601 et seq. or 611 et seq.); and

(vi)

any foreign bank or company that is treated as a bank holding company under subsection (a) of section 8 of the International Banking Act of 1978 and any subsidiary (other than a bank or other subsidiary that is described in any other subparagraph of this paragraph) of any such foreign bank or company.

(C)

The Federal Deposit Insurance Corporation, with respect to any State nonmember bank, any insured State branch of a foreign bank (as such terms are defined in section 3 of the Federal Deposit Insurance Act), and, after the date on which the functions of the Office of Thrift Supervision are transferred under subtitle C, any State savings association.

(D)

The National Credit Union Administration, with respect to any insured credit union under the Federal Credit Union Act (12 U.S.C. 1751 et seq.).

(E)

The Securities and Exchange Commission, with respect to—

(i)

any broker or dealer registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.);

(ii)

any investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.);

(iii)

any investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.) with respect to the investment advisory activities of such company and activities incidental to such advisory activities;

(iv)

any clearing agency (as defined in section 3(a)(23) of the Securities Exchange Act of 1934);

(v)

a securities-based swap execution facility that is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.);

(vi)

any exchange registered as a national securities exchange with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.);

(vii)

any credit rating agency registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.);

(viii)

any securities information processor registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.); and

(ix)

any transfer agent registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).

(F)

The Commodity Futures Trading Commission, with respect to—

(i)

any futures commission merchant, any commodity trading adviser, any retail foreign exchange dealer, and 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 commodities activities of such entity and activities incidental to such commodities activities; and

(ii)

any derivatives clearing organization, designated contract market, or swap execution facility (as defined in the Commodity Exchange Act).

(G)

The Federal Housing Finance Agency with respect to the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Federal home loan banks.

(H)

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

(I)

The Office of Thrift Supervision, with respect to any Federal savings association, State savings association, or savings and loan holding company, until the date on which the functions of the Office of Thrift Supervision are transferred under subtitle C.

(7)

Terms defined in other laws

(A)

Affiliate

The term affiliate has the meaning given such term in section 2(k) of the Bank Holding Company Act of 1956.

(B)

State member bank, state nonmember bank

The terms State member bank and State nonmember bank have the same meanings as in subsections (d)(2) and (e)(2), respectively, of section 3 of the Federal Deposit Insurance Act.

1000A.

Restrictions on the Federal Reserve System pending audit report

(a)

In general

Notwithstanding any other provision of law, the Comptroller General of the United States shall perform an audit of all actions taken by the Board of Governors of the Federal Reserve System and the Federal reserve banks during the current economic crisis pursuant to the authority granted under section 13(c) of the Federal Reserve Act. Such audit shall be completed as expeditiously as possible, but no later than 2 years, after the date of the enactment of the Financial Stability Improvement Act of 2009.

(b)

Report

(1)

Required

Not later than the end of the 90-day period beginning on the date the audit referred to in subsection (a) is completed, the Comptroller General of the United States shall submit a report to the Congress, and make such report available to the public.

(2)

Contents

The report under paragraph (1) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.

A

The Financial Services Oversight Council

1001.

Financial Services Oversight Council established

(a)

Establishment

Immediately upon enactment of this title, there is established a Financial Services Oversight Council.

(b)

Membership

The Council shall consist of the following:

(1)

Voting members

Voting members, who shall each have one vote on the Council, as follows:

(A)

The Secretary of the Treasury, who shall serve as the Chairman of the Council.

(B)

The Chairman of the Board of Governors of the Federal Reserve System.

(C)

The Comptroller of the Currency.

(D)

The Director of the Office of Thrift Supervision, until the functions of the Director of the Office of Thrift Supervision are transferred pursuant to subtitle C.

(E)

The Chairman of the Securities and Exchange Commission.

(F)

The Chairman of the Commodity Futures Trading Commission.

(G)

The Chairperson of the Federal Deposit Insurance Corporation.

(H)

The Director of the Federal Housing Finance Agency.

(I)

The Chairman of the National Credit Union Administration.

(J)

The head of the Consumer Financial Protection Agency.

(2)

Nonvoting members

Nonvoting members, who shall serve in an advisory capacity and shall not be excluded from any of the Council’s proceedings, meetings, discussions, and deliberations:

(A)

The Director of the Federal Insurance Office.

(B)

A State insurance commissioner, to be designated by a selection process determined by the State insurance commissioners, provided that the term for which a State insurance commissioner may serve shall last no more than the 2-year period beginning on the date that the commissioner is selected.

(C)

A State banking supervisor, to be designated by a selection process determined by the State bank supervisors, provided that the term for which a State banking supervisor may serve shall last no more than the 2-year period beginning on the date that the supervisor is selected.

(D)

A State securities commissioner (or an officer performing like functions), to be designated by a selection process determined by such State securities commissioners, provided that the term for which a State securities commissioner may serve shall last no more than the 2-year period beginning on the date that the commissioner is selected.

(c)

Duties

The Council shall have the following duties:

(1)

To advise the Congress on financial domestic and international regulatory developments, including insurance and accounting developments, and make recommendations that will enhance the integrity, efficiency, competitiveness, and stability of the United States financial markets.

(2)

To monitor the financial services marketplace to identify potential threats to the stability of the United States financial system.

(3)

To identify potential threats to the stability of the United States financial system that do not arise out of the financial services marketplace.

(4)

To develop strategies (and conduct exercises in furtherance of those strategies) to prepare for potential threats identified under paragraphs (2) and (3). In doing so, the Council shall collaborate with participants in the financial sector, financial sector coordinating councils, and any other parties the Council determines to be appropriate.

(5)

To subject financial companies and financial activities to stricter prudential standards in order to promote financial stability and mitigate systemic risk in accordance with subtitle B.

(6)

To issue formal recommendations that a Council member agency adopt stricter prudential standards for firms it regulates to mitigate systemic risk in accordance with subtitle B of this title.

(7)

To monitor international regulatory developments, including both insurance and accounting developments, and to identify those developments that may conflict with the policies of the United States or place United States financial services firms or United States financial markets at a competitive disadvantage.

(8)

To facilitate information sharing and coordination among the members of the Council regarding financial services policy development, rulemakings, examinations, reporting requirements, and enforcement actions.

(9)

To provide a forum for discussion and analysis of emerging market developments and financial regulatory issues among its members.

(10)

At the request of an agency that is a Council member, to resolve a jurisdictional dispute between that agency and another agency that is a Council member in accordance with section 1002.

(11)

To review and submit comments to the Securities and Exchange Commission and any standards setting body with respect to an existing or proposed accounting principle, standard, or procedure.

1002.

Resolution of disputes among Federal financial regulatory agencies

(a)

Request for dispute resolution

The Council shall resolve a dispute among 2 or more Federal financial regulatory agencies if—

(1)

a Federal financial regulatory agency has a dispute with another Federal financial regulatory agency about the agencies’ respective jurisdiction over a particular financial company or financial activity or product (excluding matters for which a dispute mechanism specifically has been provided under section 4204 or title III);

(2)

the disputing agencies cannot, after a demonstrated good faith effort, resolve the dispute among themselves; and

(3)

any of the Federal financial regulatory agencies involved in the dispute—

(A)

provides all other disputants prior notice of its intent to request dispute resolution by the Council; and

(B)

requests in writing, no earlier than 14 days after providing the notice described in paragraph (A), that the Council resolve the dispute.

(b)

Council decision

The Council shall decide the dispute—

(1)

within a reasonable time after receiving the dispute resolution request;

(2)

after consideration of relevant information provided by each party to the dispute; and

(3)

by agreeing with 1 of the disputants regarding the entirety of the matter or by determining a compromise position.

(c)

Form and binding effect

A Council decision under this section shall be in writing and include an explanation and shall be binding on all Federal financial regulatory agencies that are parties to the dispute.

1003.

Technical and professional advisory committees

The Council is authorized to appoint—

(1)

subsidiary working groups composed of Council members and their staff, Council staff, or a combination; and

(2)

such temporary special advisory, technical, or professional committees as may be useful in carrying out its functions, which may be composed of Council members and their staff, other persons, or a combination.

1004.

Financial Services Oversight Council meetings and council governance

(a)

Meetings

The Council shall meet as frequently as the Chairman deems necessary, but not less than quarterly.

(b)

Voting

Unless otherwise provided, the Council shall make all decisions the Council is required or authorized to make by a majority of the total voting membership of the Council under section 1001(b)(1).

1005.

Council staff and funding

(a)

Voting members of the Council

The Secretary of the Treasury shall and all other voting members of the Council may, with the approval of the Council—

(1)

detail permanent staff from the Department of the Treasury to provide the Council (and any temporary special advisory, technical, or professional committees appointed by the Council) with professional and expert support; and

(2)

provide such other services and facilities necessary for the performance of the Council’s functions and fulfillment of the duties and mission of the Council.

(b)

Other departments and agencies

In addition to the assistance prescribed in subsection (a), departments and agencies of the United States may, with the approval of the Council—

(1)

detail department or agency staff on a temporary basis to provide additional support to the Council (and any special advisory, technical, or professional committees appointed by the Council); and

(2)

provide such services, and facilities as the other departments or agencies may determine advisable.

(c)

Staff status; council funding

(1)

Status

Staff detailed to the Council by the Secretary of the Treasury and other United States departments or agencies shall—

(A)

report to and be subject to oversight by the Council during their assignment to the Council; and

(B)

be compensated by the department of agency from which the staff was detailed.

(2)

Funding

The administrative expense of the Council shall be paid by the departments and agencies represented by voting members of the Council on an equal basis.

1006.

Reports to the Congress

(a)

In general

Semiannually the Council shall submit a report to the Committee on Ways and Means, the Committee on Agriculture, and the Committee on Financial Services of the House of Representatives and the Committee on Finance, the Committee on Agriculture, and the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Comptroller General of the United States that—

(1)

describes significant financial and regulatory developments, including insurance and accounting regulations and standards, and assesses the impact of those developments on the stability of the financial system;

(2)

recommends actions that will improve financial stability;

(3)

details the size, scale, scope, concentration, activities, and interconnectedness of the 50 largest financial institutions, by total assets, in the United States;

(4)

describes strategies developed by the Council to respond to potential threats to the stability of the United States financial system and the outcome of exercises conducted in furtherance of those strategies;

(5)

describes the nature and scope of any company or activities identified under subtitle B and steps taken to address them; and

(6)

describes any dispute resolutions undertaken under section 1002 and the result of such resolutions.

(b)

Evaluation of annual report by GAO

Not later than 120 days after receiving the report required by subsection (a), the Comptroller General of the United States shall submit an evaluation of such report to the Committee on Ways and Means, the Committee on Agriculture, and the Committee on Financial Services of the House of Representatives and the Committee on Finance, the Committee on Agriculture, and the Committee on Banking, Housing, and Urban Affairs of the Senate.

(c)

Statements by voting members of the Council

At the time 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 prevent systemic risk that would negatively affect the economy, submit a signed statement to the Committee on Ways and Means, the Committee on Agriculture, and the Committee on Financial Services of the House of Representatives and the Committee on Finance, the Committee on Agriculture, and the Committee on Banking, Housing, and Urban Affairs of the Senate 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 the Committee on Ways and Means, the Committee on Agriculture, and the Committee on Financial Services of the House of Representatives and the Committee on Finance, the Committee on Agriculture, and the Committee on Banking, Housing, and Urban Affairs of the Senate stating what actions such member believes need to be taken in order to ensure that all reasonable steps described under paragraph (1) are taken.

(d)

Testimony by the Chairman

The Chairman of the Council 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 a semi-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.

(e)

Study of effects Consumer Financial Protection Agency regulations and standards

(1)

Study required

The Council shall conduct a study of the effects that regulations and standards of the Consumer Financial Protection Agency will have on all covered persons (as such term is defined in section 4002(9)), including nondepository institution covered persons. The Director of the Consumer Financial Protection Agency shall take the findings of the study into account when issuing regulations.

(2)

Value of nonbank products

The study shall include an evaluation and assessment of the appropriateness of using APR as a true measure of the value of all nonbank products.

(3)

Submission

Not later than 240 days after the date of the enactment of this Act, the Director of the Consumer Financial Protection Agency shall submit the study to Congress and include any recommendations the Director may have for changes in law and regulations to improve consumer protections and maintain access to credit.

1007.

Applicability of certain Federal laws

(a)

The Federal Advisory Committee Act shall not apply to the Financial Services Oversight Council, or any special advisory, technical, or professional committees 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).

(b)

The Council shall not be deemed an agency for purposes of any State or Federal law.

1008.

Oversight by GAO

(a)

Authority to audit

The Comptroller General of the United States may audit the activities and financial transactions of—

(1)

the Council; and

(2)

any person or entity acting on behalf of or under the authority of the Council, to the extent such activities and financial transactions relate to such person’s or entity’s work for the Council.

(b)

Access to information

(1)

In general

Notwithstanding any other provision of law, the Comptroller General of the United States shall have access, upon request and at such reasonable time and in such reasonable form as the Comptroller General may request, 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 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 agent’s or representative’s activities on behalf of the Council) at such reasonable times as the Comptroller General may request.

(2)

Certain information specified

Access under paragraph (1) includes access to—

(A)

information provided to the Council by its voting and nonvoting members under section 1101; and

(B)

the identity of each financial holding company subject to stricter standards.

(3)

Copies

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

(c)

Periodic evaluations

The Comptroller General of the United States shall periodically evaluate the processes and activities of the Council and the extent to which the Council is fulfilling its duties under this title. The Comptroller General shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a report on the results of each such evaluation.

B

Prudential regulation of companies and activities for financial stability purposes

1100.

Federal Reserve Board authority that of agent acting on behalf of Council

For purposes of this subtitle, the Board of Governors of the Federal Reserve System shall act in the capacity of agent for the Council, acting on behalf of the Council.

1101.

Council and Board authority to obtain information

(a)

In general

The Council and the Board are authorized to receive, and may request the production of, any data or information from members of the Council, as necessary—

(1)

to monitor the financial services marketplace to identify potential threats to the stability of the United States financial system;

(2)

to identify global trends and developments that could pose systemic risks to the stability of the economy of the United States or other economies; or

(3)

to otherwise carry out any of the provisions of this title, including to ascertain a primary financial regulatory agency’s implementation of recommended prudential standards under this subtitle.

(b)

Submission by council members

Notwithstanding any provision of law, any voting or nonvoting member of the Council is authorized to provide information to the Council, and the members of the Council shall maintain the confidentiality of such information.

(c)

Financial company data collection

(1)

In general

The Council or the Board may require the submission of periodic and other reports from any financial company solely for the purpose of assessing the extent to which a financial activity or financial market in which the financial company participates, or the company itself, poses a threat to financial stability.

(2)

Mitigation of report burden

Before requiring the submission of reports from financial companies that are regulated by the primary financial regulatory agencies, the Council or the Board shall coordinate with such agencies and shall, whenever possible, rely on information already being collected by such agencies.

(3)

Mitigation requirements in case of foreign financial parents

Before requiring the submission of reports from a company that is a foreign financial parent, the Council or the Board shall, to the extent appropriate, coordinate with any appropriate foreign regulator of such company and any appropriate multilateral organization and, whenever possible, rely on information already being collected by such foreign regulator or multilateral organizational with English translation.

(d)

Consultation with agencies and entities

The Council or the Board, as appropriate, may consult with Federal and State agencies and other entities (including the Federal Insurance Office) to carry out any of the provisions of this subtitle.

(e)

Additional provisions

(1)

Data and Information Sharing

The Chairman of the Council, in consultation with the other members of the Council, may—

(A)

establish procedures to share data and information collected by the Council under this section with the members of the Council;

(B)

develop an electronic process for sharing all information collected by the Council with the Chairman of the Board on a real-time basis;

(C)

issue any regulations necessary to carry out this subsection; and

(D)

designate the format in which requested data and information must be submitted to the Council, including any electronic, digital, or other format that facilitates the use of such data by the Council in its analysis.

(2)

Applicable Privileges Not Waived

A Federal financial regulator, State financial regulator, United States financial company, foreign financial company operating in the United States, financial market utility, or other person shall not be compelled to waive and shall not be deemed to have waived any privilege otherwise applicable to any data or information by transferring the data or information to, or permitting that data or information to be used by—

(A)

the Council;

(B)

any Federal financial regulator or State financial regulator, in any capacity; or

(C)

any other agency of the Federal Government (as defined in section 6 of title 18, United States Code).

(3)

Disclosure Exemption

Any information obtained by the Council under this section shall be exempt from the disclosure requirements under section 552 of title 5, United States Code.

(4)

Consultation With Foreign Governments

Under the supervision of the President, and in a manner consistent with section 207 of the Foreign Service Act of 1980 (22 U.S.C. 3927), the Chairman 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.

(5)

Report

Not later than 6 months after the date of the enactment of this title, the Chairman of the Council shall report to the Financial Services Committee of the House of Representatives and the Banking, Housing, and Urban Affairs Committee of the Senate the opinion of the Council as to whether setting up an electronic database as described in paragraph (1)(B) would aid the Council in carrying out this section.

1102.

Council prudential regulation recommendations to Federal financial regulatory agencies; agency authority

(a)

In general

The Council is authorized to issue formal recommendations, publicly or privately, that a Federal financial regulatory agency adopt stricter prudential standards for firms it regulates to mitigate systemic risk.

(b)

Agency authority to implement standards

(1)

A Federal financial regulatory agency specifically may, in response to a Council recommendation under this section or otherwise, impose, require reports regarding, examine for compliance with, and enforce stricter prudential standards and safeguards for the firms it regulates to mitigate systemic risk. This authority is in addition to and does not limit any other authority of the Federal financial regulatory agencies. Compliance by an entity with actions taken by a Federal financial regulatory agency under this section shall be enforceable in accordance with the statutes governing the respective Federal financial regulatory agency’s jurisdiction over the entity as if the agency action were taken under those statutes.

(2)

Applying standards to foreign financial parents

In applying standards under paragraph (1) to any foreign financial parent, or to any branch of, subsidiary of, or other operating entity related to such foreign financial parent that operates within the United States, the Federal financial regulatory agency shall—

(A)

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

(B)

take into account the extent to which the foreign financial parent is subject to comparable standards on a consolidated basis in the home country of such foreign financial parent that are administered by a comparable foreign supervisory authority.

(c)

Agency notice to council

A Federal financial regulatory agency shall, within 60 days of receiving a Council recommendation under this section, notify the Council in writing regarding—

(1)

the actions the Federal financial regulatory agency has taken in response to the Council’s recommendation, additional actions contemplated, and timetables therefore; or

(2)

the reason the Federal financial regulatory agency has failed to respond to the Council’s request.

1103.

Subjecting financial companies to stricter prudential standards for financial stability purposes

(a)

In general

The Council shall, in consultation with the Board and any other primary financial regulatory agency that regulates the financial company or a subsidiary of such company, and, in the case of a financial holding company subject to stricter standards that is an insurance company, the Federal Insurance Office, subject a financial company to stricter prudential standards under this subtitle if the Council determines that—

(1)

material financial distress at the company could pose a threat to financial stability or the economy; or

(2)

the nature, scope, size, scale, concentration, and interconnectedness, or mix of the company’s activities could pose a threat to financial stability or the economy.

(b)

Criteria

In making a determination under subsection (a), the Council shall consider the following criteria:

(1)

The extent of the company’s leverage.

(2)

The extent and nature of the company’s off-balance sheet exposures.

(3)

The extent and nature of the company’s transactions and relationships with other financial companies.

(4)

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.

(5)

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

(6)

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.

(7)

The nature, scope, and mix of the company’s activities.

(8)

The degree to which the company is already regulated by one or more Federal financial regulatory agencies or, in the case of a foreign financial parent, the extent to which such foreign parent is subject to prudential standards on a consolidated basis in the home country of such financial parent that are administered and enforced by a comparable foreign supervisory authority.

(9)

The amount and nature of the company’s financial assets.

(10)

The amount and nature of the company’s liabilities, including the degree of reliance on short-term funding.

(11)

Any other factors that the Council deems appropriate.

(c)

Notification of decision

The Board, in an executive capacity on behalf of the Council, shall immediately upon the Council’s decision notify the financial company by order, which shall be public, that the financial company is subject to stricter prudential standards, as prescribed by the Board in accordance with section 1104.

(d)

Periodic review and rescission of findings

(1)

Submission of assessment

The Board shall periodically submit a report to the Council containing an assessment of whether each company subjected to stricter prudential standards should continue to be subject to such standards.

(2)

Review and rescission

The Council shall—

(A)

review the assessment submitted pursuant to paragraph (1) and any information or recommendation submitted by members of the Council regarding whether a financial holding company subject to stricter standards continues to merit stricter prudential standards; and

(B)

rescind the action subjecting a company to stricter prudential standards if the Council determines that the company no longer meets the conditions for being subjected to stricter prudential standards in subsections (a) and (b).

(e)

Appeal

(1)

Administrative

The Council and the Board, in an executive capacity on behalf of the Council, shall establish a procedure through which a financial company that has been subjected to stricter prudential standards in accordance with this section may appeal being subjected to stricter prudential standards.

(2)

Judicial review

Any financial company which has been subjected to stricter prudential standards may seek judicial review by filing a petition for such review in the United States Court of Appeals for the District of Columbia.

(f)

Effect of council decision

(1)

Application of federal laws

(A)

Application of bank holding company act and federal deposit insurance act

A financial company subject to stricter standards that does not own a bank (as defined in section 2 of the Bank Holding Company Act of 1956) and that is not a foreign bank or company that is treated as a bank holding company under section 8 of the International Banking Act of 1978 shall be subject to section 4, subsections (b), (c), (d), (e), (f), and (g) of section 5, and section 8 of the Bank Holding Company Act of 1956, and section 8 of the Federal Deposit Insurance Act in the same manner and to the same extent as if such financial holding company subject to stricter standards were a bank holding company that has elected to be a financial holding company (as such terms are defined in the Bank Holding Company Act of 1956), its subsidiaries were subsidiaries of a bank holding company, and the Board was its appropriate Federal banking agency (as such term is defined under the Federal Deposit Insurance Act).

(B)

Board authority

For purposes of administering and enforcing the provisions of this title, the Board may take any action with respect to a financial holding company subject to stricter standards described in subparagraph (A) or its subsidiaries under the authorities described in subparagraph (A) as if such financial holding company subject to stricter standards were a bank holding company that has elected to be a financial holding company (as such terms are defined in the Bank Holding Company Act of 1956), its subsidiaries were subsidiaries of a bank holding company, and the Board was its appropriate Federal banking agency (as such term is defined under the Federal Deposit Insurance Act).

(2)

Application of activity restrictions and section 6 holding company requirements

(A)

In general

Except as provided in subparagraphs (B) and (C)—

(i)

a financial holding company subject to stricter standards that conducts activities that do not comply with section 4 of the Bank Holding Company Act shall be required to establish or designate a section 6 holding company in accordance with section 6 of the Bank Holding Company Act of 1956 through which it conducts activities of the company that are determined to be financial in nature or incidental thereto under section 4(k) of the such Act; and

(ii)

such section 6 holding company shall be the financial holding company subject to stricter standards for purposes of this title.

(B)

Exceptions from section 6 holding company requirements

(i)

General requirement for board to consider exceptions

Before such time as a financial holding company subject to stricter standards is required to establish or designate a section 6 holding company under section 6 of the Bank Holding Company Act, and in consultation with the financial holding company subject to stricter standards and any appropriate Federal or State financial regulators (and, in the case of a financial holding company subject to stricter standards that is an insurance company, the Federal Insurance Office)—

(I)

the Board shall consider whether to grant any of the exemptions from the requirements applicable to section 6 holding companies under section 6(a)(6)(A) of the Bank Holding Company Act of 1956, in accordance with that provision; and

(II)

the Board, at the request of a financial holding company subject to stricter standards that is predominantly engaged in activities that are determined to be financial in nature or incidental thereto under section 4(k) of the Bank Holding Company Act, shall consider whether to exempt the financial holding company subject to stricter standards from the requirement to establish a section 6 holding company, taking into consideration paragraph (2)(D), and the extent to which the exemption would: facilitate the extension of credit to individuals, households and businesses; improve efficiency or customer service or result in other public benefits; potentially threaten the safety and soundness of the financial holding company or any of its subsidiaries; potentially increase systemic risk or threaten the stability of the overall financial system; potentially result in unfair competition; and potentially have anticompetitive effects that would not be outweighed by public benefits.

(ii)

Board determination not to exempt

(I)

In general

If the Board determines not to exempt the financial holding company subject to stricter standards from the requirement to establish a section 6 holding company, the financial holding company subject to stricter standards shall establish a section 6 holding company within 90 days after the Board’s determination.

(II)

Extension of period

The Board may extend the time by which the financial holding company subject to stricter standards is required to establish a section 6 holding company for an additional reasonable period of time, not to exceed 180 days.

(iii)

Board determination to exempt

(I)

In general

If the Board grants the requested exemption from the requirement to establish a section 6 holding company, the financial holding company subject to stricter standards shall at all times remain predominantly engaged in activities that are determined to be financial in nature or incidental thereto under section 4(k) of the Bank Holding Company Act of 1956, and shall be the financial holding company subject to stricter standards for purposes of this title.

(II)

Subsequent loss of exemption

Upon a determination by the Board, in consultation with any relevant Federal or State regulators of the financial holding company subject to stricter standards, and, in the case of a financial holding company subject to stricter standards that is an insurance company, the Federal Insurance Office, that the financial holding company subject to stricter standards fails to comply with this subsection, the financial holding company subject to stricter standards shall lose the exemption from the section 6 holding company requirement and shall establish a section 6 holding company within the time periods described in clause (ii)(I).

(C)

Activities conducted abroad

Section 4 of the Bank Holding Company Act of 1956 shall not apply to any activities that a foreign financial holding company subject to stricter standards conducts solely outside the United States if such activities are conducted solely by a company or other entity that is located outside the United States.

(D)

Flexible application

In applying the activity restrictions and ownership limitations of section 4 of the Bank Holding Company Act of 1956 to financial holding companies subject to stricter standards described in paragraph (1)(A), the Board shall flexibly adapt such requirements taking into account the usual and customary practices in the business sector of the financial company subject to stricter standards so as to avoid unnecessary burden and expense.

(3)

Leverage limitation

The Board shall require each financial holding company subject to stricter standards to maintain a debt to equity ratio of no more than 15 to 1, and the Board shall issue regulations containing procedures and timelines for how a financial holding company subject to stricter standards with a debt to equity ratio of more than 15 to 1 at the time such company becomes a financial holding company subject to stricter standards shall reduce such ratio.

1104.

Stricter prudential standards for certain financial holding companies for financial stability purposes

(a)

Stricter prudential standards

(1)

In general

To mitigate risks to financial stability and the economy posed by a financial holding company that has been subjected to stricter prudential standards in accordance with section 1103, the Board, as agent of the Council, shall impose stricter prudential standards on such company. Such standards shall be designed to maximize financial stability taking costs to long-term financial and economic growth into account, be heightened when compared to the standards that otherwise would apply to financial holding companies that are not subjected to stricter prudential standards pursuant to this subtitle (including by addressing additional or different types of risks than otherwise applicable standards), and reflect the potential risk posed to financial stability by the financial holding company subject to stricter standards.

(2)

Standards

(A)

Required standards

The stricter standards imposed by the Board under this section shall include—

(i)

risk-based capital requirements and leverage limits, unless the Board determines that such requirements are not appropriate for a financial holding company subject to stricter standards because of such company’s activities (such as investment company activities or assets under management) or structure, in which case the Board shall apply other standards that result in appropriately stringent controls.

(ii)

liquidity requirements;

(iii)

concentration requirements (as specified in subsection (c));

(iv)

prompt corrective action requirements (as specified in subsection (e));

(v)

resolution plan requirements (as specified in subsection (f)); and

(vi)

overall risk management requirements.

(B)

Additional standards

The heightened standards imposed by the Board under this section also may include short-term debt limits prescribed in accordance with subsection (d) and any other prudential standards that the Board deems advisable, including taking actions to mitigate systemic risk.

(C)

Consultation with Federal financial regulatory agencies and the Federal Insurance Office

The Board, in developing stricter prudential standards under this subsection, shall consult with other Federal financial regulatory agencies with respect to any standard that is likely to have a significant impact on a functionally regulated subsidiary, or a subsidiary depository institution, of a financial holding company that is subject to stricter prudential standards under this title. With respect to a financial holding company subject to stricter standards that is an insurance company or any insurance company subsidiary of such a financial holding company subject to stricter standards, the Board shall also consult with the Federal Insurance Office.

(3)

Application of required standards

In imposing prudential standards under this section, the Board—

(A)

may differentiate among financial holding companies subject to stricter standards on an individual basis or by category, taking into consideration their capital structure, risk, complexity, financial activities, the financial activities of their subsidiaries, and any other factors that the Board deems appropriate; and

(B)

shall take into consideration whether and to what extent a financial holding company subject to stricter standards that is not a bank holding company or treated as a bank holding company owns or controls a depository institution and shall adapt the prudential standards applied to such company as appropriate in light of any predominant line of business of such company, including assets under management or other activities for which capital requirements are not appropriate.

(4)

Well capitalized and well managed

A financial holding company subject to stricter standards shall at all times after it is subject to such standards be well capitalized and well managed as defined by the Board.

(5)

Application to foreign financial companies

The Board shall prescribe regulations regarding the application of stricter prudential standards to a foreign financial parent and to a Federal or State branch, subsidiary, or operating entity that is owned or controlled by a foreign financial parent, giving due regard to principles of national treatment and equality of competitive opportunity and taking into account the extent to which the foreign financial parent is subject on a consolidated basis to home country standards comparable to those applied to financial holding companies in the United States.

(6)

Inclusion of off balance sheet activities in computing capital requirements

(A)

In general

In the case of any financial holding company subject to stricter standards, the computation of capital requirements shall take into account off balance sheet activities for such a company.

(B)

Exemption

If the Board determines that an exemption from the requirements under subparagraph (A) is appropriate, the Board may exempt a financial holding company subject to stricter standards from the requirements under subparagraph (A) or any transaction or transactions engaged in by such a company.

(C)

Off balance sheet activities defined

For purposes of this paragraph, the term off balance sheet activities means a liability 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 they may create a liability:

(i)

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

(ii)

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

(iii)

Risk participation in bankers’ acceptances.

(iv)

Sale and repurchase agreements.

(v)

Asset sales with recourse against the seller.

(vi)

Interest rate swaps.

