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H.R. 1309 (114th): Systemic Risk Designation Improvement Act of 2015

The text of the bill below is as of Mar 4, 2015 (Introduced).


I

114th CONGRESS

1st Session

H. R. 1309

IN THE HOUSE OF REPRESENTATIVES

March 4, 2015

(for himself, Mr. Stivers, Mr. Williams, Mr. Murphy of Florida, Ms. Sewell of Alabama, Mr. David Scott of Georgia, and Ms. Sinema) introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To amend the Dodd-Frank Wall Street Reform and Consumer Protection Act to specify when bank holding companies may be subject to certain enhanced supervision, and for other purposes.

1.

Short title

This Act may be cited as the Systemic Risk Designation Improvement Act of 2015.

2.

Table of contents

The table of contents for the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301 et seq.) is amended by striking the item relating to section 113 and inserting the following:

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

.

3.

Revisions to council authority

(a)

Purposes and duties

Section 112 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5322) is amended in subsection (a)(2)(I) by inserting before the semicolon , which have been the subject of a final determination under section 113.

(b)

Bank holding company designation

Section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5323) is amended—

(1)

by amending the heading for such section to read as follows: Authority to require enhanced supervision and regulation of certain nonbank financial companies and certain bank holding companies;

(2)

by redesignating subsections (c), (d), (e), (f), (g), (h), and (i) as subsections (d), (e), (f), (g), (h), (i), and (j), respectively;

(3)

by inserting after subsection (b) the following:

(c)

Bank holding companies subject to enhanced supervision and prudential standards under section 165

(1)

Determination

The Council, on a nondelegable basis and by a vote of not fewer than 2⁄3 of the voting members then serving, including an affirmative vote by the Chairperson, may determine that a bank holding