(vii)

Credit swaps.

(viii)

Commodity contracts.

(ix)

Forward contracts.

(x)

Securities contracts.

(xi)

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

(b)

Prudential standards at functionally regulated subsidiaries and subsidiary depository institutions

(1)

Board authority to recommend standards

With respect to a functionally regulated subsidiary (as such term is defined in section 5 of the Bank Holding Company Act) or a subsidiary depository institution of a financial holding company subject to stricter standards, the Board may recommend that the relevant Federal financial regulatory agency for such functionally regulated subsidiary or subsidiary depository institution prescribe stricter prudential standards on such functionally regulated subsidiary or subsidiary depository institution. Any standards recommended by the Board under this section shall be of the same type as those described in subsection (a)(2) that the Board is required or authorized to impose directly on the financial holding company subject to stricter standards.

(2)

Agency authority to implement heightened standards and safeguards

Each Federal financial regulatory agency that receives a Board recommendation under paragraph (1) is authorized to impose, require reports regarding, examine for compliance with, and enforce standards under this subsection with respect to the entities such agency regulates as described in section 1006(b)(6). This authority is in addition to and does not limit any other authority of the Federal financial regulatory agencies. Compliance by an entity with actions taken by a Federal financial regulatory agency under this section shall be enforceable in accordance with the statutes governing the respective agency’s jurisdiction over the entity as if the agency action were taken under those statutes.

(3)

Imposition of standards

Standards imposed by a Federal financial regulatory agency under this subsection shall be the standards recommended by the Board in accordance with paragraph (1) or any other similar standards that the Board deems acceptable after consultation between the Board and the primary financial regulatory agency and, with respect to an insurance company, the Federal Insurance Office.

(4)

Federal financial regulatory agency response; notice to council and board

A Federal financial regulatory agency shall notify the Council and the Board in writing on whether and to what extent the agency has imposed the stricter prudential standards described in paragraph (3) within 60 days of the Board’s recommendation under paragraph (1). A Federal financial regulatory agency that fails to impose such standards shall provide specific justification for such failure to act in the written notice from the agency to the Council and Board.

(c)

Concentration limits for financial holding companies subject to stricter standards

(1)

Standards

In order to limit the risks that the failure of any company could pose to a financial holding company subject to stricter standards and to the stability of the United States financial system, the Board, by regulation, shall prescribe standards that limit the risks posed by the exposure of a financial holding company subject to stricter standards to any other company.

(2)

Limitation on credit exposure

The regulations prescribed by the Board shall prohibit each financial holding company subject to stricter standards from having credit exposure to any unaffiliated company that exceeds 25 percent of capital stock and surplus of the financial holding company subject to stricter standards, or such lower amount as the Board may determine by regulation to be necessary to mitigate risks to financial stability.

(3)

Credit exposure

For purposes of this subsection and with respect to a financial holding company subject to stricter standards, the term 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 agreement with the company;

(C)

all securities borrowing and lending transactions with the company to the extent that such transactions create credit exposure of the financial holding company subject to stricter standards to the company;

(D)

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

(E)

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

(F)

counterparty credit exposure to the company in connection with a derivative transaction between the financial holding company subject to stricter standards and the company; and

(G)

any other similar transactions that the Board 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 financial holding company subject to stricter standards with any person is deemed 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 may issue such regulations and orders, including definitions consistent with this subsection, as may be necessary to administer and carry out the purpose of this subsection.

(6)

Exemptions

(A)

In general

(i)

Federal home loan banks

This subsection shall not apply to any Federal home loan bank, but Federal home loan banks are not exempt from any other provision of this title except as specifically provided in this title.

(ii)

Applicability to other entities

The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation are not exempt from any provision of this title except as specifically provided in this title.

(B)

Regulations

The Board may, by regulation or order, exempt transactions, in whole or in part, from the definition of credit exposure if it finds that the exemption is in the public interest and consistent with the purpose of this subsection.

(7)

Transition period

This subsection and any regulations and orders of the Board under the authority of this subsection shall not take effect until the date that is 3 years from the date of the enactment of this subsection. The Board may extend the effective date for up to 2 additional years to promote financial stability.

(d)

Short-term debt limits for certain financial holding companies

(1)

In general

In order to limit the risks that an overaccumulation of short-term debt could pose to financial holding companies and to the stability of the United States financial system, the Board may by regulation prescribe a limit on the amount of short-term debt, including off-balance sheet exposures, that may be accumulated by any financial holding company subject to stricter standards for purposes of this title.

(2)

Basis of limit

Any limit prescribed under paragraph (1) shall be based on a financial holding company’s short-term debt as a percentage of its capital stock and surplus or on such other measure as the Board 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 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 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 may, if it determines such action is necessary to ensure appropriate heightened prudential supervision, with respect to a financial holding company that does not control an insured depository institution, issue to such company an exemption from or adjustment to the limit prescribed under paragraph (1).

(e)

Prompt corrective action for financial holding companies subject to stricter standards

(1)

Prompt corrective action required

The Board shall take prompt corrective action to resolve the problems of financial holding companies subject to stricter standards. Except as specifically provided otherwise, this subsection shall apply only to financial holding companies that are incorporated or organized under United States laws.

(2)

Definitions

For purposes of this section—

(A)

Capital categories

(i)

Well capitalized

A financial holding company subject to stricter standards is well capitalized if it exceeds the required minimum level for each relevant capital measure.

(ii)

Undercapitalized

A financial holding company subject to stricter standards is undercapitalized if it fails to meet the required minimum level for any relevant capital measure.

(iii)

Significantly undercapitalized

A financial holding company subject to stricter standards is significantly undercapitalized if it is significantly below the required minimum level for any relevant capital measure. The Board shall define by rule or regulation the term significantly undercapitalized at a threshold the Board determines to be prudent for the effective monitoring, management and oversight of the financial system.

(iv)

Critically undercapitalized

A financial holding company subject to stricter standards is critically undercapitalized if it fails to meet any level specified in paragraph (4)(C)(i).

(3)

Other definitions

(A)

Average

The average of an accounting item (such as total assets or tangible equity) during a given period means the sum of that item at the close of business on each business day during that period divided by the total number of business days in that period.

(B)

Capital distribution

The term capital distribution means—

(i)

a distribution of cash or other property by a financial holding company subject to stricter standards to its owners made on account of that ownership, but not including any dividend consisting only of shares of the financial holding company subject to stricter standards or rights to purchase such shares;

(ii)

a payment by a financial holding company subject to stricter standards to repurchase, redeem, retire, or otherwise acquire any of its shares or other ownership interests, including any extension of credit to finance any person’s acquisition of those shares or interests; and

(iii)

a transaction that the Board determines, by order or regulation, to be in substance a distribution of capital to the owners of the financial holding company subject to stricter standards.

(C)

Capital restoration plan

The term capital restoration plan means a plan submitted under paragraph (6)(B).

(D)

Compensation

The term compensation includes any payment of money or provision of any other thing of value in consideration of employment.

(E)

Relevant capital measure

The term relevant capital measure means the measures described in paragraph (4).

(F)

Required minimum level

The term required minimum level means, with respect to each relevant capital measure, the minimum acceptable capital level specified by the Board by regulation.

(G)

Senior executive officer

The term senior executive officer has the same meaning as the term executive officer in section 22(h) of the Federal Reserve Act (12 U.S.C. 375b).

(4)

Capital standards

(A)

Relevant capital measures

(i)

In general

Except as provided in clause (ii)(II), the capital standards prescribed by the Board under section 1104(a)(2) shall include—

(I)

a leverage limit; and

(II)

a risk-based capital requirement.

(ii)

Other capital measures

The Board may by regulation—

(I)

establish any additional relevant capital measures to carry out this section; or

(II)

rescind any relevant capital measure required under clause (i) upon determining that the measure is no longer an appropriate means for carrying out this section.

(B)

Capital categories generally

The Board shall, by regulation, specify for each relevant capital measure the levels at which a financial holding company subject to stricter standards is well capitalized, undercapitalized, and significantly undercapitalized.

(C)

Critical capital

(i)

Board to specify level

(I)

Leverage limit

The Board shall, by regulation, specify the ratio of tangible equity to total assets at which a financial holding company subject to stricter standards is critically undercapitalized.

(II)

Other relevant capital measures

The Board may, by regulation, specify for 1 or more other relevant capital measures, the level at which a financial holding company subject to stricter standards is critically undercapitalized.

(ii)

Leverage limit range

The level specified under clause (i)(I) shall require tangible equity in an amount—

(I)

not less than 2 percent of total assets; and

(II)

except as provided in subclause (I), not more than 65 percent of the required minimum level of capital under the leverage limit.

(5)

Capital distributions restricted

(A)

In general

A financial holding company subject to stricter standards shall make no capital distribution if, after making the distribution, the financial holding company subject to stricter standards would be undercapitalized.

(B)

Exception

Notwithstanding subparagraph (A), the Board may permit a financial holding company subject to stricter standards to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition—

(i)

is made in connection with the issuance of additional shares or obligations of the financial holding company subject to stricter standards in at least an equivalent amount; and

(ii)

will reduce the financial obligations of the financial holding company subject to stricter standards or otherwise improve the financial condition of the financial holding company subject to stricter standards.

(6)

Provisions applicable to undercapitalized financial holding company subject to stricter standards

(A)

Monitoring required

The Board shall—

(i)

closely monitor the condition of any undercapitalized financial holding company subject to stricter standards;

(ii)

closely monitor compliance by any undercapitalized financial holding company subject to stricter standards with capital restoration plans, restrictions, and requirements imposed under this section; and

(iii)

periodically review the plan, restrictions, and requirements applicable to any undercapitalized financial holding company subject to stricter standards to determine whether the plan, restrictions, and requirements are effective.

(B)

Capital restoration plan required

(i)

In general

Any undercapitalized financial holding company subject to stricter standards shall submit an acceptable capital restoration plan to the Board within the time allowed by the Board under clause (iv).

(ii)

Contents of plan

The capital restoration plan shall—

(I)

specify—

(aa)

the steps the financial holding company subject to stricter standards will take to become well capitalized;

(bb)

the levels of capital to be attained by the financial holding company subject to stricter standards during each year in which the plan will be in effect;

(cc)

how the financial holding company subject to stricter standards will comply with the restrictions or requirements then in effect under this section; and

(dd)

the types and levels of activities in which the financial holding company subject to stricter standards will engage; and

(II)

contain such other information that the Board may require.

(iii)

Criteria for accepting plan

The Board shall not accept a capital restoration plan unless it determines that the plan—

(I)

complies with clause (ii);

(II)

is based on realistic assumptions, and is likely to succeed in restoring the capital of the financial holding company subject to stricter standards; and

(III)

would not appreciably increase the risk (including credit risk, interest-rate risk, and other types of risk) to which the financial holding company subject to stricter standards is exposed.

(iv)

Deadlines for submission and review of plans

The Board shall, by regulation, establish deadlines that—

(I)

provide financial holding companies subject to stricter standards with reasonable time to submit capital restoration plans, and generally require a financial holding company subject to stricter standards to submit a plan not later than 45 days after it becomes undercapitalized; and

(II)

require the Board to act on capital restoration plans expeditiously, and generally not later than 60 days after the plan is submitted.

(C)

Asset growth restricted

An undercapitalized financial holding company subject to stricter standards shall not permit its average total assets during any calendar quarter to exceed its average total assets during the preceding calendar quarter unless—

(i)

the Board has accepted the capital restoration plan of the financial holding company subject to stricter standards;

(ii)

any increase in total assets is consistent with the plan; and

(iii)

the ratio of tangible equity to total assets of the financial holding company subject to stricter standards increases during the calendar quarter at a rate sufficient to enable it to become well capitalized within a reasonable time.

(D)

Prior approval required for acquisitions and new lines of business

An undercapitalized financial holding company subject to stricter standards shall not, directly or indirectly, acquire any interest in any company or insured depository institution, or engage in any new line of business, unless—

(i)

the Board has accepted the capital restoration plan of the financial holding company subject to stricter standards, the financial holding company subject to stricter standards is implementing the plan, and the Board determines that the proposed action is consistent with and will further the achievement of the plan;

(ii)

the Board determines that the specific proposed action is appropriate; or

(iii)

the Board has exempted the financial holding company subject to stricter standards from the requirements of this paragraph with respect to the class of acquisitions that includes the proposed action.

(E)

Discretionary safeguards

The Board may, with respect to any undercapitalized financial holding company subject to stricter standards, take actions described in any clause of paragraph (7)(B) if the Board determines that those actions are necessary. The Board, in determining whether to impose any requirement under this subparagraph that is likely to have a significant effect on a functionally regulated subsidiary, subsidiary depository institution, or insurance company subsidiary of a financial holding company subject to stricter standards, shall consult with the primary financial regulatory agency for such subsidiary. In the case of an insurance company subsidiary of a financial holding company subject to stricter standards, the Board shall consult with the Federal Insurance Office.

(7)

Provisions applicable to significantly undercapitalized financial holding companies subject to stricter standards and undercapitalized financial holding companies subject to stricter standards that fail to submit and implement capital restoration plans

(A)

In general

This paragraph shall apply with respect to any financial holding company subject to stricter standards that—

(i)

is significantly undercapitalized; or

(ii)

is undercapitalized and—

(I)

fails to submit an acceptable capital restoration plan within the time allowed by the Board under paragraph (6)(B)(iv); or

(II)

fails in any material respect to implement a capital restoration plan accepted by the Board.

(B)

Specific actions authorized

The Board shall carry out this paragraph by taking 1 or more of the following actions—

(i)

Requiring recapitalization

Doing one or more of the following:

(I)

Requiring the financial holding company subject to stricter standards to sell enough shares or obligations of the financial holding company subject to stricter standards so that the financial holding company subject to stricter standards will be well capitalized after the sale.

(II)

Further requiring that instruments sold under subclause (I) be voting shares.

(III)

Requiring the financial holding company subject to stricter standards to be acquired by or combine with another company.

(ii)

Restricting transactions with affiliates

(I)

Requiring the financial holding company subject to stricter standards to comply with section 23A of the Federal Reserve Act (12 U.S.C. 371c), as if it were a member bank.

(II)

Further restricting the transactions of the financial holding company subject to stricter standards with affiliates and insiders.

(iii)

Restricting asset growth

Restricting the asset growth of the financial holding company subject to stricter standards more stringently than paragraph (6)(C), or requiring the financial holding company subject to stricter standards to reduce its total assets.

(iv)

Restricting activities

Requiring the financial holding company subject to stricter standards or any of its subsidiaries to alter, reduce, or terminate any activity that the Board determines poses excessive risk to the financial holding company subject to stricter standards.

(v)

Improving management

Doing one or more of the following:

(I)

New election of directors

Ordering a new election for the board of directors of the financial holding company subject to stricter standards.

(II)

Dismissing directors or senior executive officers

Requiring the financial holding company subject to stricter standards to dismiss from office any director or senior executive officer who had held office for more than 180 days immediately before the financial holding company subject to stricter standards became undercapitalized. Dismissal under this clause shall not be construed to be a removal under section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818).

(III)

Employing qualified senior executive officers

Requiring the financial holding company subject to stricter standards to employ qualified senior executive officers (who, if the Board so specifies, shall be subject to approval by the Board).

(vi)

Requiring divestiture

Requiring the financial holding company subject to stricter standards to divest itself of or liquidate any subsidiary if the Board determines that the subsidiary is in danger of becoming insolvent, poses a significant risk to the financial holding company subject to stricter standards, or is likely to cause a significant dissipation of the assets or earnings of the financial holding company subject to stricter standards.

(vii)

Requiring other action

Requiring the financial holding company subject to stricter standards to take any other action that the Board determines will better carry out the purpose of this section than any of the actions described in this subparagraph.

(C)

Presumption in favor of certain actions

In complying with subparagraph (B), the Board shall take the following actions, unless the Board determines that the actions would not be appropriate:

(i)

The action described in subclause (I) or (III) of subparagraph (B)(i) (relating to requiring the sale of shares or obligations, or requiring the financial holding company subject to stricter standards to be acquired by or combine with another company).

(ii)

The action described in subparagraph (B)(ii) (relating to restricting transactions with affiliates).

(D)

Senior executive officers’ compensation restricted

(i)

In general

The financial holding company subject to stricter standards shall not do any of the following without the prior written approval of the Board:

(I)

Pay any bonus to any senior executive officer.

(II)

Provide compensation to any senior executive officer at a rate exceeding that officer’s average rate of compensation (excluding bonuses, stock options, and profit-sharing) during the 12 calendar months preceding the calendar month in which the financial holding company subject to stricter standards became undercapitalized.

(ii)

Failing to submit plan

The Board shall not grant any approval under clause (i) with respect to a financial holding company subject to stricter standards that has failed to submit an acceptable capital restoration plan.

(E)

Consultation with other regulators

Before the Board makes a determination under subparagraph (B)(vi) with respect to a subsidiary that is a broker, dealer, government securities broker, government securities dealer, investment company, or investment adviser, the Board shall consult with the Securities and Exchange Commission and, in the case of any other subsidiary which is subject to any financial responsibility or capital requirement, any other appropriate regulator of such subsidiary with respect to the proposed determination of the Board and actions pursuant to such determination.

(8)

More stringent treatment based on other supervisory criteria

(A)

In general

If the Board determines (after notice and an opportunity for hearing) that a financial holding company subject to stricter standards is in an unsafe or unsound condition or, pursuant to section 8(b)(8) of the Federal Deposit Insurance Act (12 U.S.C. 1818(b)(8)), deems the financial holding company subject to stricter standards to be engaging in an unsafe or unsound practice, the Board may—

(i)

if the financial holding company subject to stricter standards is well capitalized, require the financial holding company subject to stricter standards to comply with one or more provisions of paragraphs (6) and (7), as if the institution were undercapitalized; or

(ii)

if the financial holding company subject to stricter standards is undercapitalized, take any one or more actions authorized under paragraph (7)(B) as if the financial holding company subject to stricter standards were significantly undercapitalized, after consultation with the primary financial regulatory agency for any functionally regulated subsidiary, subsidiary depository institution, or insurance company subsidiary that is likely to be significantly affected by such actions. In the case of an insurance company subsidiary of a financial holding company subject to stricter standards, the Board shall consult with the Federal Insurance Office.

(B)

Contents of plan

A plan that may be required pursuant to subparagraph (A)(i) shall specify the steps that the financial holding company subject to stricter standards will take to correct the unsafe or unsound condition or practice.

(9)

Implementation

The Board shall prescribe such regulations, issue such orders, and take such other actions the Board determines to be necessary to carry out this subsection.

(10)

Other authority not affected

This section does not limit any authority of the Board, any other Federal regulatory agency, or a State to take action in addition to (but not in derogation of) that required under this section.

(11)

Consultation

The Board and the Secretary of the Treasury shall consult with their foreign counterparts and through appropriate multilateral organizations to reach agreement to extend comprehensive and robust prudential supervision and regulation to all highly leveraged and substantially interconnected financial companies.

(12)

Administrative review of dismissal orders

(A)

Timely petition required

A director or senior executive officer dismissed pursuant to an order under paragraph (7)(B)(v)(II) may obtain review of that order by filing a written petition for reinstatement with the Board not later than 10 days after receiving notice of the dismissal.

(B)

Procedure

(i)

Hearing required

The Board shall give the petitioner an opportunity to—

(I)

submit written materials in support of the petition; and

(II)

appear, personally or through counsel, before 1 or more members of the Board or designated employees of the Board.

(ii)

Deadline for hearing

The Board shall—

(I)

schedule the hearing referred to in clause (i)(II) promptly after the petition is filed; and

(II)

hold the hearing not later than 30 days after the petition is filed, unless the petitioner requests that the hearing be held at a later time.

(iii)

Deadline for decision

Not later than 60 days after the date of the hearing, the Board shall—

(I)

by order, grant or deny the petition;

(II)

if the order is adverse to the petitioner, set forth the basis for the order; and

(III)

notify the petitioner of the order.

(C)

Standard for review of dismissal orders

The petitioner shall bear the burden of proving that the petitioner’s continued employment would materially strengthen the ability of the financial holding company subject to stricter standards—

(i)

to become well capitalized, to the extent that the order is based on the capital level of the financial holding company subject to stricter standards or such company’s failure to submit or implement a capital restoration plan; and

(ii)

to correct the unsafe or unsound condition or unsafe or unsound practice, to the extent that the order is based on paragraph (8)(A).

(13)

Enforcement authority for foreign financial holding company subject to stricter standards

(A)

Termination authority

If the Board believes that a condition, practice, or activity of a foreign financial holding company subject to stricter standards does not comply with this title or the rules or orders prescribed by the Board under this title or otherwise poses a threat to financial stability, the Board may, after notice and opportunity for a hearing, take such actions as necessary to mitigate such risk, including ordering a foreign financial holding company subject to stricter standards in the United States to terminate the activities of such branch, agency, or subsidiary.

(B)

Discretion to deny hearing

The Board may issue an order under paragraph (1) without providing for an opportunity for a hearing if the Board determines that expeditious action is necessary in order to protect the public interest.

(f)

Reports regarding rapid and orderly resolution and credit exposure

(1)

In general

The Board shall require each financial holding company subject to stricter standards incorporated or organized in the United States to report periodically to the Board on—

(A)

its plan for rapid and orderly resolution in the event of severe financial distress;

(B)

the nature and extent to which the financial holding company subject to stricter standards has credit exposure to other significant financial companies; and

(C)

the nature and extent to which other significant financial companies have credit exposure to the financial holding company subject to stricter standards.

(2)

No limiting effect

A rapid resolution plan submitted in accordance with this subsection shall not be binding on a receiver appointed under subtitle G, a bankruptcy court, or any other authority that is authorized or required to resolve the financial holding company subject to stricter standards or any of its subsidiaries or affiliates.

(3)

Reporting triggered by stress test results

(A)

Financial holding companies subject to stricter standards

Each time the results of a quarterly stress test under baseline or adverse conditions conducted by a financial holding company subject to stricter standards under section 1114(a) or the results of a stress test of that financial holding company subject to stricter standards conducted by the Board under subsection (g) indicate that the financial holding company subject to stricter standards is, in the determination of the Board, significantly or critically undercapitalized, that financial holding company subject to stricter standards shall submit a rapid resolution plan in accordance with this subsection that has been revised to address the causes of those results.

(B)

Financial companies that are not financial holding companies subject to stricter standards

Each time the results of a semiannual stress test under baseline or adverse conditions conducted by a financial company under section 1114(b) indicate that the financial company is, in the determination of the Board, significantly or critically undercapitalized, that financial company shall be required to report under this subsection. The Board shall prescribe regulations establishing expedited procedures for such reporting.

(C)

Transparency

Any rapid resolution plan submitted pursuant to this paragraph shall be subject to any restrictions regarding the disclosure of any other rapid resolution plan submitted pursuant to this subsection.

(g)

Stress tests

(1)

The Board, in coordination with the appropriate primary financial regulatory agency, shall conduct annual stress tests of each financial holding company subject to stricter standards. The Board may, as the Board determines appropriate, conduct stress tests of financial companies that are not financial holding companies subject to stricter standards. The Board shall publish a summary of the results of such stress tests.

(2)

The Board shall issue regulations to define the term stress test for purposes of this subsection. Such a definition shall provide for not less than 3 different sets of conditions under which a stress test should be conducted: baseline, adverse, and severely adverse scenarios.

(h)

Avoiding duplication

The Board shall take any action the Board deems appropriate to avoid imposing duplicative requirements under this subtitle for financial holding companies subject to stricter standards that are also bank holding companies.

(i)

Resolution plans required

(1)

In general

The Corporation and the Board, after consultation with the Council, shall jointly issue regulations requiring financial holding companies subject to stricter standards to develop plans designed to assist in the rapid and orderly resolution of the company.

(2)

Standards for resolution plans

The regulations required by paragraph (1) shall—

(A)

define the scope of financial holding companies subject to stricter standards covered by these requirements and may exempt financial holding companies subject to stricter standards from the requirements of this subsection if the Corporation and the Board jointly determine that exemption is consistent with the purposes of this title;

(B)

require each plan to demonstrate that any insured depository institution affiliated with a financial holding company subject to stricter standards is adequately insulated from the activities of any non-bank subsidiary of the institution or financial holding companies subject to stricter standards;

(C)

require that each plan include information detailing—

(i)

the nature and extent to which the financial holding company subject to stricter standards has credit exposure to other significant financial companies;

(ii)

the nature and extent to which other significant financial companies have credit exposure to the financial holding company subject to stricter standards;

(iii)

full descriptions of the financial holding company subject to stricter standards’ ownership structure, assets, liabilities, and contractual obligations; and

(iv)

the cross-guarantees tied to different securities, a list of major counterparties, and a process for determining where the financial holding company subject to stricter standards’ collateral is pledged; and

(D)

establish such other standards as the Corporation and the Board may jointly deem necessary to carry out this subsection.

(3)

Review of plans

(A)

Submission of plans

Each financial holding company subject to stricter standards that is subject to the requirement under paragraph (1) shall submit its plan to the Corporation and the Board.

(B)

Review

Upon the submission of a plan pursuant to subparagraph (A), and not less often than annually thereafter, the Corporation and the Board, after consultation with any Federal financial regulatory agencies with jurisdiction over the financial holding company subject to stricter standards (and, if the financial holding company subject to stricter standards is an insurance company, the Federal Insurance Office), shall jointly review such plan and may require a financial holding company subject to stricter standards to revise its plan consistent with the standards established pursuant to paragraph (2).

(4)

Enforcement

(A)

In general

The Corporation, after consultation with the Board, shall have the authority to take any enforcement action in section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) against any financial holding company subject to stricter standards that fails to comply with the requirements of this section or any regulations issued pursuant to this section.

(B)

No limitation on Board authority

Nothing under this subsection shall be construed as limiting any enforcement authority available to the Board under any other provision of law.

(5)

No limiting effect on receiver

A rapid resolution plan submitted under this section shall not be binding on a receiver appointed under subtitle G, a bankruptcy court, or any other authority that is authorized or required to resolve the financial holding company subject to stricter standards or any of its subsidiaries or affiliates.

(6)

No private right of action

No private right of action may be based on any resolution plan submitted under this section.

(j)

Rule of construction regarding consumer protection standards

The prudential standards imposed or recommended by the Board or the Council under this section shall not be construed as superseding—

(1)

any consumer protection standards promulgated under a State or Federal consumer protection law, including the Consumer Financial Protection Agency Act and the Federal Trade Commission Act; or

(2)

any investor protection standard that protects consumers (including public reporting requirements) imposed under State or Federal securities laws, including the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1944, and the Investment Advisors Act of 1944.

(k)

Rulemaking authority

The Board may prescribe such regulations and issue such orders as the Board, in consultation with the Council, determines to be necessary to carry out the provisions of this subtitle.

1105.

Mitigation of systemic risk

(a)

Council authority to restrict operations and activities

If the Council determines, after notice and an opportunity for hearing, that despite the higher prudential standards imposed pursuant to section 1104(a)(2), the size of a financial holding company subject to stricter standards or the scope, nature, scale, concentration, interconnectedness, or mix of activities directly or indirectly conducted by a financial holding company subject to stricter standards poses a grave threat to the financial stability or economy of the United States, the Council shall require the company to undertake 1 or more mitigatory actions described in subsection (d).

(b)

Consultation with Federal financial regulatory agencies

The Council, in determining whether to impose any requirement under this section that is likely to have a significant impact on a functionally regulated subsidiary, or a subsidiary depository institution, of a financial holding company subject to stricter standards under this title, shall consult with the Federal financial regulatory agency for any such subsidiary. With respect to any requirements under this section that is likely to have a significant effect on an insurance company, the Council shall consult with the Federal Insurance Office.

(c)

Factors for consideration

In reaching a determination described in subsection (a), the Council shall take into consideration the following factors, as appropriate—

(1)

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

(2)

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

(3)

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

(4)

the company’s reliance on leverage;

(5)

the extent and nature of the company’s transactions, relationships, and interconnectedness with other financial and non-financial companies;

(6)

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;

(7)

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

(8)

the extent to which prudential regulations mitigate the risk posed; and

(9)

any other factors identified that the Council determines appropriate.

(d)

Mitigatory actions

(1)

In general

Mitigatory action may include—

(A)

modifying the stricter prudential standards imposed pursuant to section 1104(a);

(B)

terminating 1 or more activities;

(C)

imposing conditions on the manner in which a financial holding company subject to stricter standards conducts 1 or more activities;

(D)

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

(E)

restricting the ability to offer a financial product or products; and

(F)

in the event the Council deems subparagraphs (A) through (E) inadequate as a means to address the identified risks, selling, divesting, or otherwise transferring business units, branches, assets, or off-balance sheet items to unaffiliated companies.

(2)

International competitiveness considerations

In making any decision pursuant to paragraph (1), the Council shall consider—

(A)

the need to maintain the international competitiveness of the United States financial services industry; and

(B)

the extent to which other countries with a significant financial services industry have established corresponding regimes to mitigate threats to financial stability or the economy posed by financial companies.

(e)

Due process

(1)

Notice and hearing

The Council shall give notice to a financial holding company subject to stricter standards, and opportunity for hearing if requested, that the financial holding company subject to stricter standards is being considered for mitigatory action pursuant to subsection (a). The hearing shall occur no later than 30 days after the financial company receives notice of the proposed action from the Council.

(2)

Notice

The Council shall notify the financial holding company subject to stricter standards of the Council’s determination, and, if the Council determines that mitigatory action is appropriate, require the company to submit a plan to the Council to implement the required mitigatory action.

(3)

Submission of plan

The financial holding company subject to stricter standards shall submit its proposed plan to implement the required mitigatory action or actions to the Council within 60 days from the date it receives notice under paragraph (2) or such shorter timeframe as the Council may require, if the Council determines an emergency situation merits expeditious implementation.

(4)

Approval or amendment of the plan

The Council shall review the plan submitted pursuant to paragraph (3) and determine whether the plan achieves the goal of mitigating a grave threat to the financial stability or the economy of the United States. The Council may approve or disapprove the plan with or without amendment.

(5)

Effect of plan approval

The Council shall—

(A)

notify a financial holding company subject to stricter standards by order, which shall be public, that the Council has approved the plan with or without amendment; and

(B)

direct the Board to require a financial holding company subject to stricter standards to comply with the plan to implement mitigatory action or actions within a reasonable timeframe after the Council’s approval and in accordance with such deadlines established in the plan.

(f)

Treasury secretary concurrence

Mitigatory action imposed by the Council involving the sale, divestiture, or transfer of more than $10,000,000,000 in total assets by a financial holding company subject to stricter standards shall require the Secretary of the Treasury’s concurrence before the issuance of the notice in subsection (e)(5)(A). If the sale, divestiture, or transfer of total assets by a financial holding company subject to stricter standards exceeds $100,000,000,000, the Secretary of the Treasury shall consult with the President before concurrence. The aforementioned amounts shall be indexed to inflation.

(g)

Failure to implement the plan

If a financial holding company subject to stricter standards fails to implement a plan for mitigatory action imposed pursuant to this section within a reasonable timeframe, the Council shall direct the Board to take such actions as necessary to ensure compliance with the plan.

(h)

Judicial review

For any plan required under this section, a financial holding company subject to stricter standards may, not later than 30 days after receipt of the Council’s notice under subsection (e)(2), bring an action in the United States district court for the judicial district in which the home office of such company is located, or in the United States District Court for the District of Columbia, for an order requiring that the requirement for a mitigatory action be rescinded. Judicial review under this section shall be limited to the imposition of a mitigatory action pursuant to subsection (e)(5). In reviewing the Council’s imposition of a mitigatory action, the court shall rescind or dismiss only those mitigatory actions it finds to be imposed in an arbitrary and capricious manner.

(i)

Rule of construction

Nothing in subsection (h) shall be construed as limiting the authority of a Federal financial regulatory agency to take action with respect to a financial company subject to the jurisdiction of such agency pursuant to applicable law other than this section.

1106.

Subjecting activities or practices to stricter prudential standards for financial stability purposes

(a)

In general

The Council may subject a financial activity or practice to stricter prudential standards under this subtitle 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 financial institutions or markets and local, minority, or underserved communities, and thereby threaten the stability of the financial system or economy.

(b)

Periodic review of activity identifications

(1)

Submission of assessment

The Board shall periodically submit a report to the Council containing an assessment of whether each activity or practice subjected to stricter prudential standards should continue to be subject to such standards.

(2)

Review and recision

The Council shall—

(A)

review the assessment submitted pursuant to paragraph (1) and any information or recommendation submitted by members of the Council regarding whether a financial activity subjected to stricter prudential standards continues to merit stricter prudential standards; and

(B)

rescind the action subjecting an activity to heightened prudential supervision if the Council determines that the activity no longer meets the criteria in subsection (a).

(c)

Procedure for subjecting or ceasing to subject an activity or practice to stricter prudential standards

(1)

Council and board coordination

The Council shall inform the Board if the Council is considering whether to subject or cease to subject an activity to stricter prudential standards in accordance with this section.

(2)

Notice and opportunity for consideration of written materials

(A)

In general

The Board shall, in an executive capacity on behalf of the Council, provide notice to financial companies that the Council is considering whether to subject an activity or practice to heightened prudential regulation, and shall provide a financial company engaged in such activity or practice 30 days to submit written materials to inform the Council’s decision. The Council shall decide, and the Board shall provide notice of the Council’s decision, within 60 days of the due date for such written materials.

(B)

Emergency exception

The Council may waive or modify the requirements of subparagraph (A) if the Council determines that such waiver or modification is necessary or appropriate to prevent or mitigate threats posed by an activity to financial stability. The Board shall, in an executive capacity on behalf of the Council, provide notice of such waiver or modification to financial companies as soon as practicable, which shall be no later than 24 hours after the waiver or modification.

(3)

Form of decision

The Board shall provide all notices required under this subsection by posting a notice on the Board’s web site and publishing a notice in the Federal Register.

1107.

Stricter regulation of activities and practices for financial stability purposes

(a)

Prudential Standards

(1)

Board authority to recommend

(A)

In general

To mitigate the risks to United States financial stability and the United States economy posed by financial activities and practices that the Council identifies for stricter prudential standards under section 1106 the Board, as agent of the Council, shall recommend prudential standards to the appropriate primary financial regulatory agencies to apply to such identified activities and practices.

(B)

Consultation with primary financial regulatory agencies

The Board, in developing recommendations under this subsection, shall consult with the relevant primary financial regulatory agencies with respect to any standard that is likely to have a significant effect on entities described in section 1000(b)(6). With respect to any standard that is likely to have a significant effect on insurance companies, the Board also shall consult with the Federal Insurance Office.

(2)

Criteria

The actions recommended under paragraph (1)—

(A)

shall be designed to maximize financial stability, taking costs to long-term financial and 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, nature, size, scale, concentration, or interconnectedness, or applying particular capital or risk-management requirements to the conduct of the activity) or prohibiting the activity or practice altogether.

(3)

Exception

The standards recommended by the Board and adopted by a primary financial regulatory agency pursuant to this section shall not apply to activities that a foreign financial parent conducts solely outside the United States if such activities are conducted solely by a company or other operating entity that is located outside the United States.

(b)

Implementation of recommended standards

(1)

Role of primary financial regulatory agency

Each primary financial regulatory agency is authorized to impose, require reports regarding, examine for compliance with, and enforce standards in accordance with this section with respect to those entities described in section 1000(b)(6) for which it is the primary financial regulatory agency. This authority is in addition to and does not limit any other authority of the primary financial regulatory agencies. 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 primary financial regulatory agency’s jurisdiction over the entity as if the agency action were taken under those statutes.

(2)

Imposition of standards

Standards imposed under this subsection shall be the standards recommended by the Board in accordance with subsection (a) or any other similar standards that the Board deems acceptable after consultation between the Board and the primary financial regulatory agency.

(3)

Primary financial regulatory agency response

A primary financial regulatory agency shall notify the Council and the Board in writing on whether and to what extent the agency has imposed the stricter prudential standards described in paragraph (2) within 60 days of the Board’s recommendation. A primary financial regulatory agency that fails to impose such standards shall provide specific justification for such failure to act in the written notice from the agency to the Council and Board.

1108.

Effect of rescission of identification

(a)

Notice

When the Council determines that a company or activity or practice no longer is subject to heightened prudential scrutiny, the Board shall inform the relevant primary financial regulatory agency or agencies (if different from the Board) of that finding.

(b)

Determination of primary financial regulatory agency to continue

A primary financial regulatory agency that has imposed stricter prudential standards for financial stability purposes under this subtitle shall determine whether standards that it has imposed under this subtitle should remain in effect.

1109.

Emergency financial stabilization

(a)

In general

Upon the written determination of the Council that a liquidity event exists that could destabilize the financial system (which determination shall be made upon a vote of not less than two-thirds of the members of the Council then serving) and with the written consent of the Secretary of the Treasury (after certification by the President that an emergency exists), the Corporation may create a widely-available program designed to avoid or mitigate adverse effects on systemic economic conditions or financial stability by guaranteeing obligations of solvent insured depository institutions or solvent depository institution holding companies (including any affiliates thereof), if necessary to prevent systemic financial instability during times of severe economic distress, except that a guarantee of obligations under this section may not include provision of equity in any form.

(b)

Policies and procedures

Prior to exercising any authority under this section, the Corporation shall establish policies and procedures governing the issuance of guarantees. The terms and conditions of any guarantees issued shall be established by the Corporation with the approval of the Secretary of the Treasury and the Financial Stability Oversight Council. Such terms and conditions may include the Corporation requiring collateral as a condition of any such guarantee.

(c)

Cap for guaranteed amount

(1)

In general

In connection with any program established pursuant to subsection (a) and subject to paragraph (2), the Corporation may not have guaranteed debt outstanding at any time of more than $500,000,000,000 (as indexed to reflect growth in assets of insured depository institutions and depository institution holding companies as determined by the Corporation).

(2)

Additional debt guarantee authority

If the Corporation, with the concurrence of the Council and the Secretary (in consultation with the President), determines that the Corporation must guarantee debt in excess of $500,000,000,000 (as indexed pursuant to paragraph (1)) to prevent systemic financial instability, the Corporation may transmit to the Congress a request for authority to guarantee debt in excess of $500,000,000,000 (as indexed pursuant to paragraph (1)). Such request shall be considered granted by Congress upon adoption of a joint resolution approving such request. Such joint resolution shall be considered in the Senate under expedited procedures.

(d)

Funding

(1)

Administrative expenses and cost of guarantees

A program established pursuant to this section shall require funding only for the purposes of paying administrative expenses and for paying a guarantee in the event that a guaranteed loan defaults.

(2)

Fees and other charges

The Corporation shall charge fees or other charges to all participants in such program established pursuant to this section to offset projected losses and administrative expenses. To the extent that a program established pursuant to this section has expenses or losses, the program will be funded entirely through fees or other charges assessed on participants in such program.

(3)

Excess funds

If at the conclusion of such program there are any excess funds collected from the fees associated with such program, the funds will be deposited into the Systemic Dissolution Fund established pursuant to section 1609(n).

(4)

Authority of corporation

For purposes of conducting a program established pursuant to this section, the Corporation—

(A)

may borrow funds from the Secretary of the Treasury, which shall be repaid in full with interest through fees and charges paid by participants in accordance with paragraph (2), and there shall be available to the Corporation amounts in the Treasury not otherwise appropriated, including for the payment of reasonable administrative expenses;

(B)

may not borrow funds from the Deposit Insurance Fund established pursuant to section 11(a)(4) of the Federal Deposit Insurance Act; and

(C)

may not borrow funds from the Systemic Dissolution Fund established pursuant to section 1609(n).

(5)

Back-up special assessment

To the extent that the funds collected pursuant to paragraph (2) are insufficient to cover any losses or expenses (including monies borrowed pursuant to paragraph (4)) arising from a program established pursuant to this section, the Corporation shall impose a special assessment solely on participants in the program.

(e)

Plan for maintenance or increase of lending

In connection with any application or request to participate in such program authorized pursuant to this section, a solvent entity seeking to participate in such program shall be required to submit to the Corporation a plan detailing how the use of such guaranteed funds will facilitate the increase or maintenance of such solvent company’s level of lending to consumers or small businesses.

(f)

Sunset of corporation’s authority

The Corporation’s authority under subsections (a) and (d) and the authority to borrow funds from the Treasury under section 1609(o) shall expire on December 31, 2013.

(g)

Rule of construction

For purposes of this section, a guarantee of deposits held by insured depository institutions shall not be treated as a debt guarantee program.

(h)

Definitions

For purposes of this section, the following definitions apply:

(1)

Corporation

The term Corporation means the Federal Deposit Insurance Corporation.

(2)

depository institution holding company

The term depository institution holding company has the meaning given the term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).

(3)

Insured depository institution

The term insured depository institution has the meaning given the term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).

(4)

Solvent

The term solvent means assets are more than the obligations to creditors.

1110.

Additional related amendments

(a)

Federal deposit insurance act related amendments

(1)

Suspension of parallel federal deposit insurance act authority

Effective upon the date of the enactment of this section through December 31, 2013, the Corporation may not exercise its authority under section 13(c)(4)(G)(i) of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)(i)) to establish any widely-available debt guarantee program for which section 1109 would provide authority.

(2)

Federal deposit insurance act authority preserved

Effective December 31, 2013, the Corporation shall have the same authority pursuant to section 13(c)(4)(G)(i) of the Federal Deposit Insurance Act as the Corporation had prior to the date of enactment of this Act.

(b)

Effect of default on an fdic guarantee

If an insured depository institution or depository institution holding company participating in a program under section 1109 or any participant in a debt guarantee program established pursuant to section 13(c)(4)(G)(i) of the Federal Deposit Insurance Act defaults on any obligation guaranteed by the Corporation after the date of enactment of this Act, the Corporation may—

(1)

appoint itself as receiver for the insured depository institution that defaults;

(2)

with respect to any other participating company that is not an insured depository institution that defaults—

(A)

require consideration of whether a determination shall be made as provided in section 1603 to resolve the company under subtitle G; and

(B)

if the Corporation is not appointed receiver pursuant to subtitle G within 30 days of the date of default, require the company to file a petition for bankruptcy under section 301 of title 11, United States Code, or file a petition for bankruptcy against the company under section 303 of title 11, United States Code.

(c)

Authority to file involuntary petition for bankruptcy

Section 303 of title 11, United States Code, is amended by adding at the end the following:

(m)

Notwithstanding subsections (a) and (b), an involuntary case may be commenced by the Federal Deposit Insurance Corporation against a depository institution holding company as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) or other company participating in a guarantee program established by the Corporation on the ground that the company has defaulted on a debt or obligation guaranteed by the Corporation.

.

(d)

Bankruptcy priority for defaults on debt guaranteed pursuant to section 1109

Section 507(a)(9) of title 11, United States Code, is amended by inserting before the period at the end the following: and allowed unsecured claims based upon any debt to the Federal Deposit Insurance Corporation that arose prior to the commencement of the case under this title, as a result of the debtor’s default on a guarantee provided by the Corporation pursuant to section 1109 of the Financial Stability Improvement Act of 2009 or the Federal Deposit Insurance Act, under a program established by the Corporation after the date of enactment of the Financial Stability Improvement Act of 2009.

1111.

Corporation may receive warrants when paying or risking taxpayer funds

(a)

In general

In connection with any payment, credit extension, or guarantee or any commitment under section 1109 or 1604, the Corporation may obtain from the insured depository institution, depository institution holding company (including any affiliates thereof), or covered financial company, as the case may be—

(1)

in the case of an insured depository institution, depository institution holding company (including any affiliates thereof), or covered financial company, the securities of which are traded on a national securities exchange, a warrant giving the right to the Corporation to receive nonvoting common stock or preferred stock in such financial institution, or voting stock with respect to which, the Corporation agrees not to exercise voting power, as the Corporation determines appropriate; or

(2)

in the case of any insured depository institution, depository institution holding company (including any affiliates thereof), or covered financial company other than one described in paragraph (1), a warrant for common or preferred stock, or a senior debt instrument from such financial institution, as described in subsection (b)(3).

(b)

Terms and conditions

The terms and conditions of any warrant or senior debt instrument required under subsection (a) shall meet the following requirements:

(1)

Purposes

Such terms and conditions shall, at a minimum, be designed—

(A)

to provide for reasonable participation by the Corporation, for the benefit of taxpayers, in equity appreciation in the case of a warrant or other equity security, or a reasonable interest rate premium, in the case of a debt instrument; and

(B)

to provide additional protection for the taxpayer against losses from such payment, extension of credit, or guarantee by the Corporation under this title.

(2)

Authority to sell, exercise, or surrender

The Corporation may sell, exercise, or surrender a warrant or any senior debt instrument received under this subsection, based on the conditions established under paragraph (1).

(3)

Conversion

The warrant shall provide that if, after the warrant is received by the Corporation under this subsection, the financial company that issued the warrant is no longer listed or traded on a national securities exchange or securities association, as described in subsection (a)(1), such warrants shall convert to senior debt, or contain appropriate protections for the Corporation to ensure that the Corporation is appropriately compensated for the value of the warrant, in an amount determined by the Corporation.

(4)

Protections

Any warrant representing securities to be received by the Corporation under this subsection shall contain anti-dilution provisions of the type employed in capital market transactions, as determined by the Corporation. Such provisions shall protect the value of the securities from market transactions such as stock splits, stock distributions, dividends, and other distributions, mergers, and other forms of reorganization or recapitalization.

(5)

Exercise price

The exercise price for any warrant issued pursuant to this subsection shall be set by the Corporation, in the interest of the taxpayers.

(6)

Sufficiency

The financial company shall guarantee to the Corporation that it has authorized shares of nonvoting stock available to fulfill its obligations under this subsection. Should the financial company not have sufficient authorized shares, including preferred shares that may carry dividend rights equal to a multiple number of common shares, the Corporation may, to the extent necessary, accept a senior debt note in an amount, and on such terms as will compensate the Corporation with equivalent value, in the event that a sufficient shareholder vote to authorize the necessary additional shares cannot be obtained.

(c)

Exceptions

(1)

The Corporation shall establish an exception to the requirements of this section and appropriate alternative requirements for any participating financial company that is legally prohibited from issuing securities and debt instruments, so as not to allow circumvention of the requirements of this section.

(2)

If the Corporation is providing a payment, extension of credit, or guarantee with regard to its authority under section 1604 and the Corporate determines that it is certain that at the conclusion of the Resolution Process the shareholders of all classes shall lose their entire investment and receive nothing therefor, then the requirements of this section shall not apply.

1112.

Examinations and enforcement actions for insurance and resolutions purposes

(a)

Examinations for insurance and resolutions purposes

Section 10(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)) is amended by striking whenever the Board of Directors determines and all that follows through the period and inserting or financial holding company subject to stricter standards (as defined in section 1000(b)(5) of the Financial Stability Improvement Act of 2009) whenever the Board of Directors determines a special examination of any such depository institution is necessary to determine the condition of such depository institution for insurance or such financial holding company subject to stricter standards for resolution purposes..

(b)

Enforcement authority

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

(1)

in paragraph (2)—

(A)

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

(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.

; and

(2)

by adding at the end the following new paragraph:

(6)

For purposes of 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.

.

1113.

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

(a)

Study required

The Chairman 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 effect on the efficiency of capital markets, costs imposed on the financial sector, and on national economic growth, of—

(1)

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

(2)

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

(3)

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

(4)

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

(5)

requirements to carry contingent capital or similar mechanisms;

(6)

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

(7)

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

(8)

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

The study shall include recommendations for the optimal structure of any limits considered in paragraphs (1) through (5) 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 the enactment of this title, the Chairman shall issue a report to the Congress containing any findings and determinations made in carrying out the study required under subsection (a).

1114.

Exercise of Federal Reserve authority

(a)

No decisions by federal reserve bank presidents

No provision of this title relating to the authority of the Board shall be construed as conferring any decision-making authority on presidents of Federal reserve banks.

(b)

Voting decisions by board

The Board of Governors of the Federal Reserve System shall not delegate the authority to make any voting decision that the Board is authorized or required to make under this title in contravention of section 11(k) of the Federal Reserve Act.

1115.

Stress tests

(a)

A financial holding company subject to stricter standards shall—

(1)

conduct quarterly stress tests; and

(2)

submit a report on its quarterly stress test to the head of the primary financial regulatory agency and to the Board at such time, in such form, and containing such information as the head of the primary financial regulatory agency may require.

(b)

A financial company that has more than $10,000,000,000 in total assets and is not a financial holding company subject to stricter standards shall—

(1)

conduct semiannual stress tests; and

(2)

submit a report on its semiannual stress test to the head of the primary financial regulatory agency and to the Board at such time, in such form, and containing such information as the head of the primary financial regulatory agency may require.

(c)

A stress test under this section shall provide for testing under each of the following sets of conditions:

(1)

Baseline.

(2)

Adverse.

(3)

Severely adverse.

(d)

The head of each primary financial regulatory agency, in coordination with the Board, shall issue regulations to define the term stress test for purposes of this section.

1116.

Contingent Capital

(a)

In general

The Board, in coordination with the appropriate primary financial regulatory agency, may, after notice and opportunity for comment, promulgate regulations that require a financial holding company subject to stricter standards to maintain a minimum amount of long-term hybrid debt that is convertible to equity when—

(1)

the Board determines that a specified financial company fails to meet prudential standards established by the Board; or

(2)

the Board has determined that threats to United States financial system stability make such a conversion necessary.

(b)

Factors to consider

In establishing regulations under this section, the Board shall consider—

(1)

an appropriate transition period for implementation of a conversion under this section;

(2)

capital requirements applicable to the specified financial company and its subsidiaries; and

(3)

any other factor that the Board deems appropriate.

(c)

Study required

The Chairman of the Council shall carry out a study to determine an optimal implementation of contingent capital requirements to maximize financial stability, minimize the probability of drawing on the Systemic Resolution Fund established under section 1609(n) in a financial crisis, and minimize costs for financial holding companies subject to stricter standards. To the extent practicable, the study shall take place with input from industry participants and international financial regulators. Such study shall include—

(1)

an evaluation of the characteristics and amounts of convertible debt that should be required, including possible tranche structure;

(2)

an analysis of possible trigger mechanisms for debt conversion, including violation of regulatory capital requirements, failure of stress tests, declaration of systemic emergency by regulators, market-based triggers and other trigger mechanisms;

(3)

an estimate of the costs of carrying contingent capital;

(4)

an estimate of the effectiveness of contingent capital requirements in reducing losses to the systemic resolution fund in cases of single-firm or systemic failure; and

(5)

recommendations for implementing legislation.

(d)

Report

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

1117.

Restriction on proprietary trading by designated financial holding companies

(a)

In general

If the Board determines that propriety trading by a financial holding company subject to stricter standards poses an existing or foreseeable threat to the safety and soundness of such company or to the financial stability of the United States, the Board may prohibit such company from engaging in propriety trading.

(b)

Exceptions permitted

The Board may exempt from the prohibition of subsection (a) proprietary trading that the Board determines to be ancillary to other operations of such company and not to pose a threat to the safety and soundness of such company or to the financial stability of the United States, including—

(1)

making a market in securities issued by such company;

(2)

hedging or managing risk;

(3)

determining the market value of assets of such company; and

(4)

propriety trading for such other purposes allowed by the Board by rule.

(c)

Rulemaking authority

The primary financial regulatory agencies of banks and bank holding companies shall jointly issue regulations to carry out this section.

(d)

Effective date

The provisions of this section shall take effect after the end of the 180-day period beginning on the date of the enactment of this title.

(e)

Proprietary trading defined

For purposes of this section and with respect to a company, the term proprietary trading means the trading of stocks, bonds, options, commodities, derivatives, or other financial instruments with the company’s own money and for the company’s own account.

1118.

Rule of construction

(a)

Construction

The authorities granted to agencies under this subtitle are in addition to any rulemaking, report-related, examination, enforcement, or other authority that such agencies may have under other law and in no way shall be construed to limit such other authority, except that any standards imposed for financial stability purposes under this subtitle shall supersede any conflicting less stringent requirements of the primary financial regulatory agency but only the extent of the conflict.

(b)

Agent responsibilities

For purposes of this subtitle, the term agent means the Board acting under section 1103(c) and coordinating with the Council in exercising authority under sections 1104 and 1107.

1119.

Antitrust savings clause

Nothing in this subtitle shall be construed to modify, impair, or supercede the operation of any of the antitrust laws. For purposes of the preceding sentence, the term antitrust laws has the meaning given such term 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 relates to unfair methods of competition.

C

Improvements to supervision and regulation of Federal depository institutions

1201.

Definitions

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

(1)

Board of governors

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

(2)

Corporation

The term Corporation means the Federal Deposit Insurance Corporation.

(3)

Office of the comptroller of the currency

The term Office of the Comptroller of the Currency means the office established by section 324 of the Revised Statutes (12 U.S.C. 1).

(4)

Office of thrift supervision

The term Office of Thrift Supervision means the office established by section 3 of the Home Owners’ Loan Act (12 U.S.C. 1462a).

(5)

Secretary

The term Secretary means the Secretary of the Treasury.

(6)

Transfer date

The term transfer date has the meaning provided in section 1205.

(7)

Certain other terms

The terms affiliate, bank holding company, control (when used with respect to a depository institution), depository institution, Federal banking agency, Federal savings association, including, insured branch, insured depository institution, savings association, State savings association, and subsidiary have the same meanings as in section 3 of the Federal Deposit Insurance Act.

1202.

Amendments to the Home Owners’ Loan Act relating to transfer of functions

(a)

Amendments to section 2

Section 2 of the Home Owners’ Loan Act (12 U.S.C. 1462) is amended—

(1)

by striking paragraph (1) and inserting the following new paragraph:

(1)

Board of governors

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

; and

(2)

by striking paragraph (3) and inserting the following new paragraph:

(3)

[repealed]

.

(b)

Amendments to section 3

Section 3 of the Home Owners’ Loan Act (12 U.S.C. 1462a) is amended—

(1)

by striking subsection (a) and inserting the following new subsection:

(a)

Establishment of division of thrift supervision

To carry out the purposes of this Act, there is hereby established the Division of Thrift Supervision, which shall be a division within the Office of the Comptroller of the Currency.

;

(2)

in subsection (b)—

(A)

by striking paragraph (1) and inserting the following new paragraph:

(1)

In general

The Division of Thrift Supervision shall be headed by a Senior Deputy Comptroller of the Currency who shall be subject to the general oversight of the Comptroller of the Currency.

;

(B)

in paragraph (2), by striking Director and inserting Comptroller of the Currency; and

(C)

by striking paragraphs (3) and (4);

(3)

by striking subsections (c), (d), and (e) and inserting the following new subsection:

(c)

Powers of the comptroller of the currency

The Comptroller of the Currency shall have all the powers, duties, and functions transferred by the Financial Stability Improvement Act of 2009 to the Comptroller of the Currency to carry out this Act.

;

(4)

by redesignating subsections (f) and (i) as subsections (d) and (e), respectively;

(5)

in subsection (d) (as so redesignated), by striking Director each place such term appears and inserting Comptroller of the Currency;

(6)

by striking subsections (g), (h), and (j); and

(7)

in subsection (e) (as so redesignated), by striking compensation of the Director and other employees of the Office and all other expenses thereof and inserting expenses incurred by the Comptroller of the Currency in carrying out this Act.

(c)

Amendments to section 4

Section 4 of the Home Owners’ Loan Act (12 U.S.C. 1463) is amended by striking Director each time it appears and inserting Comptroller of the Currency.

(d)

Amendments to section 5

(1)

Universal

Section 5 of the Home Owners’ Loan Act (12 U.S.C. 1464) is amended—

(A)

by striking Director and Director of the Office of Thrift Supervision each place such terms appear and inserting Comptroller of the Currency; and

(B)

by striking Director’s each place such term appears and inserting Comptroller of the Currency’s.

(2)

Specific provisions

(A)

Section 5(d)(2)(E) of the Home Owners’ Loan Act is amended by striking or the Resolution Trust Corporation, as appropriate, each place such term appears.

(B)

Section 5(d)(3)(B) of the Home Owners’ Loan Act is amended by striking or the Resolution Trust Corporation.

(e)

Amendments to sections 8 and 9

Sections 8 and 9 of the Home Owners’ Loan Act (12 U.S.C. 1466a and 1467) are each amended by striking Director each place such term appears and inserting Comptroller of the Currency.

(f)

Technical and conforming amendments

(1)

Section 3

The heading for section 3 of the Home Owners’ Loan Act is amended by striking Director of the Office of Thrift Supervision and inserting Division of Thrift Supervision.

(2)

Section 5

The heading for paragraph (2)(E)(ii) of section 5(d) of the Home Owners’ Loan Act and the heading for paragraph (3)(B) of such section are each amended by striking OR RTC.

(g)

Clerical amendment

The table of contents section for the Home Owners’ Loan Act is amended by striking the item relating to section 3 and inserting the following new item:

Sec. 3. Division of Thrift Supervision.

.

1203.

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

There shall be in the Department of the Treasury a bureau, the chief officer of which bureau shall be called the Comptroller of the Currency, and shall perform the duties of the Comptroller of the Currency under the general direction of the Secretary of the Treasury. The Comptroller of the Currency shall have the same authority over matters as were vested in the Director of the Office of Thrift Supervision or the Office of Thrift Supervision on the day before the date of enactment of the Financial Stability Improvement Act of 2009 other than those authorities with respect to savings and loan holding companies and any affiliate of any such company (other than a savings association) as were vested in the Director of the Office of Thrift Supervision on such date. 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.

.

(b)

Amendments to section 327

Section 327 of the Revised Statutes of the United States (12 U.S.C. 4) is amended to read as follows:

327.

Deputy comptrollers

(a)

Appointment

The Secretary of the Treasury shall appoint no more than 5 Deputy Comptrollers of the Currency—

(1)

1 of whom shall be designated the Senior Deputy Comptroller for National Banks, who shall oversee the regulation and supervision of national banks; and

(2)

1 of whom shall be designated the Senior Deputy Comptroller for Thrift Supervision, who shall oversee the regulation and supervision of Federal savings associations, and who shall coordinate with the Office of Thrift Supervision pursuant to section 1211.

(b)

Pay

The Secretary of the Treasury shall fix the compensation of the Deputy Comptrollers of the Currency and provide such other benefits as the Secretary may determine to be appropriate.

(c)

Oath of office; Duties

Each Deputy Comptroller shall take the oath of office and shall perform such duties as the Comptroller of the Currency shall direct.

(d)

Service as acting comptroller

During a vacancy in the office or during the absence or disability of the Comptroller, each Deputy Comptroller shall possess the power and perform the duties attached by law to the Office of the Comptroller under such order of succession as the Comptroller shall direct.

.

(c)

Amendment to section 329

Section 329 of the Revised Statutes of the United States (12 U.S.C. 11) is amended by inserting or any Federal savings association before the period at the end.

(d)

Amendment to section 5240

The fourth sentence of the second undesignated paragraph of Section 5240 of the Revised Statutes of the United States (12 U.S.C. 481) is amended by striking Secretary of the Treasury; and all that follows through the end of the sentence, and inserting Secretary of the Treasury; the employment and compensation of examiners, chief examiners, reviewing examiners, assistant examiners, and of the other employees of the office of the Comptroller of the Currency whose compensation is and shall be paid from assessments on banks or affiliates thereof or from other fees or charges imposed pursuant to this subchapter shall be set and adjusted pursuant to chapter 71 of title 5, United States Code and without regard to the provisions of other laws applicable to officers or employees of the United States..

(e)

Amendment to section 5240

The first sentence in the first undesignated paragraph of Section 5240 of the Revised Statutes of the United States (12 U.S.C. 482) is amended by inserting pursuant to chapter 71 of title 5, United States Code, after shall,.

(f)

Effective date

Subsection (b) shall take effect on the date of the enactment of this Act.

1204.

Power and duties transferred

(a)

Director of the office of thrift supervision

(1)

Transfer of functions

Except as otherwise provided in this subtitle, all functions of the Director of the Office of Thrift Supervision are transferred to the Office of the Comptroller of the Currency.

(2)

Comptroller’s authority

Except as otherwise provided in this subtitle, the Comptroller of the Currency shall succeed to all powers, authorities, rights, and duties that were vested in the Director of the Office of Thrift Supervision under Federal law, including the Home Owners’ Loan Act, on the day before the transfer date other than those powers, authorities, rights, and duties with respect to savings and loan holding companies and any affiliate of any such company (other than a savings association) as were vested in the Director of the Office of Thrift Supervision on such date.

(3)

Functions relating to supervision of state savings associations

(A)

Transfer of functions

All functions of the Director of the Office of Thrift Supervision relating to the supervision and regulation of State savings associations are transferred to the Corporation.

(B)

Corporation’s authority

The Corporation shall succeed to all powers, authorities, rights, and duties that were vested in the Director of the Office of Thrift Supervision under Federal law, including the Home Owners’ Loan Act, on the day before the transfer date, relating to the supervision and regulation of State savings associations.

(4)

Functions relating to supervision of savings and loan holding companies

(A)

Transfer of functions

All functions of the Director of the Office of Thrift Supervision relating to the supervision and regulation of Savings and Loan Holding Companies are transferred to the Board.

(B)

Board authority

The Board shall succeed to all powers, authorities, rights, and duties that were vested in the Director of the Office of Thrift Supervision under Federal law, including the Home Owners’ Loan Act, on the day before the transfer date, relating to the supervision and regulation of Savings and Loan Holding Companies.

(b)

Appropriate federal banking agency

Section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) is amended in subsection (q)—

(1)

by amending paragraph (1) to read as follows:

(1)

the Comptroller of the Currency in the case of any national bank, Federal savings association or any Federal branch or agency of a foreign bank;

;

(2)

in paragraph (2)(E), by striking and at the end;

(3)

in paragraph (2)(F), by adding and at the end after the semicolon;

(4)

after paragraph (2)(F), by inserting the following new subparagraph:

(G)

any savings and loan holding company and any subsidiary of a savings and loan holding company (other than a savings association); and

;

(5)

by amending paragraph (3) to read as follows:

(3)

the Federal Deposit Insurance Corporation in the case of a State nonmember insured bank, a State savings association or a foreign bank having an insured branch.

; and

(6)

by striking paragraph (4).

(c)

Transfer of consumer financial protection functions

Nothing in subsection (a) or (b) shall affect any transfer of consumer financial protection functions of the Comptroller of the Currency and the Director of the Office of Thrift Supervision to the Consumer Financial Protection Agency as provided in the Consumer Financial Protection Agency Act of 2009.

(d)

Effective date

Subsections (a) and (b) shall become effective on the transfer date.

1205.

Transfer date

(a)

In general

Except as provided in subsection (b), the date for the transfer of functions to the Office of the Comptroller of the Currency and the Corporation under section 1204 shall be 1 year after the date of enactment of this title.

(b)

Extension permitted

(1)

Notice required

The Secretary, in consultation with the Comptroller of the Currency and the Director of the Office of Thrift Supervision, may designate a calendar date for the transfer of functions of the Office of Thrift Supervision to the Office of the Comptroller of the Currency, and the Corporation under section 1204 that is later than 1 year after the date of enactment of this title if the Secretary—

(A)

transmits to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives—

(i)

a written determination that orderly implementation of this subtitle is not feasible on the date that is 1 year after the date of enactment of this subtitle;

(ii)

an explanation of why an extension is necessary for the orderly implementation of this subtitle; and

(iii)

a description of the steps that will be taken to effect an orderly and timely implementation of this subtitle within the extended time period; and

(B)

publishes notice of that designated later date in the Federal Register.

(2)

Extension limited

In no case shall any date designated under paragraph (1) be later than 18 months after the date of enactment of this subtitle.

(3)

Effect on references to transfer date

If the Secretary takes the actions provided in paragraph (1) for designating a date for the transfer of functions to the Office of the Comptroller of the Currency, and the Corporation under section 1204, references in this title to transfer date shall mean the date designated by the Secretary.

1206.

Expiration of term of comptroller

(a)

In general

Notwithstanding section 325 of the Revised Statutes of the United States, the term of the person serving as Comptroller on the date of the enactment of this title shall terminate as of such date.

(b)

Acting comptroller

Subject to sections 3345, 3346, and 3347 of title 5, United States Code, the President may designate a person to serve as acting Comptroller and perform the functions and duties of the Comptroller until a Comptroller has been appointed and qualified in the manner established in section 325 of the Revised Statutes of the United States.

1207.

Office of Thrift Supervision abolished

Effective 90 days after the transfer date, the position of Director of the Office of Thrift Supervision and the Office of Thrift Supervision are abolished.

1208.

Savings provisions

(a)

Office of thrift supervision

(1)

Existing rights, duties, and obligations not affected

Sections 1204(a) and 1207 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 subtitle 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 Director of the Office of Thrift Supervision transferred to the Comptroller of the Currency by this title, the Comptroller of the Currency or the Office of the Comptroller of the Currency shall be substituted for the Director of the Office of Thrift Supervision or the Office of Thrift Supervision, as the case may be, as a party to the action or proceeding as of the transfer date; and

(B)

for any action or proceeding arising out of a function of the Director of the Office of Thrift Supervision transferred to the Corporation by this title, the Chairman of the Corporation shall be substituted for the Director of the Office of Thrift Supervision as a party to the action or proceeding as of 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 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 those 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 Office of the Comptroller of the Currency, in the case of a function of the Director of the Office of Thrift Supervision transferred to the Comptroller of the Currency, until modified, terminated, set aside, or superseded in accordance with applicable law by the Office of the Comptroller of the Currency, by any court of competent jurisdiction, or by operation of law; and

(2)

the Corporation, in the case of a function of 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)

Continuation of existing OTS enforcement actions

Any formal or informal enforcement action taken by the Director of the Office of Thrift Supervision with respect to a savings and loan holding company, a subsidiary of a savings and loan holding company (other than a savings association) or an institution-affiliated party of a savings and loan holding company or such a subsidiary, that is in effect on the day before the date of the enactment of this title shall continue to be effective and enforceable against such company, subsidiary, or institution-affiliated party after such date as if—

(1)

such savings and loan holding company, or the savings and loan holding company related to such subsidiary or institution-affiliated party, had been a bank holding company on the effective date of the final enforcement action; and

(2)

the action had been taken by the Board, unless otherwise terminated or modified by the Board.

(d)

Identification of regulations continued

(1)

By office of the comptroller of the currency

Not later than the transfer date, the Comptroller of the Currency shall—

(A)

after consultation with the Chairperson of 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 such regulations in the Federal Register.

(2)

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 such regulations in the Federal Register.

(e)

Status of regulations proposed or not yet effective

(1)

Proposed regulations

Any proposed regulation of the Office of Thrift Supervision, which that agency, in performing functions transferred by this title, has proposed before the transfer date but has not published as a final regulation before that date, shall be deemed to be a proposed regulation of the Office of the Comptroller of the Currency, or the Corporation, as appropriate, according to its terms.

(2)

Regulations not yet effective

Any interim or final regulation of the Office of Thrift Supervision, which that agency, in performing functions transferred by this title, has published before the transfer date but which has not become effective before that date, shall become effective as a regulation of the Office of the Comptroller of the Currency, or the Corporation, as appropriate, according to its terms.

1209.

Regulations and orders

In addition to any powers transferred to the Comptroller of the Currency by this title, the Comptroller of the Currency may prescribe such regulations and issue such orders as the Comptroller of the Currency determines to be appropriate to carry out this title and the powers and duties transferred to the Comptroller of the Currency by this title.

1210.

Coordination of transition activities

Before the transfer date, the Comptroller of the Currency shall—

(1)

consult and cooperate with the Office of Thrift Supervision to facilitate the orderly transfer of functions to the Comptroller of the Currency;

(2)

determine and redetermine, from time to time—

(A)

the amount of funds necessary to pay any expenses associated with the transfer of functions (including expenses for personnel, property, and administrative services) during the period beginning on the date of enactment of this title and ending on the transfer date;

(B)

what personnel are appropriate to facilitate the orderly transfer of functions by this title; and

(C)

what property and administrative services are necessary to support the Office of the Comptroller of the Currency during the period beginning on the date of enactment of this title and ending on the transfer date; and

(3)

take such actions as may be necessary to provide for the orderly implementation of this title.

1211.

Interim responsibilities of office of the comptroller of the currency and office of thrift supervision

(a)

In general

When requested by the Comptroller of the Currency to do so before the transfer date, the Office of Thrift Supervision shall—

(1)

pay to the Comptroller of the Currency, from funds obtained by the Office of Thrift Supervision through assessments, fees, or other charges that the Office of Thrift Supervision is authorized by law to impose, such amounts that the Comptroller of the Currency determines to be necessary under section 1210(2)(A);

(2)

detail to the Office of the Comptroller of the Currency such personnel as the Comptroller of the Currency determines to be appropriate under section 1210(2)(B); and

(3)

make available to the Office of the Comptroller of the Currency such property and provide the Office of the Comptroller of the Currency such administrative services as the Comptroller of the Currency determines to be necessary under section 1210(2)(C).

(b)

Notice required

The Comptroller of the Currency shall give the Office of Thrift Supervision reasonable prior notice of any request that the Office of the Comptroller of the Currency intends to make under subsection (a).

1212.

Employees transferred

(a)

In general

(1)

OTS employees

(A)

In general

All employees of the Office of Thrift Supervision shall be transferred to either the Comptroller of the Currency or the Corporation for employment.

(B)

Allocating employees for transfer to receiving agencies

The Director of the Office of Thrift Supervision, the Comptroller of the Currency, and the Chairperson of the Corporation shall—

(i)

jointly determine the number of employees of the Office of Thrift Supervision necessary to perform or support—

(I)

the functions of the Office of Thrift Supervision that are transferred to the Office of the Comptroller of the Currency by this title; and

(II)

the functions of the Office of Thrift Supervision that are transferred to the Corporation by this title;

(ii)

consistent with the numbers determined under clause (ii), jointly identify employees of the Office of Thrift Supervision for transfer to the Office of the Comptroller of the Currency or the Corporation in a manner that the Director of the Office of Thrift Supervision, the Comptroller of the Currency, and the Chairperson of the Corporation, in their discretion, deem equitable.

(2)

Transfer of employees performing consumer financial protection functions

Nothing in paragraph (1) shall affect the transfer of employees performing or supporting consumer financial protection functions of the Comptroller of the Currency and the Director of the Office of Thrift Supervision to the Consumer Financial Protection Agency as provided in the Consumer Financial Protection Agency Act of 2009.

(3)

Appointment authority for excepted service transferred

(A)

In general

In the case of employees occupying positions in the excepted service, any appointment authority established pursuant to law or regulations of the Office of Personnel Management for filling such positions shall be transferred, subject to subparagraph (B).

(B)

Declining transfers allowed

The Office of the Comptroller of the Currency and the Corporation may decline to accept a transfer of authority under subparagraph (A) (and the employees appointed pursuant thereto) to the extent that such authority relates to positions excepted from the competitive service because of their confidential, policy-making, policy-determining, or policy-advocating character.

(b)

Timing of transfers and position assignments

Each employee to be transferred under this section shall—

(1)

be transferred not later than 90 days after the transfer date; and

(2)

receive notice of his or her position assignment not later than 120 days after the effective date of his or her transfer.

(c)

Transfer of function

(1)

In general

Notwithstanding any other provision of law, the transfer of employees shall be deemed a transfer of functions for the purpose of section 3503 of title 5, United States Code.

(2)

Priority of this subtitle

If any provision of this subtitle conflicts with any protection provided to transferred employees under section 3503 of title 5, United States Code, the provisions of this subtitle shall control.

(d)

Employees’ status and eligibility

The transfer of functions and employees under this title, and the abolition of the Office of Thrift Supervision, shall not affect the status of the transferred employees as employees of an agency of the United States under any provision of law.

(e)

Equal status and tenure positions

Each employee transferred from the Office of Thrift Supervision shall be placed in a position at either the Office of the Comptroller of the Currency or the Corporation with the same status and tenure as he or she held on the day before the transfer date.

(f)

No additional certification requirements

Examiners transferred to the Office of the Comptroller of the Currency or the Corporation shall not be subject to any additional certification requirements before being placed in a comparable examiner’s position at the Office of the Comptroller of the Currency or the Corporation examining the same types of institutions as they examined before they were transferred.

(g)

Personnel actions limited

(1)

3-year protection

(A)

In general

Except as provided in paragraph (2), each affected employee shall not, during the 3-year period beginning on the transfer date, be involuntarily separated, or involuntarily reassigned outside his or her locality pay area as defined by the Office of Personnel Management.

(B)

Affected employees

For purposes of this paragraph, the term affected employee means—

(i)

an employee transferred from the Office of Thrift Supervision holding a permanent position on the day before the transfer date; and

(ii)

an employee of the Office of the Comptroller of the Currency holding a permanent position on the day before the transfer date.

(2)

Exceptions

Paragraph (1) does not limit the right of the Office of the Comptroller of the Currency or the Corporation to—

(A)

separate an employee for cause or for unacceptable performance; or

(B)

terminate an appointment to a position excepted from the competitive service because of its confidential policy-making, policy-determining, or policy-advocating character.

(h)

Pay

(1)

1-year protection

Except as provided in paragraph (2), each employee transferred from the Office of Thrift Supervision shall, during the 1-year period beginning on the transfer date, receive pay at a rate not less than the basic rate of pay (including any geographic differential) that the employee received during the 1-year period immediately before the transfer.

(2)

Exceptions

Paragraph (1) does not limit the right of the Office of the Comptroller of the Currency or the Corporation to reduce a transferred employee’s rate of basic pay—

(A)

for cause;

(B)

for unacceptable performance; or

(C)

with the employee’s consent.

(3)

Protection only while employed

Paragraph (1) applies to a transferred employee only while that employee remains employed by the Office of the Comptroller of the Currency or the Corporation.

(4)

Pay increases permitted

Paragraph (1) does not limit the authority of the Office of the Comptroller of the Currency or the Corporation to increase a transferred employee’s pay.

(i)

Benefits

(1)

Retirement benefits for transferred employees

(A)

In general

(i)

Continuation of existing retirement plan

Each employee transferred from the Office of Thrift Supervision may remain enrolled in his or her existing retirement plan or plans as long as he or she remains employed by the Office of the Comptroller of the Currency or the Corporation.

(ii)

Employer’s contribution

The Office of the Comptroller of the Currency or the Corporation shall pay any employer contributions to the existing retirement plan of each employee transferred from the Office of Thrift Supervision as required under that plan.

(B)

Definition

For purposes of this paragraph, the term existing retirement plan means, with respect to any employee transferred under this section, the particular retirement plan (including the Financial Institutions Retirement Fund) and any associated thrift savings plan of the agency from which the employee was transferred, which the employee was enrolled in on the day before the transfer date.

(2)

Benefits other than retirement benefits

(A)

During 1st year

(i)

Existing plans continue

Each transferred employee may, for 1 year after the transfer date, retain membership in any other employee benefit program of the Office of Thrift Supervision, including a dental, vision, long term care, or life insurance program, to which the employee belonged on the day before the transfer date.

(ii)

Employer’s contribution

The Office of the Comptroller of the Currency or the Corporation shall pay any employer cost in continuing to extend coverage in the benefit program to the employee as required under that program or negotiated agreements.

(B)

Dental, vision, or life insurance after 1st year

If, after the 1-year period beginning on the transfer date, the Office of the Comptroller of the Currency or the Corporation decides not to continue participation in any dental, vision, or life insurance program of the Office of Thrift Supervision, an employee transferred from the Office of Thrift Supervision pursuant to this title who is a member of such a program may, before the decision of the Office of the Comptroller of the Currency or the Corporation takes effect, elect to enroll, without regard to any regularly scheduled open season, in—

(i)

the enhanced dental benefits program established by chapter 89A of title 5, United States Code;

(ii)

the enhanced vision benefits established by chapter 89B of title 5, United States Code; and

(iii)

the Federal Employees Group Life Insurance Program established by chapter 87 of title 5, United States Code, without regard to any requirement of insurability.

(C)

Long term care insurance after 1st year

If, after the 1-year period beginning on the transfer date, the Office of the Comptroller of the Currency or the Corporation decides not to continue participation in any long term care insurance program of the Office of Thrift Supervision, an employee transferred from the Office of Thrift Supervision pursuant to this title who is a member of such a program may, before the decision of the Office of the Comptroller of the Currency or the Corporation takes effect, elect to apply for coverage under the Federal Long Term Care Insurance Program established by chapter 90 of title 5, United States Code, under the underwriting requirements applicable to a new active workforce member (as defined in Part 875, title 5, Code of Federal Regulations).

(D)

Employee’s contribution

(i)

In general

Subject to clause (ii), an individual enrolled in the Federal Employees Health Benefits program under this subparagraph shall pay any employee contribution required by the plan.

(ii)

Cost differential

The difference in costs between the benefits that the Office of Thrift Supervision is providing on the date of enactment of this title and the benefits provided by this section shall be paid by the Comptroller of the Currency or the Corporation.

(iii)

Funds transfer

The Office of the Comptroller of the Currency or the Corporation shall transfer to the Federal Employees Health Benefits Fund established under section 8909 of title 5, United States Code, an amount determined by the Director of the Office of Personnel Management, after consultation with the Office of the Comptroller of the Currency or the Corporation and the Office of Management and Budget, to be necessary to reimburse the Fund for the cost to the Fund of providing benefits under this subparagraph not otherwise paid for by the employee under clause (i).

(E)

Special provisions to ensure continuation of life insurance benefits

(i)

In general

An annuitant (as defined in section 8901(3) of title 5, United States Code) who is enrolled in a life insurance plan administered by the Office of Thrift Supervision on the day before the transfer date shall be eligible for coverage by a life insurance plan under sections 8706(b), 8714a, 8714b, and 8714c of title 5, United States Code, or in a life insurance plan established by the Office of the Comptroller of the Currency or the Corporation, without regard to any regularly scheduled open season and requirement of insurability.

(ii)

Employee’s contribution

(I)

In general

Subject to subclause (II), an individual enrolled in a life insurance plan under this clause shall pay any employee contribution required by the plan.

(II)

Cost differential

The difference in costs between the benefits that the Office of Thrift Supervision is providing on the date of enactment of this title and the benefits provided by this section shall be paid by the Comptroller of the Currency or the Corporation.

(III)

Funds transfer

The Office of the Comptroller of the Currency or the Corporation shall transfer to the Employees’ Life Insurance Fund established under section 8714 of title 5, United States Code, an amount determined by the Director of the Office of Personnel Management, after consultation with the Office of the Comptroller of the Currency or the Corporation and the Office of Management and Budget, to be necessary to reimburse the Fund for the cost to the Fund of providing benefits under this subparagraph not otherwise paid for by the employee under subclause (I).

(IV)

Credit for time enrolled in other plans

For employees transferred under this section, enrollment in a life insurance plan administered by the Office of the Comptroller of the Currency, the Office of Thrift Supervision, or the Corporation immediately before enrollment in a life insurance plan under chapter 87 of title 5, United States Code, shall be considered as enrollment in a life insurance plan under that chapter for purposes of section 8706(b)(1)(A) of title 5, United States Code.

(j)

Equitable treatment

In administering the provisions of this section, the Office of the Comptroller of the Currency and the Corporation—

(1)

shall take no action that would unfairly disadvantage transferred employees relative to other employees of the Office of the Comptroller of the Currency or the Corporation based on their prior employment by the Office of Thrift Supervision;

(2)

may take such action as is appropriate in individual cases so that employees transferred under this section receive equitable treatment, with respect to those employees’ status, tenure, pay, benefits (other than benefits under programs administered by the Office of Personnel Management), and accrued leave or vacation time, for prior periods of service with any Federal agency;

(3)

shall, jointly with the Director of the Office of Thrift Supervision, develop and adopt procedures and safeguards designed to ensure that the requirements of this subsection are met; and

(4)

shall conduct a study detailing the position assignments of all employees transferred pursuant to subsection (a), describing the procedures and safeguards adopted pursuant to paragraph (3), and demonstrating that the requirements of this subsection have been met; and shall, not later than 365 days after the transfer date, submit a copy of such study to Congress.

1213.

Property transferred

(a)

In general

Not later than 90 days after the transfer date, all property of the Office of Thrift Supervision shall be transferred to the Office of the Comptroller of the Currency or the Corporation, allocated in a manner consistent with section 1212(a).

(b)

Contracts related to property transferred

All contracts, agreements, leases, licenses, permits, and similar arrangements relating to property transferred to the Office of the Comptroller of the Currency or the Corporation by this section shall be transferred to the Office of the Comptroller of the Currency or the Corporation together with that property.

(c)

Preservation of property

Property identified for transfer under this section shall not be altered, destroyed, or deleted before transfer under this section.

(d)

Property defined

For purposes of this section, the term property includes all real property (including leaseholds) and all personal property (including computers, furniture, fixtures, equipment, books, accounts, records, reports, files, memoranda, paper, reports of examination, work papers and correspondence related to such reports, and any other information or materials).

1214.

Funds transferred

Except to the extent needed to dispose of affairs under section 1215, all funds that, on the day before the transfer date, are available to the Director of the Office of Thrift Supervision to pay the expenses of the Office of Thrift Supervision shall be transferred to the Office of the Comptroller of the Currency or the Corporation, allocated in a manner consistent with section 1212(a), on the transfer date.

1215.

Disposition of affairs

(a)

In general

During the 90-day period beginning on the transfer date, the Director of the Office of Thrift Supervision—

(1)

shall, solely for the purpose of winding up the affairs of the agency related to any function transferred to the Office of the Comptroller of the Currency or the Corporation by this subtitle—

(A)

manage any employees of the Office of Thrift Supervision and provide for the payment of the compensation and benefits of any such employees that accrue before the transfer date; and

(B)

manage any property of the Office of Thrift Supervision until the property is transferred under section 1213; and

(2)

may take any other action necessary to wind up the affairs of the Office of Thrift Supervision relating to the transferred functions.

(b)

Authority and status of director

(1)

In general

Notwithstanding the transfers of functions under this subtitle, the Director of the Office of Thrift Supervision shall, during the 90-day period beginning on the transfer date, retain and may exercise any authority vested in the Director on the day before the transfer date that is necessary to carry out the requirements of this subtitle during that period.

(2)

Other provisions

For purposes of paragraph (1), the Director of the Office of Thrift Supervision shall, during the 90-day period beginning on the transfer date, continue to be—

(A)

treated as an officer of the United States; and

(B)

entitled to receive compensation at the same annual rate of basic pay that he or she was receiving on the day before the transfer date.

1216.

Continuation of services

Any agency, department, or other instrumentality of the United States, and any successor to any such agency, department, or instrumentality, that was, before the transfer date, providing support services to the Office of Thrift Supervision in connection with functions to be transferred to the Office of the Comptroller of the Currency or the Corporation, shall—

(1)

continue to provide those services, subject to reimbursement, until the transfer of those functions is complete; and

(2)

consult with any such agency to coordinate and facilitate a prompt and orderly transition.

1217.

Contracting and leasing authority

In addition to any powers transferred to the Comptroller of the Currency by this subtitle, the Comptroller of the Currency may—

(1)

enter into and perform contracts, execute instruments, and acquire in any lawful manner such goods and services, or real or personal property, or interest in property, as the Comptroller of the Currency determines to be necessary or convenient to carry out the duties and responsibilities of the Comptroller of the Currency; and

(2)

hold, maintain, sell, lease, or otherwise dispose of any real or personal property or interest in property without regard to title 40, United States Code, title III of the Federal Properties and Administrative Services Act of 1949 (41 U.S.C. 251 et seq.), and other Federal laws of a similar type governing the procurement of goods and services or the acquisition or disposition of any property or interest in property by Federal agencies.

1218.

Treatment of savings and loan holding companies

Section 10 of the Home Owners’ Loan Act (12 U.S.C. 1467a) is amended as follows:

(1)

In subsection (a)—

(A)

in paragraph (1)(A), by striking Director and inserting Board;

(B)

in paragraph (1)(D), by striking clause (i) and inserting: “(i) In general.—.

(i)

In general

Except as provided in clause (ii), the term savings and loan holding company means any company that directly or indirectly controls a savings association or that controls any company that is a savings and loan holding company, and that is either—

(I)

a fraternal beneficiary society, as defined in section 501(c)(8) of the Internal Revenue Code of 1986; or

(II)

a company that is, together with all of its affiliates on a consolidated basis, predominantly engaged in the business of insurance.

;

(C)

in paragraph (1)(F), by striking Director and inserting Board;

(D)

in paragraph (1), by inserting at the end the following new subparagraph:

(K)

Board

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

.

(E)

in paragraph (2)(D), by striking Director and inserting Board;

(F)

in paragraph (3)(A), by striking Director and inserting Board; and

(G)

in paragraph (4), by striking Director and inserting Board.

(2)

In subsection (b), by striking Director each place it appears and inserting Board.

(3)

In subsection (c)—

(A)

in paragraph, (2)(F)(i)—

(i)

by striking of Governors of the Federal Reserve System; and

(ii)

by striking Director and inserting Board;

(B)

in paragraph (2)(G), by striking Director and inserting Board;

(C)

in paragraph (4)(A), by striking Director and inserting Board;

(D)

in paragraph (4)(B)—

(i)

in the heading, by striking director and inserting Board; and

(ii)

by striking the Director shall and inserting the Board shall;

(E)

in paragraph (4)(C)—

(i)

in the heading, by striking director and inserting Board; and

(ii)

by striking the Director may and inserting the Board may;

(F)

in paragraph (5), by striking Director and inserting Board;

(G)

in paragraph (6)(D)—

(i)

in the heading, by striking director and inserting Board; and

(ii)

by striking Director each place it appears and inserting Board;

(H)

in paragraph (9)(A)(ii), by inserting , but only if the conditions for engaging in expanded financial activities set forth in section 4(l) of the Bank Holding Company Act of 1956 have been met after 1956; and

(I)

in paragraph (9)(E), by striking Director each place it appears and inserting Board.

(4)

In subsection (e)—

(A)

in paragraph (1)(A)—

(i)

in clause (i), by striking Director and inserting Board;

(ii)

in clause (ii), by striking Director and inserting Board;

(iii)

in clause (iii), by striking Director each place it appears and inserting Board; and

(iv)

in clause (iv), by striking Director each place it appears and inserting Board;

(B)

in paragraph (1)(B), by striking Director each place it appears and inserting Board;

(C)

in paragraph (2), by striking Director each place it appears and inserting Board;

(D)

in paragraph (3), by striking Director and inserting Board;

(E)

in paragraph (4)(A), by striking Director and inserting Board; and

(F)

in paragraph (5), by striking Director each place it appears and inserting Board.

(5)

In subsection (f), by striking Director each place it appears and inserting Board.

(6)

In subsection (g), by striking Director each place it appears and inserting Board.

(7)

In subsection (h)—

(A)

in paragraph (2), by striking Director and inserting Board; and

(B)

in paragraph (3), by striking Director and inserting Board.

(8)

In subsection (i)—

(A)

in paragraph (1)(A), by striking Director and inserting Board;

(B)

in paragraph (2)(B), by striking Director and inserting Board;

(C)

in paragraph (2)(F), by striking Director and inserting Board;

(D)

in paragraph (3)(B), by striking Director and inserting Board;

(E)

in paragraph (3)(F), by striking Director and inserting Board;

(F)

in paragraph (4), by striking Director and inserting Board; and

(G)

in paragraph (5), by striking Director and inserting Board.

(9)

In subsection (j), by striking Director each place it appears and inserting Board.

(10)

In subsection (l)—

(A)

in paragraph (1), by striking Director and inserting Board, in consultation with the Comptroller of the Currency,; and

(B)

in paragraph (2), by striking Director and inserting Board, in consultation with the Comptroller of the Currency,.

(11)

In subsection (m)—

(A)

in paragraph (2), by striking Director and inserting Comptroller;

(B)

in paragraph (2), by striking Director may grant and inserting Comptroller of the Currency may grant;

(C)

in paragraph (2), by striking the Director deems and inserting the Comptroller deems;

(D)

in paragraph (2)(A), by striking Director and inserting Comptroller;

(E)

in paragraph (2)(B), by striking Director and inserting Comptroller;

(F)

in paragraph (2)(B)(iii), by striking Director and inserting Comptroller;

(G)

by striking subparagraph (A) of paragraph (3) and inserting the following new subparagraph:

(A)

In general

A savings association that fails to become or remain a qualified thrift lender shall—

(i)

immediately be subject to the restrictions in subparagraph (B); and

(ii)

become one or more banks (other than a savings bank) within one year after the date on which the savings association should have become or ceases to be a qualified thrift lender, except as provided in subparagraph (C)(i).

;

(H)

by striking subclause (III) of paragraph (3)(B)(i) and inserting the following new subclause:

(III)

Dividends

The savings association shall be prohibited from paying dividends except for such dividends—

(aa)

as would be permissible for a national bank;

(bb)

that are necessary to meet obligations of a company that controls such savings association; and

(cc)

that are specifically approved by the Comptroller and the Board of Governors after prior written request of at least 30 days to the Comptroller and the Board of Governors.

;

(I)

by striking clause (ii) of paragraph (3)(B);

(J)

by striking subparagraphs (C) and (D) of paragraph (3) and inserting the following new subparagraphs:

(C)

Regulatory authority

A savings association that fails to become or remain a qualified thrift lender shall be deemed to have violated section 5 of the Home Owners’ Loan Act and subject to actions authorized by section 5(d) of the Home Owners’ Loan Act.

(D)

Requalifications

(i)

A savings association that should have become or ceases to be a qualified thrift lender shall not be subject to subparagraph (A)(ii) if the savings association becomes a qualified thrift lender by meeting the qualified thrift lender requirement in paragraph (1) on a monthly average basis in 9 out of the preceding 12 months and remains a qualified thrift lender.

(ii)

If the savings association referred to in clause (i) (or any savings association that acquired all or substantially all of its assets from that savings association) at any time thereafter ceases to be a qualified thrift lender it shall immediately be subject to subparagraph (A)(ii) as if the 1-year time period provided for in subparagraph (A)(ii) already has expired, and as if the exception in clause (i) was not applicable or available to such savings association.

;

(K)

in paragraph (4)(D) by striking Director and inserting Comptroller;

(L)

in paragraph (4)(E) by striking Director and inserting Comptroller; and

(M)

in paragraph (7)(B) by striking Director and inserting Comptroller.

(12)

In subsection (o)—

(A)

in paragraph (3) in the heading by striking Director and inserting Board;

(B)

in paragraph (3)(A) by striking Director and inserting Board;

(C)

in paragraph (3)(B) by striking Director and inserting Board;

(D)

in paragraph (3)(C) by striking Director and inserting Board;

(E)

in paragraph (3)(D) by striking Director and inserting Comptroller;

(F)

in paragraph (5)(E), by striking activities described in subsection (c)(2) or (c)(9)(A)(ii) and inserting activities otherwise permissible for the company pursuant to, and in accordance with, section 4 of the Bank Holding Company Act of 1956;

(G)

in paragraph (7) by striking chartered by the Director and inserting chartered by the Comptroller; and

(H)

in paragraph (7) by striking regulations as the Director may and inserting regulations as the Board may.

(13)

In subsections (p), (q), (r), and (s), by striking Director each place it appears and inserting Board.

1219.

Practices of certain mutual thrift holding companies preserved

(a)

Treatment of dividends by certain mutual holding companies

Section 3(g) of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(g)) is amended by adding at the end the following new paragraphs:

(3)

Declaration of dividends

Every subsidiary savings association of a mutual holding company shall give the Board not less than 30 days advance notice of the proposed declaration by its directors of any dividend on its guaranty, permanent, or other nonwithdrawable stock. Such notice period shall commence to run from the date of receipt of such notice by the Board. Any such dividend declared within such period, or without the giving of such notice to the Board, shall be invalid and shall confer no rights or benefits upon the holder of any such stock.

(4)

Waiver of dividends

Any mutual thrift holding company organized under section 10(b) of the Home Owners’ Loan Act shall be permitted to waive such company’s right to receive any dividend declared by a subsidiary, if—

(A)

no insider of the mutual holding company, associate of an insider, or tax-qualified or non-tax-qualified employee stock benefit plan of the mutual holding company holds any share of the stock in the class of stock to which the waiver would apply; or

(B)

the mutual holding company provides the Board with written notice of its intent to waive its right to receive dividends 30 days prior to the proposed date of payment of the dividend and the Board does not object.

(5)

Standards for waiver of dividend

The Board shall not object to a notice of intent to waive dividends under paragraph (4) if—

(A)

the waiver would not be detrimental to the safe and sound operation of the savings association; and

(B)

the board of directors of the mutual holding company expressly determines that a waiver of the dividend by the mutual holding company is consistent with the directors’ fiduciary duties to the mutual members of such company.

(6)

Resolution included in waiver notice

A dividend waiver notice shall include a copy of the resolution of the board of directors of the mutual holding company, in form and substance satisfactory to the Board, together with any supporting materials relied upon by the board of directors, concluding that the proposed dividend waiver is consistent with the board of director’s fiduciary duties to the mutual members of the mutual holding company.

(7)

Valuation

(A)

In general

The Board shall consider waived dividends in determining an appropriate exchange ratio in the event of a full conversion to stock form.

(B)

Exception

In the case of a savings association which has reorganized into a mutual thrift holding company under section 10(b) of the Home Owners’ Loan Act and has issued minority stock either from its mid-tier stock holding company or its subsidiary stock savings association prior to December 1, 2009, the Board shall not consider waived dividends in determining an appropriate exchange ratio in the event of a full conversion to stock form.

.

1220.

Implementation plan and reports

(a)

Plan submission

Within 90 days of the enactment of the Financial Stability Improvement Act of 2009, the Secretary and the Corporation, in consultation with the Office of the Comptroller of the Currency and the Office of Thrift Supervision, shall jointly submit a plan to the Congress and the Inspectors General of the Department of the Treasury and of the Corporation detailing the steps the Secretary, the Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision will take to implement the provisions of sections 1201 through 1216, and the provisions of the amendments made by such sections.

(b)

Inspectors General review of the plan

Within 60 days of the date on which the Congress receives the plan required under subsection (a), the Inspectors General of the Department of the Treasury and of the Corporation shall jointly provide a written report to the Secretary and the Corporation and shall submit a copy to the Congress detailing whether the plan conforms with the intent of the provisions of sections 1201 through 1216, and the provisions of the amendments made by such sections, including—

(1)

whether the plan sufficiently takes into consideration the orderly transfer of personnel;

(2)

whether the plan describes procedures and safeguards to ensure that the Office of Thrift Supervision employees are not unfairly disadvantaged relative to employees of the Office of the Comptroller of the Currency and the Corporation;

(3)

whether the plan sufficiently takes into consideration the orderly transfer of authority and responsibilities;

(4)

whether the plan sufficiently takes into consideration the effective transfer of funds;

(5)

whether the plan sufficiently takes in consideration the orderly transfer of property; and

(6)

any additional recommendations for an orderly and effective process.

(c)

Implementation reports

Not later than 6 months after the date on which the Congress receives the report required under subsection (b), and every 6 months thereafter until all aspects of the plan have been implemented, the Inspectors General of the Department of the Treasury and the Corporation shall jointly provide a written report on the status of the implementation of the plan to the Secretary and the Corporation and shall submit a copy to the Congress.

1221.

Composition of board of directors of the Federal Deposit Insurance Corporation

Section 2 of the Federal Deposit Insurance Act (12 U.S.C. 1812) is amended—

(1)

in subsection (a)(1)—

(A)

in subparagraph (B), by striking Director of the Office of Thrift Supervision and inserting Chairman of the Board of Governors of the Federal Reserve System, or such other member of the Board of Governors as the Chairman of the Board of Governors shall designate;

(2)

by amending subsection (d)(2) to read as follows:

(2)

Acting officials may serve

In the event of a vacancy in the office of the Comptroller of the Currency and pending the appointment of a successor, or during the absence or disability of the Comptroller of the Currency, the acting Comptroller of the Currency shall be a member of the Board of Directors in the place of the Comptroller of the Currency.

; and

(3)

in subsection (f)(2), by striking or of the Office of Thrift Supervision.

1222.

Amendments to section 3

Section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) is amended—

(1)

in subsection (b)(1)(C) (relating to the definition of the term savings association), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency;

(2)

in subsection (l)(5) (relating to the definition of the term deposit), in the introductory text, by striking Director of the Office of Thrift Supervision,; and

(3)

in subsection (z) (relating to the definition of the term Federal banking agency), by striking the Director of the Office of Thrift Supervision,.

1223.

Amendments to section 7

Section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. 1817) is amended—

(1)

in paragraph (2)(A)—

(A)

in the first sentence, by striking the Director of the Office of Thrift Supervision;

(B)

in the second sentence, by striking the Director of the Office of Thrift Supervision,;

(2)

in paragraph (3), in the first sentence, by striking , the Comptroller of the Currency, the Chairman of the Board of Governors of the Federal Reserve System, and the Director of the Office of Thrift Supervision and inserting Comptroller of the Currency and the Chairman of the Board of Governors of the Federal Reserve System; and

(3)

in paragraph (7), by striking , the Director of the Office of Thrift Supervision,.

1224.

Amendments to section 8

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

(1)

in subsection (a)(8)(B)(ii), in the last sentence—

(A)

by striking Director of the Office of Thrift Supervision each place it appears and inserting Comptroller of the Currency; and

(B)

by inserting the Office of Thrift Supervision, as a successor to after as a successor to;

(2)

in subsection (o), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency; and

(3)

in subsection (w)(3)(A), by striking Office of Thrift Supervision and inserting Office of the Comptroller of the Currency.

1225.

Amendments to section 11

Section 11 of the Federal Deposit Insurance Act (12 U.S.C. 1821) is amended—

(1)

in subsection (c)(6)—

(A)

in the heading, by striking director of the office of thrift supervision and inserting Comptroller of the Currency;

(B)

in subparagraph (A), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency;

(C)

in subparagraph (B), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency;

(2)

in subsection (d)—

(A)

in paragraph (17)(A)—

(i)

by striking , or the Director of the Office of Thrift Supervision; and

(ii)

by striking appropriate; and

(B)

in paragraph (18)(B), by striking or the Director of the Office of Thrift Supervision; and

(3)

in subsection (n)—

(A)

in paragraph (1)(A), by striking the Director of the Office of Thrift Supervision, with respect to 1 or more insured;

(B)

in paragraph (2)(A), by striking the Director of the Office of Thrift Supervision;

(C)

in paragraph (4)(D), by striking and the Director of the Office of Thrift Supervision, as appropriate,;

(D)

in paragraph (4)(G), by striking and the Director of the Office of Thrift Supervision, as appropriate,; and

(E)

in paragraph (12)(B), by striking or the Director of the Office of Thrift Supervision, as appropriate,.

1226.

Amendments to section 13

Section 13(k)(1)(A)(iv) of the Federal Deposit Insurance Act (12 U.S.C. 1823(k)(1)(A)(iv)) is amended by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency.

1227.

Amendments to section 18

Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended—

(1)

in subsection (c)(2)—

(A)

in subparagraph (A), by striking bank; and inserting bank or a savings association; and;

(B)

in subparagraph (B), by inserting and at the end after the semicolon;

(C)

in subparagraph (C), by striking bank (except a savings bank supervised by the Director of the Office of Thrift Supervision); and and inserting bank or State savings association.; and

(D)

by striking subparagraph (D);

(2)

in subsection (i)(2)—

(A)

by striking subparagraph (B) and inserting the following new subparagraph:

(B)

the Corporation, if the resulting institution is to be a State nonmember insured bank or insured State savings association.

; and

(B)

by striking subparagraph (C); and

(3)

in subsection (m)—

(A)

in paragraph (1)—

(i)

in subparagraph (A), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency; and

(ii)

in subparagraph (B), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency;

(B)

in paragraph (2)—

(i)

in subparagraph (A), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency; and

(ii)

in subparagraph (B)—

(I)

by striking Director of the Office of Thrift Supervision each place it appears and inserting Comptroller of the Currency; and

(II)

by striking Director may deem appropriate and inserting Comptroller may deem appropriate; and

(C)

in paragraph (3)—

(i)

in subparagraph (A), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency; and

(ii)

in subparagraph (B), by striking Office of Thrift Supervision and inserting Comptroller of the Currency.

1228.

Amendments to section 28

Section 28 of the Federal Deposit Insurance Act (12 U.S.C. 1831e) is amended—

(1)

in subsection (e)—

(A)

in paragraph (2)—

(i)

in subparagraph (A)(ii), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency;

(ii)

in subparagraph (C), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency; and

(iii)

in subparagraph (F), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency; and

(B)

in paragraph (3)—

(i)

in subparagraph (A), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency; and

(ii)

in subparagraph (B), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency; and

(2)

in subsection (h)(2), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency.

1229.

Amendments to the Alternative Mortgage Transaction Parity Act of 1982

(a)

Amendments to section 802

Section 802(a)(3) of the Alternative Mortgage Transaction Parity Act of 1982 (12 U.S.C. 3801(a)(3)) is amended—

(1)

by striking Comptroller of the Currency, and inserting Comptroller of the Currency and; and

(2)

by striking , and the Director of the Office of Thrift Supervision.

(b)

Amendments to section 804

Section 804(a) of the Alternative Mortgage Transaction Parity Act of 1982 (12 U.S.C. 3803(a)) is amended—

(1)

by amending paragraph (1) to read as follows:

(1)

with respect to banks, savings associations, mutual savings banks, and savings banks, only to transactions made in accordance with regulations governing alternative mortgage transactions as prescribed by the Comptroller of the Currency to the extent that such regulations are authorized by rulemaking authority granted to the Comptroller of the Currency under laws other than this section; and

;

(2)

in paragraph (2), by striking ; and and inserting a period; and

(3)

by striking paragraph (3).

1230.

Amendments to the Bank Holding Company Act of 1956

Section 4(f)(12)(A) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(f)(12)(A)) is amended striking the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, or and inserting the Federal Deposit Insurance Corporation or.

1231.

Amendments to the Bank Protection Act of 1968

Section 2 of the Bank Protection Act of 1968 (12 U.S.C. 1881) is amended—

(1)

in paragraph (1), by striking national banks, and inserting national banks and federal savings associations,;

(2)

in paragraph (2), by inserting and at the end;

(3)

in paragraph (3), by striking , and and inserting a period; and

(4)

by striking paragraph (4).

1232.

Amendments to the Bank Service Company Act

Section 1(b) of the Bank Service Company Act (12 U.S.C. 1861(b)) is amended—

(1)

in paragraph (4), by striking insured bank, and inserting insured bank or;

(2)

by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency; and

(3)

by striking , the Federal Savings and Loan Insurance Corporation,.

1233.

Amendments to the Community Reinvestment Act of 1977

Section 803 of the Community Reinvestment Act of 1977 (12 U.S.C. 2902) is amended—

(1)

in paragraph (1)—

(A)

in subparagraph (A), by striking national banks and inserting national banks or savings associations (the deposits of which are insured by the Federal Deposit Insurance Corporation); and

(B)

in subparagraph (B), by striking and bank holding companies; and inserting , bank holding companies and savings and loan holding companies;; and

(2)

by striking the first paragraph (2) (relating to section 8 of the Federal Deposit Insurance Act).

1234.

Amendments to the Depository Institution Management Interlocks Act

(a)

Amendment to section 207

Section 207 of the Depository Institution Management Interlocks Act (12 U.S.C. 3206) is amended—

(1)

in paragraph (1), by striking national banks, and inserting national banks and Federal savings associations (the deposits of which are insured by the Federal Deposit Insurance Corporation),;

(2)

in paragraph (2), by striking and bank holding companies, and inserting , bank holding companies, and savings and loan holding companies,;

(3)

by striking paragraph (4); and

(4)

by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively.

(b)

Amendment to section 209

Section 209 of the Depository Institution Management Interlocks Act (12 U.S.C. 3207) is amended—

(1)

in paragraph (1), by striking national banks, and inserting national banks and Federal savings associations (the deposits of which are insured by the Federal Deposit Insurance Corporation),;

(2)

in paragraph (2), by striking and bank holding companies, and inserting , bank holding companies, and savings and loan holding companies,;

(3)

at the end of paragraph (3), by inserting and after the comma;

(4)

by striking paragraph (4); and

(5)

by redesignating paragraph (5) as paragraph (4).

(c)

Amendment to section 210

Subsection 210(a) of the Depository Institution Management Interlocks Act (12 U.S.C. 3208(a)) is amended—

(1)

by striking his and inserting the; and

(2)

by inserting of the Attorney General after enforcement functions.

1235.

Amendments to the Emergency Homeowners’ Relief Act

Section 110 of the Emergency Homeowners’ Relief Act (12 U.S.C. 2709) is amended—

(1)

by striking the Federal Home Loan Bank Board and inserting Federal Housing Finance Agency; and

(2)

by striking the Federal Savings and Loan Insurance Corporation,.

1236.

Amendments to the Equal Credit Opportunity Act

Section 704(a) of the Equal Credit Opportunity Act (15 U.S.C. 1691c(a)) is amended—

(1)

in paragraph (1)(A), by striking and Federal branches and Federal agencies of foreign banks, and inserting Federal branches and Federal agencies of foreign banks, or a savings association the deposits of which are insured by the Federal Deposit Insurance Corporation,;

(2)

by striking paragraph (2); and

(3)

by redesignating paragraphs (3) through (9) as paragraphs (2) through (8).

1237.

Amendments to the Federal Credit Union Act

(a)

Amendments to section 206

Section 206(g)(7) of the Federal Credit Union Act (12 U.S.C. 1786(g)(7)) is amended—

(1)

in subparagraph (A)—

(A)

in clause (v), by inserting and after the semicolon;

(B)

in clause (vi)—

(i)

by striking Federal Housing Finance Board and inserting Federal Housing Finance Agency; and

(ii)

by striking ; and and inserting a period; and

(C)

by striking clause (vii); and

(2)

in subparagraph (D)—

(A)

in clause (iii), by inserting and after the semicolon;

(B)

in clause (iv), by striking ; and and inserting a period; and

(C)

by striking clause (v).

1238.

Amendments to the Federal Financial Institutions Examination Council Act of 1978

(a)

Amendment to section 1002

Section 1002 of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3301) is amended by striking Federal Home Loan Bank Board and inserting Federal Housing Finance Agency.

(b)

Amendment to section 1003

Section 1003(1) of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3302(1)) is amended by striking the Office of Thrift Supervision,.

(c)

Amendments to section 1004

Section 1004(a) of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3303(a)) is amended—

(1)

by striking paragraph (4); and

(2)

by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively.

1239.

Amendments to the Federal Home Loan Bank Act

(a)

Amendments to section 18

Section 18(c) of the Federal Home Loan Bank Act (12 U.S.C. 1438(c)) is amended—

(1)

by striking Director of the Office of Thrift Supervision each place it appears and inserting Comptroller of the Currency;

(2)

in paragraph (1)(B), by striking and the agencies under its administration or supervision; and

(3)

in paragraph (5), by striking and such agencies.

(b)

Repeal of section 21A

Section 21A of the Federal Home Loan Bank Act (12 U.S.C. 1441a) is hereby repealed.

1240.

Amendments to the Federal Reserve Act

Section 19(b) of the Federal Reserve Act (12 U.S.C. 461) is amended—

(1)

in paragraph (1)(F), by striking the Director of the Office of Thrift Supervision and inserting the Comptroller of the Currency; and

(2)

in paragraph (4)(B), by striking the Director of the Office of Thrift Supervision and inserting the Comptroller of the Currency.

1241.

Amendments to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989

(a)

Amendments to section 302

Section 302(1) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 is amended by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency.

(b)

Amendment to section 305

Section 305(b)(1) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 is amended by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency.

(c)

Amendment to section 308

Section 308(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note) is amended by striking Director of the Office of Supervision and inserting Comptroller of the Currency.

(d)

Amendments to section 402

Section 402 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1437 note) is amended—

(1)

in subsection (a), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency;

(2)

in subsection (b), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency; and

(3)

in subsection (e)—

(A)

in paragraph (1), by striking Office of Thrift Supervision and inserting Office of the Comptroller of the Currency;

(B)

in paragraph (2), by striking Director of the Office of Thrift Supervision each place it appears and inserting Comptroller of the Currency;

(C)

in paragraph (3), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency; and

(D)

in paragraph (4), by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency.

(e)

Amendment to section 1103

Section 1103(a)(2) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3332(a)(2)) is amended by striking and the Resolution Trust Corporation.

(f)

Amendments to section 1205

Subsection 1205(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1818 note) is amended—

(1)

in paragraph (1)—

(A)

in subparagraph (B), by striking Director of the Office of Thrift Supervision, or the Director’s designee and inserting Comptroller of the Currency, or the Comptroller’s designee;

(B)

by striking subparagraph (D); and

(C)

by redesignating subparagraphs (E) and (F) as subparagraphs (D) and (E), respectively;

(2)

in paragraph (2), by striking paragraph (1)(F) and inserting paragraph (1)(E);

(3)

in paragraph (3), by striking paragraph (1)(F) and inserting paragraph (1)(E); and

(4)

in paragraph (5), by striking through (E) and inserting through (D).

(g)

Amendments to section 1206

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

(1)

by striking the Oversight Board of the Resolution Trust Corporation and inserting and; and

(2)

by striking , and the Office of Thrift Supervision,.

(h)

Amendments to section 1216

Section 1216 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833e) is amended—

(1)

in subsection (a)—

(A)

by striking paragraphs (2), (5), and (6);

(B)

by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively; and

(C)

in paragraph (2) (as redesignated), by adding and at the end;

(2)

in subsection (c)—

(A)

by striking the Director of the Office of Thrift Supervision, and inserting and; and

(B)

by striking , the Oversight Board of the Resolution Trust Corporation, and the Resolution Trust Corporation; and

(3)

in subsection (d)—

(A)

by striking paragraphs (3), (5), and (6); and

(B)

by redesignating paragraphs (4), (7), and (8) as paragraphs (3), (4), and (5), respectively.

1242.

Amendments to the Housing Act of 1948

Section 502(c) of the Housing Act of 1948 (12 U.S.C. 1701c(c)) is amended in the introductory text by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency .

1243.

Amendments to the Housing and Community Development Act of 1992 and the Federal Housing Enterprises Financial Safety and Soundness Act of 1992

(a)

Amendments to section 543 of the Housing and Community Development Act of 1992

Section 543 of the Housing and Community Development Act of 1992 (12 U.S.C. 1707 note) is amended—

(1)

in subsection (c)(1)—

(A)

by striking subparagraphs (D) through (F); and

(B)

by redesignating subparagraphs (G) and (H) as subparagraphs (D) and (E), respectively; and

(2)

in subsection (f)—

(A)

in paragraph (2)—

(i)

by striking the Office of Thrift Supervision,; and

(ii)

in subparagraph (D), by striking the Office of Thrift Supervision,; and

(B)

in paragraph (3)—

(i)

by striking the Office of Thrift Supervision,; and

(ii)

in subparagraph (D), by striking Office of Thrift Supervision, and inserting Comptroller of the Currency,.

(b)

Amendment to section 1315 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992

Section 1315(b) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4515(b)) is amended by striking the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision. and inserting and the Federal Deposit Insurance Corporation..

(c)

Amendment to section 1317 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992

Section 1317(c) of the of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517(c)) is amended by striking the Federal Deposit Insurance Corporation, or the Director of the Office of Thrift Supervision and inserting or the Federal Deposit Insurance Corporation.

1244.

Amendment to the Housing and Urban-Rural Recovery Act of 1983

Section 469 of the Housing and Urban-Rural Recovery Act of 1983 (12 U.S.C. 1701p–1) is amended in the first sentence by striking Federal Home Loan Bank Board and inserting Federal Housing Finance Agency.

1245.

Amendments to the National Housing Act

Section 202(f) of the National Housing Act is amended—

(1)

by amending paragraph (5) to read as follows:

(5)

if the mortgagee is a national bank, a subsidiary or affiliate of such a bank, a Federal savings association or a subsidiary or affiliate of a savings association, the Comptroller of the Currency;

;

(2)

in paragraph (6), by adding and at the end;

(3)

in paragraph (7)—

(A)

by inserting or State savings association after State bank; and

(B)

by striking ; and and inserting a period; and

(4)

by striking paragraph (8).

1246.

Amendments to the Right to Financial Privacy Act of 1978

Section 1101(7) of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3401(7)) is amended by striking subparagraph (B).

1247.

Amendments to the Balanced Budget and Emergency Deficit Control Act of 1985

(a)

Amendments to section 255

Section 255(g)(1)(A) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(A)) is amended by striking Office of Thrift Supervision (20–4108–0–3–373);.

(b)

Amendments to section 256

Section 256(h)(4) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 906(h)(4)) is amended—

(1)

by striking subparagraphs (C) and (G); and

(2)

by redesignating subparagraphs (D), (E), (F), and (H) as subparagraphs (C) through (G), respectively.

1248.

Amendments to the Crime Control Act of 1990

(a)

Amendments to section 2539

Section 2539(c)(2) of the Crime Control Act of 1990 (Public Law 101–647) is amended by striking subparagraph (F) and redesignating subparagraphs (G) and (H) as subparagraphs (F) through (G), respectively.

(b)

Amendment to section 2554

Section 2554(b)(2) of the Crime Control Act of 1990 (Public Law 101–647) is amended by striking Director of the Office of Thrift Supervision and inserting Comptroller of the Currency.

1249.

Amendment to the Flood Disaster Protection Act of 1973

Section 3(a)(5) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4003(a)(5)) is amended by striking the Office of Thrift Supervision,.

1250.

Amendment to the Investment Company Act of 1940

Section 6(a)(3) of the Investment Company Act of 1940 (15 U.S.C. 80a–6(a)(3)) is amended by striking Federal Savings and Loan Insurance Corporation and inserting Comptroller of the Currency.

1251.

Amendment to the Neighborhood Reinvestment Corporation Act

Section 606(c)(3) of the Neighborhood Reinvestment Corporation Act is amended by striking Federal Home Loan Bank Board and inserting Federal Housing Finance Agency.

1252.

Amendments to the Securities Exchange Act of 1934

(a)

Amendments to section 3

Section 3(a)(34) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(34)) is amended—

(1)

in subparagraph (A)—

(A)

in clause (i), by striking bank; and inserting bank, or a savings association (as defined in section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813(b))), the deposits of which are insured by the Federal Deposit Insurance Corporation, a subsidiary or a department or division of any such savings association, or a savings and loan holding;;

(B)

in clause (iii), by adding and at the end;

(C)

by striking clause (iv); and

(D)

by redesignating clause (v) as clause (iv);

(2)

in subparagraph (B)—

(A)

in clause (i), by striking bank; and inserting bank, or a savings association (as defined in section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813 (b))), the deposits of which are insured by the Federal Deposit Insurance Corporation, a subsidiary or a department or division of any such savings association, or a savings and loan holding;;

(B)

in clause (iii), by adding and at the end;

(C)

by striking clause (iv); and

(D)

by redesignating clause (v) as clause (iv);

(3)

in subparagraph (C)—

(A)

in clause (i), by striking bank; and inserting bank, or a savings association (as defined in section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813 (b))), the deposits of which are insured by the Federal Deposit Insurance Corporation, a subsidiary or a department or division of any such savings association, or a savings and loan holding;;

(B)

in clause (iii), by adding and at the end;

(C)

by striking clause (iv); and

(D)

by redesignating clause (v) as clause (iv); and

(4)

in subparagraph (F)—

(A)

in clause (i), by striking bank; and inserting or a savings association (as defined in section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813 (b))), the deposits of which are insured by the Federal Deposit Insurance Corporation;;

(B)

by striking clause (ii); and

(C)

redesignating clauses (iii), (iv), and (v) as clauses (ii), (iii) and (iv), respectively.

(b)

Amendments to section 15C

Section 15C of the Securities Exchange Act of 1934 (15 U.S.C. 78o–5) is amended in subsection (g)(1) by striking the Director of the Office of Thrift Supervision, the Federal Savings and Loan Insurance Corporation,.

1253.

Amendments to title 18, United States Code

(a)

Amendment to section 212

Section 212(c)(2) of title 18, United States Code, is amended—

(1)

by striking subparagraph (C); and

(2)

by redesignating subparagraphs (D) through (H) as subparagraphs (C) through (G), respectively.

(b)

Amendment to section 657

Section 657 of title 18, United States Code, is amended by striking Office of Thrift Supervision, the Resolution Trust Corporation,.

(c)

Amendment to section 981

Section 981(a)(1)(D) of title 18, United States Code, is amended—

(1)

by striking the Resolution Trust Corporation,; and

(2)

by striking or the Office of Thrift Supervision.

(d)

Amendment to section 982

Section 982(a)(3) of title 18, United States Code, is amended—

(1)

by striking the Resolution Trust Corporation,; and

(2)

by striking or the Office of Thrift Supervision.

(e)

Amendment to section 1006

Section 1006 of title 18, United States Code, is amended—

(1)

by striking Office of Thrift Supervision,; and

(2)

by striking the Resolution Trust Corporation,.

(f)

Amendment to section 1014

Section 1014 of title 18, United States Code, is amended—

(1)

by striking the Office of Thrift Supervision,; and

(2)

by striking the Resolution Trust Corporation,.

(g)

Amendment to section 1032

Section 1032(1) of title 18, United States Code, is amended—

(1)

by striking the Resolution Trust Corporation,; and

(2)

by striking or the Director of the Office of Thrift Supervision.

1254.

Amendments to title 31, United States Code

(a)

Amendment to section 309

Section 309 of title 31, United States Code, is amended to read as follows:

309.

Division of Thrift Supervision

The Division of Thrift Supervision established under section 3(a) of the Home Owners’ Loan Act shall be a division in the Office of the Comptroller of the Currency.

.

(b)

Amendments to section 321

Section 321 of title 31, United States Code, is amended—

(1)

in subsection (c)—

(A)

in paragraph (1), by adding and at the end;

(B)

in paragraph (2), by striking ; and and inserting a period; and

(C)

by striking paragraph (3); and

(2)

by striking subsection (e).

(c)

Amendments to section 714

Section 714 of title 31, United States Code, is amended—

(1)

in subsection (a), by striking the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. and inserting and the Office of the Comptroller of the Currency.;

(2)

in subsection (b), by striking all after has consented in writing. and inserting the following: Audits of the Federal Reserve Board and Federal reserve banks shall not include unreleased transcripts or minutes of meetings of the Board of Governors or of the Federal Open Market Committee. To the extent that an audit deals with individual market actions, records related to such actions shall only be released by the Comptroller General after 180 days have elapsed following the effective date of such actions.;

(3)

in subsection (c)(1), in the first sentence, by striking subsection, and inserting subsection or in the audits or audit reports referring or relating to the Federal Reserve Board or Reserve Banks,; and

(4)

by adding at the end the following:

(f)

Audit and report of the Federal Reserve System

(1)

In general

An audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed within 12 months of the enactment of the Financial Stability Improvement Act of 2009.

(2)

Report

(A)

Required

A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to—

(i)

the Speaker of the House of Representatives;

(ii)

the majority and minority leaders of the House of Representatives;

(iii)

the majority and minority leaders of the Senate;

(iv)

the Chairman and Ranking Member of the committee and each subcommittee of jurisdiction in the House of Representatives and the Senate; and

(v)

any other Member of Congress who requests it.

(B)

Contents

The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report.

(3)

Construction

Nothing in this subsection shall be construed—

(A)

as interference in or dictation of monetary policy to the Federal Reserve System by the Congress or the Government Accountability Office; or

(B)

to limit the ability of the Government Accountability Office to perform additional audits of the Board of Governors of the Federal Reserve System or of the Federal reserve banks.

.

1255.

Requirement for Countercyclical Capital Requirements

Section 908(a) of the International Lending Supervision Act of 1983 (12 U.S.C. 3907(a)) is amended by adding at the end the following new paragraph:

(3)

Each appropriate Federal banking agency shall, in establishing capital requirements under this Act or other provisions of Federal law for banking institutions, seek to make such requirements countercyclical so that the amount of capital required to be maintained by a banking institution increases in times of economic expansion and decreases in times of economic contraction, consistent with the safety and soundness of the institution.

.

1256.

Transfer of authority to the Board with respect to savings and loan holding companies

(a)

Transfer of functions

Notwithstanding any other provision of this subtitle, all functions of the Director of the Office of Thrift Supervision with respect to savings and loan holding companies that are a fraternal beneficiary society, as defined in section 501(c)(8) of the Internal Revenue Code of 1986, or a company that is, together with all of its affiliates on a consolidated basis, predominantly engaged in the business of insurance are transferred to the Board.

(b)

Board’s authority

Notwithstanding any other provision of this subtitle, the Board shall succeed to all powers, authorities, rights, and duties with respect to savings and loan holding companies that are a fraternal beneficiary society, as defined in section 501(c)(8) of the Internal Revenue Code of 1986, or a company that is, together with all of its affiliates on a consolidated basis, predominantly engaged in the business of insurance that were vested in the Director of the Office of Thrift Supervision under Federal law, including the Home Owners’ Loan Act, on the day before the transfer date.

(c)

Savings and loan holding company defined

The term savings and loan holding company shall have the meaning given such term under section 10 of the Home Owners’ Loan Act.

1257.

Effective date

Except as otherwise provided in this subtitle, the amendments made by sections 1221 through section 1253 and 1256 and subsections (a), (b), and (c)(1) of section 1254 shall take effect on the transfer date.

D

Further improvements to the regulation of bank holding companies and depository institutions

1301.

Treatment of industrial loan companies, savings associations, and certain other companies under the bank holding company act

(a)

Definitions

Section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841) is amended—

(1)

by striking subsection (a)(1) and inserting the following:

(a)

Bank holding company

(1)

In general

Except as provided in paragraph (5), the term bank holding company means—

(A)

any company, other than a company described in section 4(p), which has control over any bank or over any company that is or becomes a bank holding company by virtue of this Act; and

(B)

any section 6 holding company established by a company described in section 6(a)(1)(C).

.

(2)

in subsection (a)(5), by adding at the end the following new subparagraph:

(G)

No company is a bank holding company by virtue of its ownership or control of a section 6 holding company or any subsidiary of a section 6 holding company, so long as the requirements of sections 4(p) and 6 of this Act are met, as applicable, by the section 6 holding company;

;

(3)

in subsection (c)(1)(A), by striking insured bank and inserting insured depository institution, and by striking section 3(h) of the Federal Deposit Insurance Act and inserting section 3(c)(2) of the Federal Deposit Insurance Act;

(4)

in subsection (c)(2)—

(A)

in subparagraph (B), by inserting before the period the following: that is controlled by a company that is a fraternal beneficiary society, as defined in section 501(c)(8) of the Internal Revenue Code of 1986, or a company that is, together with all of its affiliates on a consolidated basis, predominantly engaged in the business of insurance; and

(B)

in subparagraph (F)(i), by inserting before the semicolon the following: , including issuing credit cards and other credit devices (including virtual or intangible devices) that function as credit cards;

(C)

in subparagraph (F)(v), by inserting before the semicolon the following: , other than loans that otherwise meet the requirements of this subparagraph and are made to businesses that meet the criteria for a small business concern to be eligible for business loans under regulations established by the Small Business Administration under part 121 of title 13, Code of Federal Regulations; and

(D)

by striking subparagraph (H) and inserting the following:

(H)

An industrial loan company, industrial bank, or other similar institution which—

(i)

is an institution organized under the laws of a State which, on March 5, 1987, had in effect or had under consideration in such State's legislature a statute which required or would require such institution to obtain insurance under the Federal Deposit Insurance Act;

(ii)

either—

(I)

does not accept demand deposits that the depositor may withdraw by check or similar means for payment to third parties;

(II)

has total assets of less than $100,000,000; or

(III)

the control of which is not acquired by any company after August 10, 1987;

(iii)

predominantly provides financial products and services to current and former members of the military and their families; and

(iv)

is controlled by a savings and loan holding company, as defined in section 10(a) of the Home Owners’ Loan Act.

This subparagraph shall cease to apply to any institution which permits any overdraft (including any intraday overdraft), or which incurs any such overdraft in such institution's account at a Federal Reserve bank, on behalf of an affiliate, if such overdraft is not the result of an inadvertent computer or accounting error that is beyond the control of both the institution and the affiliate, or that is otherwise permissible for a bank controlled by a company described in section 1843(f)(1) of this title.

; and

(5)

by adding at the end the following new subsection:

(r)

Section 6 holding companies

The term section 6 holding company means a company that is required to be established as an intermediate holding company under section 6 of this Act.

.

(b)

Nonbanking activities exceptions

Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843) is amended—

(1)

in subsection (f)(1)(B) by striking for purposes of this Act and inserting for purposes of section 4(a); and

(2)

in subsection (f)(2)—

(A)

in subparagraph (B)(ii), by striking ; or and inserting a semicolon;

(B)

in subparagraph (C), by striking the period and inserting ; or; and

(C)

by adding at the end the following new subparagraph:

(D)

such company fails to—

(i)

establish and register a section 6 holding company pursuant to section 6 of this Act within 180 days after the adoption of rules required by this section; and

(ii)

conduct all such activities which are permissible for a financial holding company, as determined under section 4(k), through such section 6 holding company, other than—

(I)

internal financial activities conducted for such company or any affiliate, including, but not limited to internal treasury, investment, and employee benefit functions, provided that with respect to any internal financial activity engaged in for the company or an affiliate and a nonaffiliate during the year prior to date of enactment, the company (or an affiliate not a subsidiary of the section 6 company) may continue to engage in that activity so long as the at least two-thirds of the assets or two-thirds of the revenues generated from the activity are from or attributable to the company or an affiliate, subject to review by the Board to determine whether engaging in such activity presents undue risk to the section 6 company or undue systemic risk; and

(II)

financial activities involving the provision of credit for the purchase or lease of products or services from an affiliate or for the purchase or lease of products produced by an affiliate of such section 6 holding company that is not a subsidiary of such section six holding company, in accordance with regulations prescribed by or orders issued by the Board, pursuant to section 6 of this Act.

; and

(3)

by inserting at the end the following new subsections:

(p)

Certain companies not subject to this act

(1)

In general

Except as provided in paragraphs (6) and (7), any company which—

(A)

was—

(i)

on the date of enactment of the Financial Stability Improvement Act of 2009, a unitary savings and loan holding company that continues to control not fewer than one savings association that it controlled on May 4, 1999, or that it acquired pursuant to an application pending before the Office of Thrift Supervision on or before that date, and that became a bank for purposes of the Bank Holding Company Act as a result of the enactment of section 1301(a)(3) of the Financial Stability Improvement Act of 2009; or

(ii)

on November 23, 2009—

(I)

controlled an institution which became a bank as a result of the enactment of section 1301(a)(4)(B) of the Financial Stability Improvement Act of 2009;

(II)

had an application pending, or approved but not executed, before the Federal Deposit Insurance Corporation, that, if approved, would permit the applicant to control an industrial loan company, industrial bank, or other similar institution—

(aa)

that is a federally insured, State-chartered depository institution;

(bb)

that is organized under the laws of a State that on March 5, 1987, had in effect, or had under consideration in the legislature of such State, a statute that required such institution to obtain insurance under the Federal Deposit Insurance Act; and

(cc)

that—

(AA)

does not accept demand deposits that the depositor may withdraw by check or similar means for payment to third parties; or

(BB)

maintains total assets of less than $100,000,000; or

(III)

controlled an institution it has continuously controlled since March 5, 1987, which became a bank as a result of the enactment of the Competitive Equality Banking Act of 1987, pursuant to subsection (f);

(B)

was not on June 30, 2009—

(i)

a bank holding company; or

(ii)

subject to the Bank Holding Company Act of 1956 by reason of section 8(a) of the International Banking Act of 1978 (12 U.S.C. 3106(a)); and

(C)

on June 30, 2009, directly or indirectly controlled shares or engaged in activities that did not, on the day before the date of enactment of the Financial Stability Act of 2009, comply with the activity or investment restrictions on financial holding companies in section 4 in accordance with regulations prescribed by the Board,

shall not be treated as a bank holding company for purposes of this Act solely by virtue of such company’s control of such institution and control of a section 6 holding company established pursuant to section 6.
(2)

Loss of exemption

A company described in paragraph (1) shall no longer qualify for the exemption provided under that paragraph if—

(A)

such company fails to—

(i)

establish and register a section 6 holding company pursuant to section 6 of this Act within 180 days after adoption of rules required by this section, unless the Board grants an extension of such period for compliance which shall not exceed 180 additional days; and

(ii)

maintain a section 6 holding company in compliance with all the requirements for a section 6 holding company under section 6 of this Act.

(B)

such company directly or indirectly (including through the section 6 holding company it must form pursuant to this subsection and section 6 of this Act) acquires control of an additional bank or insured depository institution after June 30, 2009, provided that such company directly or indirectly (including through the section 6 holding company) may acquire—

(i)

shares held as a bona fide fiduciary (whether with or without the sole discretion to vote such shares);

(ii)

shares held by any person as a bona fide fiduciary solely for the benefit of employees of either the company described in paragraph (1) or any subsidiary of that company and the beneficiaries of those employees;

(iii)

shares held temporarily pursuant to an underwriting commitment in the normal course of an underwriting business;

(iv)

shares held in an account solely for trading purposes;

(v)

shares over which no control is held other than control of voting rights acquired in the normal course of a proxy solicitation;

(vi)

loans or other accounts receivable acquired from an insured depository institution in the normal course of business;

(vii)

shares or assets acquired in securing or collecting a debt previously contracted in good faith, during the 2-year period beginning on the date of such acquisition or for such additional time (not exceeding 3 years) as the Board may permit if the Board determines that such an extension will not be detrimental to the public interest;

(viii)

shares or assets acquired directly or indirectly by a depository institution controlled by such company in a transaction involving an insured depository institution for which the Federal Deposit Insurance Corporation has been appointed as receiver or which has been found to be in danger of default (as defined in section 3 of the Federal Deposit Insurance Act) by the appropriate Federal or State authority;

(ix)

shares or assets of another industrial loan company meeting the requirements of this Act if such company continuously controlled an industrial loan company since the date of enactment of the Financial Stability Improvement Act of 2009; and

(x)

shares or assets of a savings association acquired directly or indirectly by the savings association controlled by such company if such company continuously controlled a savings association since the date of enactment of the Financial Stability Improvement Act of 2009;

(C)
(i)

the section 6 holding company required to be established by such company, or any subsidiary bank of such company undergoes a change in control after the date of enactment of the Financial Stability Improvement Act of 2009, other than—

(I)

the merger or whole acquisition of such parent company in a bona fide merger or acquisition (as shall be determined by the Board, which is authorized to find that a transaction is not a bona fide merger or acquisition and thus results in the loss of exemption), with a company that is predominantly engaged in activities not permissible for a financial holding company pursuant to section 4(k);

(II)

a change of control of an industrial bank, its section 6 holding company, or any entity that directly or indirectly controls the industrial bank, in a transaction other than a merger described in subclause (I), by an acquiring company that is predominately engaged in activities not permissible for a financial holding company pursuant to subsection (k), if—

(aa)

the transaction is approved by the appropriate Federal banking agency and the Board; and

(bb)

the industrial bank does not thereafter establish a domestic branch as defined in section 3(o) of the Federal Deposit Insurance Act (12 U.S.C. 1813(o));

(III)

an inadvertent acquisition of control, as determined by the Board, if such inadvertent acquisition of control is reversed or rectified within 180 days of its discovery; or

(IV)

the acquisition of additional shares by a company that owned or controlled 7.5 percent or more of any class of such parent company’s outstanding voting stock on or before June 30, 2009, and continuously owned or controlled at least such 7.5 percent since June 30, 2009.

(ii)

Nothing in this subparagraph shall be construed as preventing the Board from requiring compliance with this subsection, section 6 or the requirements of the Change in Bank Control Act, as applicable to a company that is permitted to acquire control without loss of the exemption in this subsection 4(p)(2); or

(D)

any subsidiary bank of such company engages in any activity after the date of enactment of the Financial Stability Improvement Act of 2009 which would have caused such institution to be a bank (as defined in section 2(c) of this Act, as in effect before such date) if such activities had been engaged in before such date.

(3)

Divestiture in case of loss of exemption

If any company described in paragraph (1) fails to qualify for the exemption provided under paragraph (1) by operation of paragraph (2), such exemption shall cease to apply to such company and such company shall divest control of each bank it controls before the end of the 180-day period beginning on the date on which the company receives notice from the Board that the company has failed to continue to qualify for such exemption, unless, before the end of such 180-day period, the company has—

(A)

either—

(i)

corrected the condition or ceased the activity that caused the company to fail to continue to qualify for the exemption; or

(ii)

submitted a plan to the Board for approval to cease the activity or correct the condition in a timely manner (which shall not exceed 1 year); and

(B)

implemented procedures that are reasonably adapted to avoid the reoccurrence of such condition or activity.

(4)

Subsection ceases to apply under certain circumstances

This subsection shall cease to apply to any company described in paragraph (1) if such company—

(A)

registers as a bank holding company under section 2(a) of this Act;

(B)

immediately upon such registration, complies with all of the requirements of this chapter, and regulations prescribed by the Board pursuant to this chapter, including the nonbanking restrictions of this section; and

(C)

does not, at the time of such registration, control banks in more than one State, the acquisition of which would be prohibited by section 3(d) of this Act if an application for such acquisition by such company were filed under section 3(a) of this Act.

(5)

Information requirement

Each company described in paragraph (1) shall, within 60 days after the date of enactment of the Financial Stability Improvement Act of 2009, provide the Board with the name and address of such company, the name and address of each bank such company controls, and a description of each such bank’s activities.

(6)

Examinations and reports

The Board may, from time to time, examine a company described in paragraph (1) or a bank controlled by such a company, and may require reports under oath from a company described in paragraph (1), and appropriate officers or directors of such company, in each case solely for purposes of assuring compliance with the provisions of this subsection and enforcing such compliance.

(7)

Limited enforcement

(A)

In general

In addition to any other power of the Board, the Board may enforce compliance with the provisions of this subsection which are applicable to any company described in paragraph (1), and any bank controlled by such company, under section 8 of the Federal Deposit Insurance Act, and such company or bank shall be subject to such section (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 described in paragraph (1) or any bank controlled by such a 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 or any other Federal agency under any other provision of law.

(8)

Unitary savings and loan holding company defined

For purposes of this subsection, the term unitary savings and loan holding company means a company that was a savings and loan holding company on May 4, 1999 (as then defined), or that became a savings and loan holding company pursuant to an application pending before the Office of Thrift Supervision on or before that date, and—

(A)

that controls—

(i)

only 1 savings association; or

(ii)

more than 1 savings association, if all, or all but 1, of the savings association subsidiaries of such company were initially acquired by the company pursuant to a supervisory transaction under section 1823(c), 1823(i), or 1823(k) of this title, or section 408(m) of the National Housing Act (12 U.S.C. 1730a(m));

(B)

all of the savings association subsidiaries of such company are qualified thrift lenders (as determined under section 10 of the Home Owners’ Loan Act); and

(C)

that continues to control not fewer than 1 savings association that it controlled on May 4, 1999, or that it acquired pursuant to an application pending before the Office of Thrift Supervision on or before that date.

(q)

Preservation of certain savings and loan holding company authorities

Notwithstanding subsection (a), a company that was a savings and loan holding company on June 30, 2009, that became a bank holding company by operation of section 1301 of the Financial Stability Improvement Act of 2009 may continue to engage in the following activities in which such company was continuously engaged on June 30, 2009, through the day of enactment of the Financial Stability Improvement Act of 2009:

(1)

Furnishing or performing management services for a savings association subsidiary of such company.

(2)

Conducting an insurance agency or escrow business.

(3)

Holding, managing, or liquidating assets owned or acquired from a savings association subsidiary of such company.

(4)

Holding or managing properties used or occupied by a savings association subsidiary of such company.

(5)

Acting as trustee under deed of trust.

(6)

Any other activity in which multiple savings and loan holding companies were authorized (by regulation) to directly engage on March 5, 1987.

.

(c)

Section 6 holding companies

The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended by inserting after section 5 the following new section:

6.

Special-purpose holding companies

(a)

Establishment, purpose and requirements of special purpose holding companies

(1)

Requirement

A special purpose holding company (hereafter in this section referred to as a section 6 holding company) shall be established and maintained by a company—

(A)

described in section 4(f)(1) as required by section 4(f)(2)(D) of this Act;

(B)

described in section 4(p)(1) as required by section 4(p)(2)(A) of this Act; or

(C)

that—

(i)

is subject to stricter prudential standards under section 1103 of the Financial Stability Improvement Act of 2009;

(ii)

is not—

(I)

a bank holding company; or

(II)

subject to the Bank Holding Company Act by reason of section 8(a) of the International Banking Act of 1978 (12 U.S.C. 3106(a)); and

(iii)

directly or indirectly controlled shares or engaged in activities that did not, on the date the company is first subject to stricter prudential standards pursuant to subtitle B of the Financial Stability Improvement Act of 2009, comply with the activity or investment restrictions on financial holding companies in section 4 in accordance with regulations prescribed by the Board.

(2)

Purpose

(A)

The purpose of this section is to provide for consolidated supervision of certain financial companies by the Board.

(B)

A company that is required to form a section a section 6 holding company shall conduct all such activities which are permissible for a financial holding company, as determined under section 4(k), through such section 6 holding company, other than—

(i)

internal financial activities conducted for such company or any affiliate, including, but not limited to internal treasury, investment, and employee benefit functions, provided that with respect to any internal financial activity engaged in for the company or an affiliate and a nonaffiliate during the year prior to date of enactment, the company (or an affiliate not a subsidiary of the section 6 company) may continue to engage in that activity so long as the at least 2/3 of the assets or 2/3 of the revenues generated from the activity are from or attributable to the company or an affiliate, subject to review by the Board to determine whether engaging in such activity presents undue risk to the section 6 company or undue systemic risk; and

(ii)

financial activities involving the provision of credit for the purchase or lease of products or services from an affiliate or for the purchase or lease of products produced by an affiliate of such section 6 holding company that is not a subsidiary of such section 6 holding company, in accordance with regulations prescribed by or orders issued by the Board, pursuant to section 6 of this Act.

(C)

A section 6 holding company shall be prohibited from conducting any nonbanking activities or investing in any nonbank companies other than those permissible for a financial holding company under sections 3 and 4, unless the Board specifically determines otherwise in accordance with paragraph (6), and provided that, for purposes of this paragraph, a company designated as a section 6 holding company and described under paragraph (4) (or any permitted successor) is not prohibited from continuing to engage in any impermissible activity in which it was engaged continuously during the 6 months prior to the date of enactment, from owning any shares or types of assets related to such activity, or continuing to own such other shares or assets that it owned on the date of enactment.

(3)

Registration

(A)

A section 6 holding company required to be established by a company described in paragraph (1)(A) shall be established, and such company shall register with the Board as a bank holding company, pursuant to the requirements in section 4(f).

(B)

A section 6 holding company required to be established by a company described in paragraph (1)(B) shall be established, and such company shall register with the Board as a bank holding company, pursuant to the requirements in section 4(p).

(C)

A section 6 holding company required to be established by a company described in paragraph (1)(C) shall be—

(i)

established, and such company shall register with the Board within 90 days after such company or such company’s parent holding company has been notified by the Board that such company is subject to stricter prudential standards under section 1103 of the Financial Stability Improvement Act of 2009, unless the Board grants an extension of such period for compliance which shall not exceed 180 additional days;

(ii)

subject to the provisions of this Act and other Federal law as provided in section 1103(g) of the Financial Stability Improvement Act of 2009; and

(iii)

subject to the authority of the Board to enforce compliance with the provisions of this section under section 8 of the Federal Deposit Insurance Act in the same manner and to the same extent as if such company were a bank holding company.

(4)

Rule of construction

For purposes of this section, designation of an already established intermediate holding company that will serve as the section 6 holding company shall satisfy the requirement to establish a section 6 holding company, provided that such existing intermediate holding company complies with all other provisions applicable to a section 6 holding company.

(5)

Limitations on authority of commercial parent

A company that is not a bank holding company or treated as a bank holding company pursuant to section 8(a) of the International Bank Act of 1978 that has been notified that it is a financial holding company subject to stricter standards, pursuant to section 1103 of the Financial Stability Improvement Act of 2009, shall—

(A)

not be deemed to be, or treated as, a bank holding company, solely because of its ownership or control of a section 6 holding company; and

(B)

not be subject to this Act, except for such provisions as are explicitly made applicable in this section.

(6)

Board authority

(A)

Rules and exemptions

In addition to any other authority of the Board, the Board shall prescribe rules and regulations or issue orders providing for the establishment and registration of section 6 holding companies and shall provide exemptions from the requirements of this Act (including an order in response to a request from an affected company), including, but not limited to, exemptions—

(i)

with respect to the requirement to conduct such activities which are financial in nature, as determined under section 4(k), other than financial activities conducted for such company or any affiliate, including any financial activity engaged in for both the company or an affiliate and a nonaffiliate as permitted under section 4(f)(2)(D) or section 6(a)(2)(B) and financial activities involving the provision of credit for the purchase or lease of products or services from an affiliate or for the purchase or lease of products produced by an affiliate of such section 6 holding company that is not a subsidiary of such section 6 holding company, through such section 6 holding company, if the Board makes a finding that such exemption—

(I)
(aa)

would facilitate the extension of credit to individuals, households, and businesses; or

(bb)

would allow for greater efficiency, improved customer service, or other public benefits in the conduct of financial activities by affected companies;

(II)

would not threaten the safety and soundness of the section 6 holding company, or of any insured depository institution or other subsidiary of the section 6 holding company;

(III)

would not increase systemic risk or threaten the stability of the overall financial system;

(IV)

would not, as applied to the activities that are the subject of the rule, order or request, result in substantially lessening competition, or to tend to create a monopoly, or which in any other manner would be in restraint of trade, unless the Board finds that the anticompetitive effects are outweighed in the public interest by the probable effect of the exemption in meeting the convenience and needs of the community to be served; and

(V)

would meet the financial and managerial standards for financial holding companies described in subparagraphs (A) and (B) of section 4(j)(4); and

(ii)

from the affiliate transaction requirements of subsection (b), including but not limited to exemptions that would facilitate extensions of credit to unaffiliated persons for the personal, household, or business purposes of such unaffiliated persons, unless the Board makes a finding that such exemption—

(I)

is not consistent with the purposes of section 23A and section 23B of the Federal Reserve Act;

(II)

would threaten the safety and soundness of the section 6 holding company, or any insured depository institution or other subsidiary of the section 6 holding company;

(III)

would increase systemic risk or threaten the stability of the overall financial system;

(IV)

would not, as applied to the activities that are the subject of the rule, order or request result in substantially lessening competition, or to tend to create a monopoly, or which in any other manner would be in restraint of trade, unless the Board finds that the anticompetitive effects are outweighed in the public interest by the probable effect of the exemption in meeting the convenience and needs of the community to be served; or

(V)

would permit an unfair, deceptive, abusive, or unsafe-and-unsound act or practice.

(B)

Parent company reports

The Board may, from time to time, require reports under oath from a company that controls a section 6 holding company, and appropriate officers or directors of such company, solely for purposes of ensuring compliance with the provisions of this section (including assessing the company’s ability to serve as a source of financial strength pursuant to subsection (g)) and enforcing such compliance.

(C)

Limited parent company enforcement

(i)

In general

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

(ii)

Application of other act

Any violation of this subsection by any company that controls a section 6 holding company or any bank controlled by such a company, may also be treated as a violation of the Federal Deposit Insurance Act for purposes of clause (i).

(iii)

No effect on other authority

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

(b)

Restrictions on affiliate transactions

(1)

Section 23A and 23B applicability

(A)

In general

Transactions between a section 6 holding company (or any nonbank subsidiary thereof) and any affiliate not controlled by the section 6 holding company shall be subject to the restrictions and limitations contained in section 23A and section 23B of the Federal Reserve Act as if the section 6 holding company were a member bank, provided, that a transaction that otherwise would be a covered transaction shall not be a covered transaction if the transaction is in connection with the bona fide acquisition or lease by an unaffiliated person of assets, goods or services but shall be subject to review under section 23A(f)(1) of such Act.

(B)

Covered transactions

A depository institution controlled by a section 6 holding company may not engage in a covered transaction (as defined in section 23A(b)(7) of the Federal Reserve Act) with any affiliate that is not the section 6 holding company or a subsidiary of the section 6 holding company; provided that, for purposes of the prohibition, a transaction that otherwise would be a covered transaction shall not be a covered transaction if the transaction is in connection with the bona fide acquisition or lease by an unaffiliated person of assets, goods or services, but shall be subject to review under section 23A(f)(1) of the Federal Reserve Act.

(2)

Rule of construction

No provision of this subsection shall be construed as exempting any subsidiary insured depository institution of a section 6 holding company from compliance with section 23A or 23B of the Federal Reserve Act with respect to each affiliate of such institution (as defined in section 23A or 23B of the Federal Reserve Act), including any affiliate that is the section 6 holding company or subsidiary of the section 6 holding company.

(c)

Tying provisions

A company that directly or indirectly controls a section 6 holding company shall be—

(1)

treated as a bank holding company for purposes of section 106 of the Bank Holding Company Act Amendments of 1970 and section 22(h) of the Federal Reserve Act and any regulation prescribed under any such section; and

(2)

subject to the restrictions of section 106 of the Bank Holding Company Act Amendments of 1970, in connection with any transaction involving the products or services of such company or affiliate and those of a bank affiliate, as if such company or affiliate were a bank and such bank were a subsidiary of a bank holding company.

(d)

Financial holding company requirements

A section 6 holding company shall be subject to—

(1)

the conditions for engaging in expanded financial activities in section 4(l); and

(2)

the provisions applicable to financial holding companies that fail to meet certain requirements in section 4(m).

(e)

Independence of section 6 holding company

(1)

No less than 25 percent of the members of the board of directors of a section 6 holding company, and each subsidiary of a section 6 holding company, shall be independent of the parent company of the section 6 holding company and any subsidiary of such parent company. For purposes of this subsection, a director shall be independent of the parent company if such person is not currently serving, and has not within the previous 2-year period served, as a director, officer, or employee of any affiliate of the section 6 holding company that is not a subsidiary of the section 6 holding company.

(2)

No executive officer of a section 6 holding company or any subsidiary of a section 6 holding company may serve as a director, officer, or employee of an affiliate of the section 6 holding company that is not a subsidiary of the section 6 holding company.

(3)

The Board shall issue regulations that require effective legal and operational separation of the functions of a section 6 holding company from its affiliates that are not subsidiaries of such section 6 holding company, provided, however that such rules shall not require operational separation of internal functions including, but not limited to, human resources management, employee benefit plans, and information technology.

(f)

Source of strength

A company that directly or indirectly controls a section 6 holding company shall serve as a source of financial strength to its subsidiary section 6 holding company.

.

1302.

Registration of certain companies as bank holding companies

Section 5 of the Bank Holding Company Act of 1956 (12 U.S.C. 1844) is amended by inserting at the end the following new subsection:

(h)

Conversion to bank holding company by operation of law

(1)

Conversion by operation of law

A company that, on the day before the date of enactment of the Financial Stability Improvement Act of 2009, was not a bank holding company but which, by reason of section 1301 of the Financial Stability Improvement Act of 2009 becomes a bank holding company, other than a section 6 holding company, by operation of law, shall register as a bank holding company with the Board in accordance with section 5(a) within 90 days of the date of enactment of that Act.

(2)

Compliance with bank holding company act

With respect to any company described in paragraph (1), the Board may grant temporary exemptions or provide other appropriate temporary relief to permit such company to implement measures necessary to comply with the requirements under the Bank Holding Company Act.

.

1303.

Reports and examinations of bank holding companies; regulation of functionally regulated subsidiaries

(a)

Reports of bank holding companies

Sections 5(c)(1)(A) and (B) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)(A) and (B)) are amended to read as follows:

(A)

In general

The Board, from time to time, may require a bank holding company and any subsidiary of such company to submit reports under oath that the Board determines are necessary or appropriate for the Board to carry out the purposes of this chapter, prevent evasions thereof, and monitor compliance by the company or subsidiary with the applicable provisions of law.

(B)

Use of existing reports

(i)

In general

The Board shall, to the fullest extent possible, use—

(I)

reports that a bank holding company or any subsidiary of such company has been required to provide to other Federal or State regulatory agencies;

(II)

information that is otherwise required to be reported publicly; and

(III)

externally audited financial statements.

(ii)

Availability

A bank holding company or a subsidiary of such company shall promptly provide to the Board, at the request of the Board, a report referred to in clause (i)(I).

.

(b)

Functionally regulated subsidiary

Section 5(c)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)) is amended by inserting at the end the following new subparagraph:

(C)

Definition

For purposes of this subsection and section 6, the term functionally regulated subsidiary means any subsidiary (other than a depository institution) of a bank holding company that is—

(i)

a broker or dealer registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934, for which the Securities and Exchange Commission is the Federal regulatory agency;

(ii)

an investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940, for which the Securities and Exchange Commission is the Federal regulatory agency;

(iii)

an investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940, for which the Securities and Exchange Commission is the Federal regulatory agency, with respect to the investment advisory activities of such investment adviser and activities incidental to such investment advisory activities; and

(iv)

a futures commission merchant, commodity trading advisor, and commodity pool operator registered with the Commodity Futures Trading Commission under the Commodity Exchange Act, for which the Commodity Futures Trading Commission is the Federal regulatory agency, with respect to the commodities activities of such entity and activities incidental to such commodities activities.

.

(c)

Examinations of bank holding companies

Sections 5(c)(2)(A) and (B) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(2)(A) and (B)) are amended to read as follows:

(A)

In general

The Board may make examinations of a bank holding company and any subsidiary of such a company to carry out the purposes of this chapter, prevent evasions thereof, and monitor compliance by the company or subsidiary with applicable provisions of law.

(B)

Functionally regulated and depository institution subsidiaries

The Board shall, to the fullest extent possible, use reports of examination of functionally regulated subsidiaries and subsidiary depository institutions made by other Federal or State regulatory authorities.

.

(d)

Regulation of financial holding companies

Section 5(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)) is amended by striking subparagraphs (C), (D), and (E).

(e)

Authority to regulate functionally regulated subsidiaries of bank holding companies

The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended by striking section 10A (12 U.S.C. 1848a).

1304.

Requirements for financial holding companies to remain well capitalized and well managed

Section 4(l)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(l)(1)) is amended—

(1)

in subparagraph (B), by striking and;

(2)

by redesignating subparagraph (C) as subparagraph (D);

(3)

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

(C)

the bank holding company is well capitalized and well managed; and

; and

(4)

in subparagraph (D) (as so redesignated) by amending clause (ii) to read as follows:

(ii)

a certification that the company meets the requirements of subparagraphs (A) through (C).

.

1305.

Standards for interstate acquisitions

(a)

Bank holding company act of 1956 amendment

Section 3(d)(1)(A) of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is amended—

(1)

by striking adequately capitalized and inserting well capitalized; and

(2)

by striking adequately managed and inserting well managed.

(b)

Federal deposit insurance act amendment

Section 44(b)(4)(B) of the Federal Deposit Insurance Act (12 U.S.C. 1831u(b)(4)(B)) is amended to read as follows:

(B)

the responsible agency determines that the resulting bank will be well capitalized and well managed upon the consummation of the transaction.

.

1306.

Enhancing existing restrictions on bank transactions with affiliates

(a)

Section 23A of the Federal Reserve Act (12 U.S.C. 371c) is amended—

(1)

in subsection (b)(1), by striking subparagraph (D) and inserting the following new subparagraph:

(D)

any investment fund with respect to which a member bank or affiliate thereof is an investment adviser; and

;

(2)

in subsection (b)(7)(A), by inserting (including a purchase of assets subject to an agreement to repurchase) after affiliate;

(3)

in subsection (b)(7)(C), by striking , including assets subject to an agreement to repurchase,;

(4)

in subsection (b)(7)(D)—

(A)

by inserting or other debt obligations after acceptance of securities; and

(B)

by striking or after the semicolon;

(5)

in subsection (b)(7), by inserting at the end the following new subparagraphs:

(F)

any securities borrowing and lending transactions with an affiliate to the extent that the transactions create credit exposure of the member bank to the affiliate; or

(G)

current and potential future credit exposure to the affiliate on derivative transactions with the affiliate;

;

(6)

in subsection (c)(1), by striking at the time of the transaction, and inserting at all times;

(7)

in subsection (c)—

(A)

by striking paragraph (2);

(B)

by redesignating paragraphs (3), (4), and (5) as paragraphs (2), (3), and (4), respectively;

(8)

in subsection (c)(3) (as so redesignated by paragraph (7)), by inserting or other debt obligations after securities;

(9)

in subsection (f)(2), by inserting at the end the following: The Board may not, by regulation or order, grant an exemption under this section unless the Board obtains the concurrence of the Chairman of the Federal Deposit Insurance Corporation.; and

(10)

in subsection (f)—

(A)

by redesignating paragraph (3) as paragraph (4); and

(B)

and inserting after paragraph (2) the following new paragraph:

(3)

Concurrence of the comptroller of the currency

With respect to a transaction or relationship involving a national bank or Federal savings association, the Board may not grant an exemption under this section unless the Board obtains the concurrence of the Comptroller of the Currency (in addition to obtaining the concurrence of the Chairman of the Federal Deposit Insurance Corporation under paragraph (2)).

.

(b)

Technical and conforming amendment

Section 23B(e) of the Federal Reserve Act (12 U.S.C. 371–1(e)), is amended by inserting at the end the following new paragraph:

(3)

The Board may not grant an exemption or exclusion under this section unless the Board obtains the concurrence of the Chairman of the Federal Deposit Insurance Corporation.

.

1307.

Eliminating exceptions for transactions with financial subsidiaries

Section 23A(e) of the Federal Reserve Act (12 U.S.C. 371c(e)) is amended—

(1)

by striking paragraph (3); and

(2)

by redesignating paragraph (4) as paragraph (3).

1308.

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

Section 5200 of the Revised Statutes of the United States (12 U.S.C. 84) is amended—

(1)

in subsection (b)(1), by striking shall include all direct or indirect and all that follows through commitment; and inserting:

shall include—

(A)

all direct or indirect advances of funds to a person made on the basis of any obligation of that person to repay the funds or repayable from specific property pledged by or on behalf of the person;

(B)

to the extent specified by the Comptroller of the Currency, such term shall also include any liability of a national banking association to advance funds to or on behalf of a person pursuant to a contractual commitment; and

(C)

credit exposure to a person arising from a derivative transaction, repurchase agreement, reverse repurchase agreement, securities lending transaction, or securities borrowing transaction between the national banking association and the person;

;

(2)

in subsection (b)(2) by striking the period at the end and inserting ; and;

(3)

in subsection (b), by inserting after paragraph (2) the following new paragraph:

(3)

the term derivative transaction means any transaction that is a contract, agreement, swap, warrant, note, or option that is based, in whole or in part, on the value of, any interest in, or any quantitative measure or the occurrence of any event relating to, one or more commodities, securities, currencies, interest or other rates, indices, or other assets.

; and

(4)

in subsection (d), by inserting after paragraph (2) the following new paragraph:

(3)

The Comptroller of the Currency shall prescribe rules to administer and carry out the purposes of this section with respect to credit exposures arising from any derivative transaction, repurchase agreement, reverse repurchase agreement, securities lending transaction, or securities borrowing transaction. Rules required to be prescribed under this paragraph (3) shall take effect, in final form, not later than 180 days after the date of enactment of the Financial Stability Improvement Act of 2009.

.

1309.

Restriction on conversions of troubled banks and thrifts

(a)

Conversion of a national banking association to a state bank

The National Bank Consolidation and Merger Act (12 U.S.C. 215 et seq.) is amended by redesignating section 7 as section 8 and by inserting after section 6 the following:

7.

Prohibition on certain conversions

A national bank may not convert to a State bank during any period of time in which it is subject to a cease and desist order, memorandum of understanding, or other enforcement action entered into with or issued by the Comptroller of the Currency.

.

(b)

Conversion of a state bank to a national bank

Section 5154 of the Revised Statutes (12 U.S.C. 35) is amended by adding at the end the following new sentence: The Comptroller of the Currency shall not approve the conversion of a State bank to a national bank during any period of time in which the State bank is subject to a cease and desist order, memorandum of understanding, or other enforcement action entered into or issued by a State bank supervisor, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System or a Federal Reserve Bank..

(c)

Conversion between a Federal savings association and a State savings association

Section 5(i) of the Home Owners’ Loan Act (12 U.S.C. 1464(i)) is amended by adding at the end the following new paragraph:

(6)

Prohibition on certain conversions

A Federal savings association may not convert to a State savings association, and a State savings association may not convert to a Federal savings association, during any period of time in which such savings association is subject to a cease and desist order, memorandum of understanding, or other enforcement action entered into with or issued by the Director of the Office of Thrift Supervision or a State savings association supervisor.

.

1310.

Lending limits to insiders

Section 22(h)(9)(D)(ii) of the Federal Reserve Act (12 U.S.C. 375b(h)(9)(D)(ii)) is amended by inserting , except that a member bank shall be deemed to have extended credit to a person if the member bank has credit exposure to the person arising from a derivative transaction, repurchase agreement, reverse repurchase agreement, securities lending transaction, or securities borrowing transaction between the member bank and the person before the period at the end.

1311.

Limitations on purchases of assets from insiders

(a)

Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by inserting at the end the following new subsection:

(y)

General prohibition

An insured depository institution shall not purchase an asset from, or sell an asset to, one of its executive officers, directors, or principal shareholders or any related interest of such person (as such terms are defined in section 22(h) of Federal Reserve Act) unless the transaction is on market terms and, if the transaction represents more than 10 percent of the institution’s capital stock and surplus, the transaction has been approved in advance by a majority of the institution’s board of directors (with interested directors of the insured depository institution not participating in the approval of the transaction).

.

(b)

FDIC rulemaking authority

The Federal Deposit Insurance Corporation may prescribe rules to implement the requirements of subsection (a) and the amendments made by subsection (a).

(c)

Amendments to the federal reserve act

Section 22 of the Federal Reserve Act (12 U.S.C. 375) is amended by striking subsection (d).

1312.

Rules regarding capital levels of bank holding companies

Section 5(b) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(b)) is amended by inserting , including regulations relating to the capital levels of bank holding companies before the period at the end.

1313.

Enhancements to factors to be considered in certain acquisitions

(a)

Bank acquisitions

Section 3(c) of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(c)) is amended by inserting at the end the following new paragraph:

(7)

Financial stability

(A)

In general

In every case, the Board shall take into consideration the extent to which the proposed acquisition, merger, or consolidation may pose risk to the stability of the United States financial system or the economy of the United States, including the resulting scope, nature, size, scale, concentration, or interconnectedness of activities that are financial in nature.

(B)

Standards for approval

The Board may in its sole discretion disapprove any acquisition, merger, or consolidation of, or by, a financial holding company subject to stricter standards if the Board determines that the resulting concentration of liabilities on a consolidated basis is likely to pose a great threat to financial stability during times of severe economic distress.

.

(b)

Nonbank acquisitions

(1)

Section 4(j)(2)(A) of the Bank Holding Company is amended by—

(A)

striking or before unsound banking practices; and

(B)

inserting before the period at the end the following: , or risk to the stability of the United States financial system or the economy of the United States.

(2)

Section 4(k)(6) of the Bank Holding Company Act of 1956 is amended by striking subparagraph (B) and inserting the following new subparagraph:

(B)

A financial holding company may commence any activity or acquire any company, pursuant to paragraph (4) or any regulation prescribed or order issued under paragraph (5), without prior approval of the Board, except—

(i)

for a transaction in which the total assets to be acquired by the financial holding company exceed $25 billion; and

(ii)

as provided in subsection (j) with regard to the acquisition of a savings association.

.

(3)

Section 4(j) of the Bank Holding Company Act of 1956 is amended by inserting after paragraph (4) the following new paragraph (and redesignating succeeding paragraphs accordingly):

(5)

Financial stability

(A)

In general

In every case, the Board shall take into consideration the extent to which the proposed acquisition, merger, or consolidation may pose risk to the stability of the United States financial system or the economy of the United States, including the resulting scope, nature, size, scale, concentration, or interconnectedness of activities that are financial in nature.

(B)

Standards for approval

The Board may, in the sole discretion of the Board, disapprove any acquisition, merger, or consolidation of, or by, a financial holding company subject to stricter standards if the Board determines that the resulting concentration of liabilities on a consolidated basis is likely to pose a great threat to financial stability during times of severe economic distress.

.

(c)

Bank merger act transactions

Section 18(c)(5) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)) is amended by—

(1)

in paragraph (5), by striking and before the convenience and needs of the community to be served;

(2)

in paragraph (5), by inserting before the period at the end the following: , and the risk to the stability of the United States financial system and the economy of the United States based on, among other things, the scope, nature, size, scale, concentration, or interconnectedness of activities that are financial in nature; and

(3)

in paragraph (7)(B), by inserting subparagraphs (A) and (B) of before paragraph.

1314.

Elimination of elective investment bank holding company framework

Section 17 of the Securities Exchange Act of 1934 (15 U.S.C. 78q) is amended—

(1)

by striking subsection (i); and

(2)

by redesignating subsections (j) and (k) as subsections (i) and (j), respectively.

1315.

Examination fees for large bank holding companies

The Bank Holding Company Act of 1956 is amended by inserting after section 5 the following new section:

5A.

Examination fees

The Board of Governors of the Federal Reserve System or the Federal Reserve Banks shall assess fees on bank holding companies with total consolidated assets of $10 billion or more. Such fees shall be sufficient to defray the cost of the examination of such bank holding companies.

.

1316.

Mutual national banks and Federal mutual bank holding companies authorized

(a)

In general

Chapter one of title LXII of the Revised Statutes of the United States (12 U.S.C. 21 et seq.) is amended by inserting after section 5133 the following new sections:

5133A.

Mutual national banks

(a)

In general

Notwithstanding the section designated the Third of section 5134, in order to provide mutual institutions for the deposit of funds, the extension of credit, and provision of other services, the Comptroller of the Currency may charter mutual national banks either de novo or through a conversion of any insured depository institution or any State mutual bank or credit union, subject to regulations prescribed by the Comptroller of the Currency in accordance with this section. The powers conferred by this section are intended to provide for the creation and maintenance of mutual national banks as bodies corporate existing in perpetuity for the benefit of their depositors and the communities in which they operate.

(b)

Regulations

(1)

Regulations of the Comptroller

The Comptroller of the Currency is authorized to prescribe appropriate regulations for the organization, incorporation, examination, operation, and regulation of mutual national banks. Except to the extent that such existing regulations conflict with sections 5133A and 5133B, mutual national banks shall be subject to the regulations of the Director of the Office of Thrift Supervision governing corporate organization, governance, and conversion of mutual institutions, as in effect on the date of the enactment of the Wall Street Reform and Consumer Protection Act of 2009, including parts 543, 544, 546, 563b, and 563c of chapter V of title 12, Code of Federal Regulations (as in effect on that date), for up to 3 years beginning on the date of the enactment of the Wall Street Reform and Consumer Protection Act of 2009.

(2)

Applicability of capital stock requirements

The Comptroller of the Currency shall prescribe regulations regarding the manner in which requirements of this title with respect to capital stock, and limitations imposed on national banks under this title based on capital stock, shall apply to mutual national banks.

(c)

Conversions

(1)

Conversion of a mutual depository to a mutual national bank

Subject to such regulations as the Comptroller of the Currency may prescribe for the protection of depositors’ rights and for any other purpose the Comptroller of the Currency may consider appropriate, any mutual depository may convert to a mutual national bank by filing with the Comptroller of the Currency a notice of its election to convert on a specified date that is not earlier than 30 days after the date on which the notice is filed, and the mutual depository shall be converted to a mutual national bank charter on the date specified in the notice.

(2)

Conversion to stock national bank

Subject to such regulations as the Comptroller of the Currency may prescribe for the protection of depositors’ rights and for any other purpose the Comptroller of the Currency may consider appropriate, any national bank that is organized in the mutual form under subsection (a) may reorganize as a stock national bank.

(3)

Conversion to State banks

Any national mutual bank may convert to a State bank charter in accordance with regulations prescribed by the Comptroller of the Currency and applicable State law.

(d)

Terminating mutuality

If a mutual national bank elects to terminate mutuality, it must do so by—

(1)

liquidating; or

(2)

converting to a national banking association operating in stock form.

(e)

Status and rights of members

(1)

In general, the status of a member is primarily that of a depositor and secondarily that of a holder of a contingent right to participate in the equity of a mutual national bank upon a liquidation or conversion.

(2)

Each member of a mutual national bank shall have the following rights:

(A)

Such rights as may be agreed upon, by contract, between the member and the mutual national bank.

(B)

The right to vote for members of the board of directors of the mutual national bank.

(C)

The right to attend any meeting of members properly called by the board of directors of a mutual national bank.

(D)

In the event the board of directors, in its sole discretion, determines a conversion of a mutual national bank to a national banking association operating in stock form is in the best interests of the community in which the bank operates and the members approve the conversion through a special proxy, then the members as of a record date set by the board of directors shall have the first right to subscribe for and purchase stock in the converted bank.

(E)

In the event the board of directors, in its sole discretion, determines a liquidation of the mutual national bank is in the best interests of the community in which the bank operates and the members approve the liquidation, or if for any other reason the bank is liquidated by operation of law, then the members as of the date of liquidation shall have the right to have credited to their accounts, on a pro rata basis, any residual assets left after the liquidation of the mutual national bank.

(3)

In the consideration of all questions requiring action by the members of a national mutual bank, the bank may provide in its charter that each member shall be permitted (i) one vote per member, or (ii) to cast one vote for each $100, or fraction thereof, of the withdrawal value of the member’s account, but not more than 1,000 votes per member.

(f)

Proxies

(1)

A member may give, in writing or electronically, a perpetual proxy to a committee of the board of directors of a mutual depository, provided that the member may revoke such a proxy in writing or electronically, with such revocation to take effect after 6 business days.

(2)

Such proxies may be used to vote on any issue requiring approval of the members, including the conversion of a mutual depository into a mutual national bank and the reorganization of a mutual national bank into a Federal mutual bank holding company, except that, without a prior finding by the regulator of the mutual national bank that such action is needed to avoid loss to the Federal Deposit Insurance Corporation’s deposit insurance fund or to protect the stability of the United States financial system, such proxies may not be used to vote in favor of—

(A)

terminating mutuality for a mutual national bank or a Federal mutual bank holding company;

(B)

permitting the modification of a Federal mutual bank holding company; or

(C)

issuing mutual capital certificates (except when used to found a mutual national bank or a Federal mutual bank holding company de novo).

(3)

Proxies given by a member, in writing or electronically, to management of, or to a committee of the board of directors of, a mutual depository shall not be deemed to have been revoked solely because of, and shall continue to exist following, a conversion to a mutual national bank and any concurrent or subsequent reorganization to a Federal mutual bank holding company.

(g)

Definitions

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

(1)

Insured depository institution

The term insured depository institution has the same meaning as in section 3 of the Federal Deposit Insurance Act.

(2)

Mutual national bank

The term mutual national bank means a national banking association that operates in mutual form and is chartered by the Comptroller of the Currency under this section.

(3)

Mutual depository

The term mutual depository means a depository institution that is organized in non-stock form, including a Federal non-stock depository and any form of non-stock depository provided for under State law, the deposits of which are insured by an instrumentality of the Federal Government.

(4)

Mutuality

The term mutuality means the quality of being an insured depository institution organized under a Federal or State law providing for the organization of non-stock depository institutions, or a holding company organized under a Federal or State law providing for the organization of non-stock entities that control one or more depository institutions.

(5)

Member

The term member means each tax-liable depositor in a mutual depository’s savings, demand, or other authorized depository accounts and each tax-liable depositor in such an account in a depository subsidiary of a Federal mutual bank holding company.

(6)

Tax liable depositor

The term tax liable depositor means the single person responsible for paying any Federal taxes due on any interest paid on any deposits held within any savings, demand, or other authorized depository account or accounts with any mutual depository.

(7)

Membership rights

The term membership rights means the rights of each member under this section.

(h)

Conforming references

Unless otherwise provided by the Comptroller of the Currency—

(1)

any reference in any Federal law to a national bank operating in stock form, including a reference to the term national banking association, member bank, national bank, national association, bank, insured bank, insured depository institution, or depository institution, shall be deemed to refer also to a mutual national bank;

(2)

any reference in any Federal law to the term board of directors, director, or directors of a national bank operating in stock form shall be deemed to refer also to the board of a mutual national bank; and

(3)

any terms in Federal law that may apply only to a national bank operating in stock form, including the terms stock, shares, shares of stock, capital stock, common stock, stock certificate, stock certificates, certificates representing shares of stock, stock dividend, transferable stock, each class of stock, cumulate such shares, par value, preferred stock shall not apply to a mutual national bank, unless the Comptroller of the Currency determines that the context requires otherwise.

5133B.

Federal mutual bank holding companies

(a)

Reorganization of mutual national bank as a holding company

(1)

In general

Subject to approval under the Bank Holding Company Act of 1956, a mutual national bank may reorganize so as to become a Federal mutual bank holding company by submitting a reorganization plan to the appropriate bank holding company regulator.

(2)

Plan approval

Upon the approval of the reorganization plan by the appropriate bank holding company regulator and the issuance of the appropriate charters—

(A)

the substantial part of the mutual national bank’s assets and liabilities, including all of the bank’s insured liabilities, shall be transferred to a national banking association, a majority of the shares of voting stock of which is owned, directly or indirectly, by the mutual national bank that is to become a Federal mutual bank holding company; and

(B)

the mutual national bank shall become a Federal mutual bank holding company.

(b)

Directors and certain account holders’ approval of plan required

This subsection does not authorize a reorganization unless—

(1)

a majority of the mutual national bank’s board of directors has approved the plan providing for such reorganization; and

(2)

a majority of members has approved the plan at a meeting held at the call of the directors under the procedures prescribed by the bank’s charter and bylaws.

(c)

Ownership of depository subsidiaries

To avoid terminating mutuality, a Federal mutual bank holding company must own, directly or indirectly, a majority of the shares of voting stock of each of its depository subsidiaries.

(d)

No termination of mutuality

Neither a reorganization of a mutual depository nor a modification of a Federal mutual bank holding company shall cause a termination of mutuality.

(e)

Retention of capital

In connection with a transaction described in subsection (a), a mutual national bank may, subject to the approval of the appropriate bank holding company regulator, retain capital at the holding company level to the extent that the capital retained at the holding company level exceeds the amount of capital required for the national banking association chartered as a part of a transaction described in subsection (a) to meet all relevant capital standards established by the Comptroller of the Currency for national banking associations.

(f)

Terminating mutuality

If a Federal mutual bank holding company elects to terminate mutuality, it must do so by either liquidating or converting to a bank holding company operating in stock form.

(g)

Membership rights

Holders of savings, demand, or other authorized depository accounts in a depository subsidiary of a Federal mutual bank holding company shall have the same membership rights with respect to the Federal mutual bank holding company as those holders would have had if the depository subsidiary of the Federal mutual bank holding company had been a mutual national bank.

(h)

Regulation

A Federal mutual bank holding company shall be—

(1)

chartered by the appropriate bank holding company regulator and shall be subject to such regulations as the appropriate bank holding company regulator shall prescribe; and

(2)

regulated under the Bank Holding Company Act of 1956 on the same terms and subject to the same limitations as any other company that controls a bank.

(i)

Capital improvement

(1)

Pledge of stock of national bank subsidiary

This section shall not prohibit a Federal mutual bank holding company from pledging all or a portion of the stock of the national banking association chartered as part of a transaction described in subsection (a) to raise capital for such national banking association.

(2)

Issuance of nonvoting shares

This section shall not prohibit a national banking association chartered as part of a transaction described in subsection (a) from issuing any nonvoting shares or less than 50 percent of the voting shares of such bank to any person other than the Federal mutual bank holding company.

(j)

Insolvency and liquidation

(1)

In general

Notwithstanding any other provision of law, the appropriate bank holding company regulator may file a petition under chapter 7 of title 11, United States Code, with respect to a Federal mutual bank holding company upon—

(A)

the default of any national bank—

(i)

the stock of which is owned by the Federal mutual bank holding company; and

(ii)

that was chartered in a transaction described in subsection (a); or

(B)

a foreclosure on a pledge by the Federal mutual bank holding company described in subsection (i)(1).

(2)

Distribution of net proceeds

Except as provided in paragraph (3), the net proceeds of any liquidation of any Federal mutual bank holding company under paragraph (1) shall be transferred to persons who hold membership interests in such Federal mutual bank holding company.

(3)

Recovery by FDIC

If the Federal Deposit Insurance Corporation incurs a loss as a result of the default of any insured bank subsidiary of a Federal mutual bank holding company that is liquidated under paragraph (1), the Federal Deposit Insurance Corporation shall succeed to the interests of the depositors of the bank as members in the Federal mutual bank holding company, to the extent of the Federal Deposit Insurance Corporation’s loss.

(k)

Definitions

(1)

Federal mutual bank holding company

The term Federal mutual bank holding company means a holding company that is organized in mutual form and owns, directly or indirectly, a majority of the shares of voting stock of one or more depository subsidiaries of a Federal mutual bank holding company.

(2)

Depository subsidiary of a federal mutual bank holding company

The term depository subsidiary of a Federal mutual bank holding company means a depository institution organized in stock form that is insured by the Federal Deposit Insurance Corporation, the majority of the shares of voting stock of which are owned by the Federal mutual bank holding company or its wholly owned subsidiaries and none of the shares of stock of which are pledged or otherwise subjected to lien except as permitted in subsection (i).

(3)

Reorganization of a mutual depository

The term reorganization of a mutual depository means the conversion of a mutual depository into a depository subsidiary of a Federal mutual bank holding company.

(4)

Modification of a federal mutual bank holding company

The term modification of a Federal mutual bank holding company means either: (A) the sale of shares of common or preferred stock in a depository subsidiary of a Federal mutual bank holding company to any party other than the subsidiary’s parent Federal mutual bank holding company or a wholly owned subsidiary of that parent; or (B) the voluntary grant of a lien on shares of common or preferred stock in a depository subsidiary of a Federal mutual bank holding company.

(5)

Default

With respect to a national bank, the term default means an adjudication or other official determination by any court of competent jurisdiction, the Comptroller of the Currency, or other public authority pursuant to which a conservator, receiver, or other legal custodian is appointed for the national bank.

(l)

Conforming references

Unless otherwise provided by the appropriate bank holding company regulator—

(1)

any reference in any Federal law to a bank holding company operating in stock form shall be deemed to refer also to a Federal mutual bank holding company;

(2)

any reference in any Federal law to the term board of directors, director, or directors of a national bank operating in stock form shall be deemed to refer also to the board of a Federal mutual bank holding company; and

(3)

any terms in Federal law that may apply only to a national bank operating in stock form, including the terms stock, shares, shares of stock, capital stock, common stock, stock certificate, stock certificates, certificates representing shares of stock, stock dividend, transferable stock, each class of stock, cumulate such shares, par value, preferred stock shall not apply to a Federal mutual bank holding company, unless the appropriate bank holding company regulator determines that the context requires otherwise.

.

(b)

Limitation on Federal regulation of State banks

Except as otherwise provided in Federal law, the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation may not adopt or enforce any regulation that contravenes the corporate governance rules prescribed by State law or regulation for State banks unless the Director, Board, or Corporation finds that the Federal regulation is necessary to assure the safety and soundness of the State banks.

(c)

Technical amendment

The table of sections for chapter one of title LXII of the Revised Statutes of the United States (12 U.S.C. 21 et seq.) is amended by inserting after the item relating to section 5133 the following new items:

5133A. Mutual national banks.

5133B. Federal mutual bank holding companies.

.

(d)

Appropriate Federal banking agency for Federal mutual bank holding companies

Section 3(q)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)(2)) is amended by inserting after subparagraph (F) the following new subparagraph:

(G)

supervisory or regulatory proceedings arising from the authority given to the appropriate bank holding company regulator under section 5133B of the Revised Statutes of the United States.

.

(e)

Mutual holding company conversion

(1)

In general

Any mutual holding company, including any form of mutual depository holding company provided for under State law, may convert to a Federal mutual bank holding company by filing with the appropriate bank holding company regulator a notice of its election to convert on a specified date that is not earlier than 30 days after the date on which the notice is filed, and the mutual holding company shall be converted to a Federal mutual holding company charter on the date specified in the notice.

(2)

Definitions

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

(A)

Federal mutual bank holding company

The term Federal mutual bank holding company has the same meaning as in section 5133B of the Revised Statutes of the United States (as added by this section); and

(B)

Mutual holding company

The term mutual holding company has the same meaning as in section 10(o)(10)(A) of the Home Owners Loan Act as in effect on the day before the date of enactment of this Act.

(f)

Effective date

This section shall take effect on the date of enactment of this Act.

1317.

Nationwide Deposit Cap for Interstate Acquisitions

(a)

Amendments to the Bank Holding Company Act of 1956

(1)

Concentration limit for bank holding companies

Section 3(d)(2)(A) of the Bank Holding Company Act (12 U.S.C. 1842(d)(2)(A)) is amended by striking paragraph (1)(A) and inserting subsection (a) of this section.

(2)

Removal of nonbank savings association provision in light of being defined as a bank

Section 4 of the Bank Holding Company Act is amended by striking subsection (i) and insert the following new subsection:

(i)

[Repealed.]

.

(b)

Amendments to the Federal Deposit Insurance Act

(1)

In general

Section 18(e) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)) is amended—

(A)

by redesignating paragraph (12) as paragraph (13); and

(B)

by inserting after paragraph (11), the following new paragraph:

(12)

Nationwide deposit cap

The responsible agency may not approve an application for an interstate merger transaction if the resulting insured depository institution (including all insured depository institutions which are affiliates of the resulting insured depository institution), upon consummation of the transaction, would control more than 10 percent of, the total amount of deposits of insured depository institutions in the United States.

.

(2)

Parallel requirement

Section 44(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1831u(b)(2)(A) is amended to read as follows:

(A)

Nationwide concentration limits

The responsible agency may not approve an application for an interstate merger transaction involving two or more insured depository institutions if the resulting insured depository institution (including all insured depository institutions which are affiliates of such institution), upon consummation of the transaction would control more than 10 percent of the total amount of deposits of insured depository institutions in the United States.

.

(c)

Amendments to the Home Owners’ Loan Act

Section 10(e)(2) of the Home Owners’ Loan Act (12 U.S.C. 467a(e)(2)) is amended—

(1)

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

(2)

by striking the period at the end of subparagraph (D), the following new subparagraph:

(E)

in the case of an application involving an interstate acquisition, if the applicant (including all insured depository institutions which are affiliates of the applicant) controls, or upon consummation of the acquisition for which such application is filed would control, more than 10 percent of the total amount of deposits of insured depository institutions in the United States.

.

1318.

De novo branching into states

(a)

National banks

Section 5155(g)(1)(A) of the Revised Statutes (12 U.S.C. 36(g)(1)(A)) is amended to read as follows:

(A)

the law of the State where the branch is located, or is to be located, would permit establishment of the branch if the national bank were a state bank chartered by such State;

.

(b)

State insured banks

Section 18(d)(4)(A)(i) of the Federal Deposit Insurance Act (12 U.S.C. 1828(d)(4)(A)(i)) is amended to read as follows:

(i)

the law of the State where the branch is located, or is to be located, would permit establishment of the branch if the bank were a State bank chartered by such State;

.

E

Improvements to the Federal Deposit Insurance Fund

1401.

Accounting for actual risk to the Deposit Insurance Fund

(a)

Section 7(b)(1)(C) of the Federal Deposit Insurance Act is amended to read as follows:

(C)

Risk-based assessment system defined

For purposes of this paragraph, the term risk-based assessment system means a system for calculating a depository institution’s assessment based on—

(i)

the probability that the Deposit Insurance Fund will incur a loss with respect to the institution;

(ii)

the likely amount of any such loss;

(iii)

the risks to the Deposit Insurance Fund attributable to such depository institution, including risks posed by its affiliates to the extent the Corporation determines appropriate, taking into account—

(I)

the amount, different categories, and concentrations of assets of the insured depository institution and its affiliates, including both on-balance sheet and off-balance sheet assets;

(II)

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 insured depository institution and its affiliates; and

(III)

any other factors the Corporation determines are relevant to assessing the risks; and

(iv)

the revenue needs of the Deposit Insurance Fund.

.

(b)

Section 7(b)(2) of the Federal Deposit Insurance Act is amended by striking subparagraph (D) and by redesignating subparagraph (E) as subparagraph (D).

1402.

Creating a risk-focused assessment base

Section 7(b)(2) of such Act, as amended, is further amended by amending subparagraph (C) to read as follows:

(C)

Assessment

The assessment of any insured depository institution imposed under this subsection shall be an amount equal to the product of—

(i)

an assessment rate established by the Corporation; and

(ii)

the amount of the insured depository institution’s average total assets during the assessment period minus the amount of the insured depository institution’s average tangible equity during the assessment period, minus additional deductions or adjustments necessary to establish assessments consistent with the definition under section 7(b)(1)(C) of the Federal Deposit Insurance Act for custodial banks (as defined by the Corporation based on factors including percentage of total revenues generated by custodial businesses and the level of assets under custody) or a bankers’ bank (as referred to in section 5136 of the Revised Statutes of the United States).

.

1403.

Elimination of procyclical assessments

Section 7(e) of the Federal Deposit Insurance Act is amended—

(1)

in paragraph (2)—

(A)

by amending subparagraph (B) to read as follows:

(B)

Limitation

The Board of Directors may, in its sole discretion, suspend or limit the declaration of payment of dividends under subparagraph (A).

;

(B)

by amending subparagraph (C) to read as follows:

(C)

Notice and opportunity for comment

The Corporation shall prescribe, by regulation, after notice and opportunity for comment, the method for the declaration, calculation, distribution, and payment of dividends under this paragraph

; and

(C)

by striking subparagraphs (D) through (G); and

(2)

in paragraph (4)(A) by striking paragraphs (2)(D) and and inserting paragraphs (2) and.

1404.

Enhanced access to information for deposit insurance purposes

(a)

Section 7(a)(2)(B) of the Federal Deposit Insurance Act is amended by striking , after agreement with the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Director of the Office of Thrift Supervision, as appropriate,.

(b)

Section 7(b)(1)(E) of the Federal Deposit Insurance Act is amended—

(1)

in clause (i), by striking such as and inserting including; and

(2)

by striking clause (iii).

1405.

Transition reserve ratio requirements to reflect new assessment base

(a)

Section 7(b)(3)(B) of the Federal Deposit Insurance Act is amended to read as follows:

(B)

Minimum reserve ratio

The reserve ratio designated by the Board of Directors for any year may not be less than 1.15 percent of estimated insured deposits, or the comparable percentage of the assessment base set forth in paragraph (2)(C).

.

(b)

Section 3(y)(3) of the Federal Deposit Insurance Act is amended by inserting , or such comparable percentage of the assessment base set forth in section 7(b)(2)(C) before the period.

(c)

For a period of not less than 5 years after the date of the enactment of this title, the Federal Deposit Insurance Corporation shall make available to the public the reserve ratio and the designated reserve ratio using both estimated insured deposits and the assessment base under section 7(b)(2)(C) of the Federal Deposit Insurance Act.

F

Improvements to the asset-backed securitization process

1501.

Short title

This subtitle may be cited as the Credit Risk Retention Act of 2009.

1502.

Credit risk retention

(a)

Amendment

The Securities Act of 1933 (15 U.S.C. 77a et seq.) is amended by inserting after section 28 the following new section:

29.

Credit risk retention

(a)

In general

(1)

Interest in loans made by creditors

Within 180 days of the date of the enactment of this section, the appropriate agencies shall prescribe regulations to require any creditor that makes a loan to retain an economic interest in a material portion of the credit risk of any such loan that the creditor transfers, sells, or conveys to a third party, including for the purpose of including such loan in a pool of loans backing an issuance of asset-backed securities.

(2)

Interest in assets backing asset-backed securities

The appropriate agencies shall prescribe regulations to require any securitizer of asset-backed securities that are backed by assets not described in paragraph (1) to retain an economic interest in a material portion of any such asset used to back an issuance of securities.

(b)

Alternative risk retention for credit securitizers

The appropriate agencies may apply the risk retention requirements of this section to securitizers of loans or particular types of loans in addition to or in substitution for any or all of the requirements that apply to creditors that make such loans or types of loans, if the agencies determine that applying the requirements to such securitizers would—

(1)

be consistent with helping to ensure high quality underwriting standards for creditors, taking into account other applicable laws, regulations, and standards; and

(2)

facilitate appropriate risk management practices by such creditors, improve access of consumers to credit on reasonable terms, or otherwise serve the public interest.

(c)

Standards for regulation

Regulations prescribed under subsections (a) and (b) shall—

(1)

prohibit a creditor or securitizer from directly or indirectly hedging or otherwise transferring the credit risk such creditor or securitizer is required to retain under the regulations;

(2)

require a creditor or securitizer to retain 5 percent of the credit risk on any loan that is transferred, sold, or conveyed by such creditor or securitized by such securitizer except—

(A)

an appropriate agency may specify that the percentage of risk may be less than 5 percent of the credit risk, or exempt such creditor or securitizer from the risk retention requirement, if—

(i)

the credit underwriting by the creditor or the due diligence by the securitizer meets such standards as an appropriate agency prescribes; and

(ii)

the loan that is transferred, sold, or conveyed by such creditor or securitized by such securitizer meets terms, conditions, and characteristics that are determined by an appropriate agency to reflect loans with reduced credit risk, such as loans that meet certain interest rate thresholds, loans that are fully amortizing, and loans that are included in a securitization in which a third-party purchaser specifically negotiates for the purchase of the first-loss position and provides due diligence on all individual loans in the pool prior to the issuance of the asset-backed securities, and retains a first-loss position; and

(B)

an appropriate agency may specify that the percentage of risk may be more than 5 percent of the credit risk if the underwriting by the creditor or due diligence by the securitizer is insufficient;

(3)

specify that the credit risk retained must be no less at risk for loss than the average of the credit risk not so retained; and

(4)

set the minimum duration of the required risk retention.

(d)

Exemptions and adjustments

(1)

In general

The appropriate agencies shall have authority to provide exemptions or adjustments to the requirements of this section, including exemptions or adjustments relating to the percentage of risk retention required to be held and the hedging prohibition.

(2)

Applicable standards

Any exemptions or adjustments provided under paragraph (1) shall—

(A)

be consistent with the purpose of ensuring high quality underwriting standards for creditors, taking into account other applicable laws, regulations, or standards; and

(B)

facilitate appropriate risk management practices by such creditors, improve access for consumers to credit on reasonable terms, or otherwise serve the public interest.

(e)

Appropriate agency defined

For purposes of this section, the term appropriate agency means any of the following agencies with regard to the respective loans and asset-backed securities:

(1)

Banking agencies

The Federal banking agencies, the National Credit Union Administration Board, and the Commission, with respect to any loan or asset-backed security for which there is no appropriate agency under paragraph (2).

(2)

Other agencies

(A)

With regard to any mortgage insured under title II of the National Housing Act, the Secretary of Housing and Urban Development.

(B)

With regard to any loan meeting the conforming loan standards of the Federal National Mortgage Corporation or the Federal Home Loan Mortgage Corporation or any asset-backed security issued by either such corporation, the Federal Housing Finance Agency.

(C)

With regard to any loan insured by the Rural Housing Service, the Rural Housing Service.

(f)

Joint appropriate agency regulations

All regulations prescribed by the agencies identified in subsection (e)(1) shall be prescribed jointly by such agencies.

(g)

Enforcement

(1)

Compliance with the requirements imposed under this section shall be enforced under—

(A)

section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), in the case of—

(i)

national banks, and Federal branches and Federal agencies of foreign banks, by the Office of the Comptroller of the Currency;

(ii)

member banks of the Federal Reserve System (other than national banks), branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act, bank holding companies, and subsidiaries of bank holding companies (other than insured depository institutions), by the Board; and

(iii)

banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System) and insured State branches of foreign banks, by the Board of Directors of the Federal Deposit Insurance Corporation;

(B)

section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), by the Director of the Office of Thrift Supervision, in the case of a savings association the deposits of which are insured by the Federal Deposit Insurance Corporation and a savings and loan holding company and to any subsidiary (other than a bank or subsidiary of that bank); and

(C)

the Federal Credit Union Act (12 U.S.C. 1751 et seq.), by the National Credit Union Administration Board with respect to any Federal credit union.

(2)

Except to the extent that enforcement of the requirements imposed under this section is specifically committed to some other Federal agency under paragraph (1), the Commission shall enforce such requirements.

(3)

The authority of the Commission under this section shall be in addition to its existing authority to enforce the securities laws.

(h)

Exclusions

Notwithstanding any other provision of this section, the requirements of this section shall not apply to any loan—

(1)

insured, guaranteed, or administered by the Secretary of Education, the Secretary of Agriculture, the Secretary of Veterans Affairs, or the Small Business Administration; or

(2)

made, insured, guaranteed, or purchased by any person that is subject to the supervision of the Farm Credit Administration, including the Federal Agricultural Mortgage Corporation.

(i)

Definitions

For purposes of this section:

(1)

The term asset-backed security has the meaning given such term in section 229.1101(c) of title 17, Code of Federal Regulations, or any successor thereto.

(2)

The term Federal banking agencies means the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation.

(3)

The term insured depository institution has the meaning given such term in section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)).

(4)

The term securitization vehicle means a trust, corporation, partnership, limited liability entity, special purpose entity, or other structure that—

(A)

is the issuer, or is created by the issuer, of pass-through certificates, participation certificates, asset-backed securities, or other similar securities backed by a pool of assets that includes loans; and

(B)

holds such loans.

(5)

The term securitizer means the person that transfers, conveys, or assigns, or causes the transfer, conveyance, or assignment of, loans, including through a special purpose vehicle, to any securitization vehicle, excluding any trustee that holds such loans for the benefit of the securitization vehicle.

.

(b)

Study on risk retention

(1)

Study

The Board, in coordination and consultation with the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, and the Securities and Exchange Commission, shall conduct a study of the combined impact by each individual class of asset-backed security of—

(A)

the new credit risk retention requirements contained in the amendment made by subsection (a); and

(B)

the Financial Accounting Statements 166 and 167 issued by the Financial Accounting Standards Board.

(2)

Report

Not later than 90 days after the date of enactment of this title, the Board shall submit to Congress a report on the study conducted under paragraph (1). Such report shall include statutory and regulatory recommendations for eliminating any negative impacts on the continued viability of the asset-backed securitization markets and on the availability of credit for new lending identified by the study conducted under paragraph (1).

1503.

Periodic and other reporting under the Securities Exchange Act of 1934 for asset-backed securities

Section 15(d) of Securities Exchange Act of 1934 (15 U.S.C. 78o(d)) is amended—

(1)

by inserting , other than securities of any class of asset-backed security (as defined in section 229.1101(c) of title 17, Code of Federal Regulations, or any successor thereto), after securities of each class;

(2)

by inserting at the end the following: The Commission may by rules and regulations provide for the suspension or termination of the duty to file under this subsection for any class of issuer of asset-backed security upon such terms and conditions and for such period or periods as it deems necessary or appropriate in the public interest or for the protection of investors. The Commission may, for the purposes of this subsection, classify issuers and prescribe requirements appropriate for each class of issuer of asset-backed security.; and

(3)

by inserting after the fifth sentence the following: The Commission shall adopt regulations under this subsection requiring each issuer of an asset-backed security to disclose, for each tranche or class of security, information regarding the assets backing that security. In adopting regulations under this subsection, the Commission shall set standards for the format of the data provided by issuers of an asset-backed security, which shall, to the extent feasible, facilitate comparison of such data across securities in similar types of asset classes. The Commission shall require issuers of asset-backed securities at a minimum to disclose asset-level or loan-level data necessary for investors to independently perform due diligence. Asset-level or loan-level data shall include data with unique identifiers relating to loan brokers or originators, the nature and extent of the compensation of the broker or originator of the assets backing the security, and the amount of risk retention of the originator or the securitizer of such assets..

1504.

Representations and warranties in asset-backed offerings

The Commission shall prescribe regulations on the use of representations and warranties in the asset-backed securities market that—

(1)

require credit rating agencies to include in reports accompanying credit ratings a description of the representations, warranties, and enforcement mechanisms available to investors and how they differ from representations, warranties, and enforcement mechanisms in similar issuances; and

(2)

require disclosure on fulfilled repurchase requests across all trusts aggregated by originator, so that investors may identify asset originators with clear underwriting deficiencies.

1505.

Exempted transactions under the Securities Act of 1933

(a)

In general

Section 4 of the Securities Act of 1933 (15 U.S.C. 77d) is amended—

(1)

by striking paragraph (5); and

(2)

by redesignating paragraph (6) as paragraph (5).

(b)

Conforming amendment

Section 3(a)(4)(B)(vii)(I) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)(B)(vii)(I)) is amended by striking 4(6) and inserting 4(5).

1506.

Study on the macroeconomic effects of risk retention requirements

(a)

Study required

The Chairman of the Financial Services Oversight Council shall carry out a study on the macroeconomic effects of the risk retention requirements under this subtitle, and the amendments made by this subtitle, with emphasis placed on potential beneficial effects with respect to stabilizing the real estate market. Such study shall include—

(1)

an analysis of the effects of risk retention on real estate asset price bubbles, including a retrospective estimate of what fraction of real estate losses may have been averted had such requirements been in force in recent years;

(2)

an analysis of the feasibility of minimizing real estate price bubbles by proactively adjusting the percentage of risk retention that must be borne by creditors and securitizers of real estate debt, as a function of regional or national market conditions;

(3)

a comparable analysis for proactively adjusting mortgage origination requirements;

(4)

an assessment of whether such proactive adjustments should be made by an independent regulator, or in a formulaic and transparent manner;

(5)

an assessment of whether such adjustments should take place independently or in concert with monetary policy; and

(6)

recommendations for implementation and enabling legislation.

(b)

Report

Not later than the end of the 180-day period beginning on the date of the enactment of this title, the Chairman of the Financial Services Oversight Council shall issue a report to the Congress containing any findings and determinations made in carrying out the study required under subsection (a).

G

Enhanced dissolution authority

1601.

Short title; Purpose

(a)

Short title

This subtitle may be cited as the Dissolution Authority for Large, Interconnected Financial Companies Act of 2009.

(b)

Purpose

The purpose of this subtitle is to protect the financial system of the United States in times of severe crisis by providing for the orderly resolution of large, interconnected financial companies whose failure could create, or increase, the risk of significant liquidity, credit, or other financial problems spreading among financial institutions or markets and thereby threaten the stability of the overall financial system of the United States. There shall be a strong presumption that resolution under the bankruptcy laws will remain the primary method of resolving financial companies, and the authorities contained in this subtitle will only be used in the most exigent circumstances.

1602.

Definitions

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

(1)

Appropriate regulatory agency

(A)

Corporation and commission

The term appropriate regulatory agency means—

(i)

the Corporation;

(ii)

the Commission, if the financial company, or an affiliate thereof, 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) (other than an insured depository institution)); and

(iii)

if the financial company or an affiliate of the financial company is an insurance company (other than an insured depository institution), the applicable State insurance authority of the State in which the insurance company is domiciled.

(B)

Rules of construction

More than 1 agency may be an appropriate regulatory agency with respect to any given financial company. In such instances, the Commission shall be the appropriate regulatory agency for purposes of section 1603 if the largest subsidiary of the financial company is a broker or dealer as measured by total assets as of the end of the previous calendar quarter, the applicable State insurance authority of the State in which the insurance company is domiciled shall be the appropriate regulatory agency for purposes of section 1603 if the financial company is an insurance company or if the largest subsidiary of the financial company is an insurance company as measured by total assets as of the end of the previous calendar quarter, and otherwise the Corporation shall be the appropriate regulatory agency for purposes of section 1603.

(2)

Bridge financial company

The term bridge financial company means a new financial company organized in accordance with section 1609(h) by the Corporation.

(3)

Commission

The term Commission means the Securities and Exchange Commission.

(4)

Corporation

The term Corporation means the Federal Deposit Insurance Corporation.

(5)

Covered financial company

The term covered financial company means a financial company for which a determination has been made pursuant to and in accordance with section 1603(b).

(6)

Covered subsidiary

The term covered subsidiary means a subsidiary covered in paragraph (9)(B)(v).

(7)

Customer property

The term customer property has the meaning ascribed to it in the Securities Investor Protection Act of 1970.

(8)

Federal reserve board

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

(9)

Financial company

The term financial company means any company that—

(A)

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

(B)

is—

(i)

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

(ii)

any company that has been subjected to stricter prudential regulation under section 1103;

(iii)

any insurance company;

(iv)

any company predominantly engaged in activities that 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)) or activities that have been identified for stricter prudential standards under section 1103 of this title; or

(v)

any subsidiary of companies described in clauses (i) through (iv) (other than an insured depository institution or any broker or dealer registered with the Commission under section 15(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)) that is a member of the Securities Investor Protection Corporation);

(C)

that 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.);

(D)

that is not a Federal home loan bank, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation; and

(E)

is not an insured depository institution (as defined in section 3(c) of the Federal Deposit Insurance act), a Federal credit union or a State-chartered credit union (as such terms are defined in section 101 of the Federal Credit Union Act), or a government-sponsored enterprise (as such term is defined in section 1004(f) of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (12 U.S.C. 1811 note)).

(10)

Fund

The term Fund means the Systemic Dissolution Fund established in accordance with section 1609(n).

(11)

Insurance company

The term insurance company means any entity covered by a State law designed specifically to deal with the rehabilitation, liquidation, or insolvency of an insurance company.

(12)

Secretary

The term Secretary shall mean the Secretary of the Treasury.

(13)

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, and the United States Virgin Islands.

(14)

Certain other terms

The terms affiliate, company, control, deposit, depository institution, foreign bank, insured depository institution, and subsidiary have the same meanings as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).

1603.

Systemic risk determination

(a)

Written recommendation of the federal reserve board and the appropriate regulatory agency

(1)

Vote required

(A)

In general

At the request of the Secretary, the Chairman of the Federal Reserve Board, or the appropriate regulatory agency, the Board and the appropriate regulatory agency shall, or on their own initiative the Board and the appropriate regulatory agency may, consider whether to make the written recommendation provided for in paragraph (2) with respect to a financial company.

(B)

Two-thirds agreement

Any recommendation under subparagraph (A) shall be made upon a vote of not less than two-thirds of the members of the Federal Reserve Board then serving and not less than two thirds of any members of the board or commission then serving of the appropriate regulatory agency, as applicable.

(2)

Recommendation required

Any written recommendations made by the Federal Reserve Board and the appropriate regulatory agency under paragraph (1) shall contain the following:

(A)

A description of the effect that the default of the financial company would have on economic conditions or financial stability in the United States.

(B)

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.

(C)

A recommendation regarding the nature and the extent of actions that the Board and the appropriate regulatory agency recommend be taken under section 1604 regarding the financial company.

(b)

Determination by the secretary

Notwithstanding any other provision of Federal law or the law of any State, if, upon the written recommendation of the Federal Reserve Board and the appropriate regulatory agency as provided for in subsection (a)(1), the Secretary (in consultation with the President) determines that—

(1)

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

(2)

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

(3)

any action under section 1604 would avoid or mitigate such adverse effects, taking into consideration the effectiveness of the action in mitigating potential adverse effects on the financial system or economic conditions, the cost to the general fund of the Treasury, and the potential to increase moral hazard on the part of creditors, counterparties, and shareholders in the financial company,

then the Secretary must take action under section 1604(a), the Corporation must act in accordance with section 1604(b), and the Corporation may take 1 or more actions specified in section 1604(c) in accordance with the requirements of that subsection, except that, prior to the Secretary or Corporation taking any action under section 1604, the Federal Reserve Board or the appropriate Federal regulatory agency shall take action to avoid or mitigate potential adverse effects on low-income, minority, or underserved communities affected by the failure of such financial company.
(c)

Documentation and review

(1)

In general

The Secretary shall—

(A)

document any determination under subsection (b); and

(B)

retain the documentation for review under paragraph (2).

(2)

GAO review

The Comptroller General of the United States shall review and report to the Congress on any determination under subsection (b), including—

(A)

the basis for the determination;

(B)

the purpose for which any action was taken pursuant thereto; and

(C)

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

(3)

Report to congress

Within 48 hours after a determination is made under subsection (b), the Secretary shall provide written notice of the determination 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. The notice shall include a description of the basis for the determination.

(d)

Default or in danger of default

For purposes of subsection (b), a financial company shall be considered to be in default or in danger of default if any of the following conditions exist, as determined in accordance with that subsection:

(1)

A case has been, or likely will promptly be, commenced with respect to the financial company under title 11, United States Code.

(2)

The financial company is critically undercapitalized, as such term has been or may be defined by the Federal Reserve Board.

(3)

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 without assistance under section 1604.

(4)

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

(5)

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.

1604.

Dissolution; stabilization

(a)

Appointment of receiver

(1)

In general

Upon the Secretary making a determination in accordance with section 1603(b), the Secretary shall appoint the Corporation as receiver for the covered financial company.

(2)

Time limit on receivership authority

Any appointment of the Corporation as receiver under paragraph (1) shall terminate on the date that is the end of the 1-year period beginning on the date such appointment is made.

(3)

Extension of time limit

The time limit established in paragraph (2) may be extended by the Secretary for up to 1 additional year if—

(A)

the Corporation has not completed the dissolution of the company within the time provided in paragraph (2); and

(B)

the Secretary certifies in writing that continuation of the receivership is necessary—

(i)

to protect the best interests of the taxpayers of the United States; and

(ii)

to protect the stability of the financial system and the economy of the United States.

(4)

Further extension

The time limit, as extended in paragraph (3), may be extended for up to 1 additional year if—

(A)

the conditions of paragraph (3) are met; and

(B)

the Corporation submits a report to the Congress, no later than 60 days before the receivership will expire under the extended limit under paragraph (3), that describes in detail—

(i)

the basis for the determination by the Corporation that a second extension is necessary; and

(ii)

the specific plan of the Corporation for concluding the receivership before the end of the proposed additional year.

(b)

Dissolution limitations

(1)

In general

An insolvent financial company may be dissolved under this subtitle only if the failure and dissolution of such company under title 11, United States Code, would be systemically destabilizing, as determined by the appropriate Federal regulatory agencies and the Secretary of the Treasury (in consultation with the President) in accordance with section 1603(b).

(2)

Liquidation

A financial company that comes within coverage of this subtitle for dissolution shall be placed in liquidation, and the associated liquidation costs shall be paid from the company’s assets and borne by the shareholders and unsecured creditors of such company.

(3)

Assessment for excess liquidation costs

Any liquidation costs that exceed the amount of liquidated assets of the company shall be paid through assessments on large financial companies.

(c)

Consultation

The Corporation, as receiver—

(1)

shall consult with the regulators of the covered financial company and its covered subsidiaries for purposes of ensuring an orderly dissolution of the covered financial company;

(2)

may consult with, or under section 1609(a)(1)(B)(v) or section 1609(a)(1)(K) acquire services of, any outside experts as appropriate to inform and aid the Corporation in the dissolution process; and

(3)

shall consult with the primary regulators of any subsidiaries of the covered financial company that are not covered subsidiaries as described in section 1602(9)(B)(v) and coordinate with such regulators regarding the treatment of such solvent subsidiaries and the separate dissolution of any such insolvent subsidiaries under other governmental authority, as appropriate.

(d)

Emergency stabilization after appointment of receiver

Upon the Secretary appointing the Corporation as receiver under subsection (a), the Corporation may, in its corporate capacity and as an agency of the United States, with the approval of the Secretary and subject to the conditions in subsections (f) through (g), take the following actions under such terms and conditions that the Corporation and the Secretary jointly deem appropriate:

(1)

Making loans to, or purchasing any debt obligation of, the covered financial company or any covered subsidiary.

(2)

Purchasing 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 one 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 company or any covered subsidiary to secure repayment of any transactions conducted under this subsection.

(5)

Selling or transferring all, or any part thereof, of such acquired assets, liabilities, or obligations of the covered financial company or any covered subsidiary.

(e)

Treatment of insurance companies and insurance company subsidiaries

(1)

In general

Notwithstanding subsection (a), if an insurance company covered by a State law designed specifically to deal with the rehabilitation, liquidation or insolvency of an insurance company is a covered financial company or a subsidiary of a covered financial company, resolution of such insurance company, and any subsidiary of such company, will be conducted as provided under such State law.

(2)

Exception for covered subsidiaries

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

(3)

Backup authority

Notwithstanding paragraph (1), with respect to a covered financial company described under paragraph (1), if, after the end of the 60-day period beginning on the date a determination is made under section 1603(b) 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 dissolution under the State's laws and requirements, 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 dissolution under the State’s laws and requirements.

(f)

Mandatory terms and conditions for all stabilization actions

The Corporation as receiver is authorized to take the stabilization actions listed in subsection (d) only if—

(1)

the Secretary and the Corporation determine that such action is necessary for the purpose of financial stability and not for the purpose of preserving the covered financial company;

(2)

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

(3)

the Corporation ensures that any funds from taxpayers shall be repaid as part of the resolution process before payments are made to creditors;

(4)

the Corporation ensures that unsecured creditors bear losses;

(5)

the Corporation ensures 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 the Corporation is appointed as receiver); and

(6)

the Corporation ensures 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).

(g)

Recoupment of funds expended for systemic stabilization purposes

Amounts expended from the Fund by the Corporation under this section shall be repaid in full to the Fund only from the following sources:

(1)

Dissolution process

Amounts attributable to the proceeds of the sale of, or income from, the assets of the covered financial company.

(2)

Industry assessments

If the sources described in paragraph (1) are insufficient to repay the amount of the stabilization action in full, the difference shall be recouped through assessments on financial companies in accordance with section 1609(o).

1605.

Judicial review

If a receiver is appointed in accordance with section 1604, the covered financial company may, not later than 30 days thereafter, bring an action in the United States district court for the judicial district in which the home office of such covered financial company is located, or in the United States District Court for the District of Columbia, for an order requiring that the receiver be removed, and the court shall, upon the merits, dismiss such action or direct the receiver to be removed. Review of such an action shall be limited to the appointment of a receiver under section 1604.

1606.

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 covered financial company’s shareholders or creditors for acquiescing in or consenting in good faith to—

(1)

the Secretary’s appointment of the Corporation as receiver for the covered financial company under section 1604; or

(2)

an acquisition, combination, or transfer of assets or liabilities under section 1609.

1607.

Termination and exclusion of other actions

(a)

Termination and exclusion of bankruptcy

The Corporation’s acting as receiver for a covered financial company under this subtitle shall immediately, and by operation of law, terminate any case commenced with respect to the covered financial company under title 11, United States Code, or any proceeding under any State insolvency law with respect to the covered financial company, and no such case or proceeding may be commenced with respect to the covered financial company at any time while the Corporation acts as receiver for the covered financial company.

(b)

Conversion to bankruptcy

(1)

Conversion

The Corporation may at any time, with the approval of the Secretary and after consulting with the Council, convert the receivership of a covered financial company to a proceeding under chapter 7 or 11 of title 11, United States Code, by filing a petition against the covered financial company under section 303(m) of such title. The Corporation may serve as the trustee for the covered financial company in bankruptcy.

(2)

Bridge financial company

The Corporation’s exercise of authority under paragraph (1) shall not affect any powers or duties of the Corporation with regard to any bridge financial company established under section 1609(h).

(c)

Reporting to the Congress

(1)

In general

(A)

Initial report

Upon the appointment of the Corporation as receiver under section 1604(a), the Corporation shall issue a report on the issue described under paragraph (3)(A).

(B)

Continuing reports

At the end of each 180-day period after the appointment of the Corporation as receiver under section 1604(a), and continuing while the Corporation is acting as receiver, the Corporation shall issue a report on the issues described under subparagraphs (A) through (C) of paragraph (3).

(2)

Committees to receive reports

Reports issued under this subsection shall be issued 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.

(3)

Reporting issues

(A)

Why the receivership should continue instead of converting the receivership into a proceeding under chapter 7 or 11 of title 11, United States Code.

(B)

The extent to which unsecured creditors are likely to receive at least as much as they would receive if the receivership of the covered financial company was converted to a case under chapter 7 of title 11, United States Code.

(C)

An explanation of each instance where the Corporation as receiver of a covered financial company waived the requirement of 12 CFR Part 366 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.

1608.

Rulemaking

The Corporation may, after following the notice and comment rulemaking requirements under the Administrative Procedure Act, prescribe such regulations as the Corporation considers necessary or appropriate to implement the provisions of this title.

1609.

Powers and duties of 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 section 1604, and by operation of law, succeed to—

(i)

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

(ii)

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

(B)

Operate the covered financial company

The Corporation as receiver for a covered financial company may—

(i)

take over the assets of and operate the covered financial company with all 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 due the covered financial company;

(iii)

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

(iv)

preserve and conserve the assets and property of the covered financial company; 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’s officers, directors, and shareholders

(i)

In general

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 section.

(ii)

Presumption

There shall be a strong presumption that the Corporation, as receiver, will remove management responsible for the failed condition of the covered financial company (if such management has not already been removed at the time the Corporation is appointed as receiver).

(D)

Additional powers as receiver

The Corporation may, as receiver, and subject to all legally enforceable and perfected security interests, place the covered financial company in liquidation and proceed 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)

Organization of new companies

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

(F)

Merger; transfer of assets and liabilities

(i)

In general

Subject to clause (ii), the Corporation as receiver may—

(I)

merge the covered financial company with another company; or

(II)

transfer any asset or liability of the covered financial company (including 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

(I)

In general

If a transaction described in clause (i) 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 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 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, or is extended pursuant to subsection (e)(2) of such section.

(II)

Emergency

If the Secretary in consultation with the Chairman of the Federal Reserve Board has found that the Corporation must act immediately to prevent the probable failure of the covered financial company involved, the approval and prior notification referred to in subclause (I) shall not be required and the transaction may be consummated immediately by the Corporation. The preceding sentence shall not otherwise modify, impair, or supercede the operation of any of the antitrust laws (as defined 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 relates to unfair methods of competition).

(G)

Payment of valid obligations

The Corporation, as receiver, shall, to the extent 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.

(H)

Subpoena authority

(i)

In general

The Corporation may, for purposes of carrying out any power, authority, or duty with respect to a 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 covered financial company were an insured depository institution.

(ii)

Rule of construction

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

(I)

Incidental powers

The Corporation, as receiver, may—

(i)

exercise all powers and authorities specifically granted to receivers under this section and such incidental powers as shall be necessary to carry out such powers; and

(ii)

take any action authorized by this section, which the Corporation determines is in the best interests of the covered financial company, its customers, its creditors, its counterparties, or the stability of the financial system.

(J)

Utilization of private sector

In carrying out its responsibilities in the management and disposition of assets from a covered financial company, the Corporation, as receiver, 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 utilization of such services is practicable, efficient, and cost effective.

(K)

Shareholders and creditors of covered financial company

Notwithstanding any other provision of law, the Corporation as receiver for a covered financial company pursuant to this section and its succession, by operation of law, to the rights, titles, powers, and privileges described in subparagraph (A) 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 in section 1609(b).

(L)

Coordination with foreign financial authorities

The Corporation as receiver for a covered financial company shall coordinate with the appropriate foreign financial authorities regarding the dissolution of subsidiaries of the covered financial company that are established in a country other than the United States.

(M)

Appointment of Consumer Privacy Advisor

(i)

Appointment

Upon the appointment of the Corporation as receiver under section 1604(a), the Corporation shall appoint a Consumer Privacy Advisor.

(ii)

Duties

The Consumer Privacy Advisor appointed under clause (i) shall advise the Corporation with respect to—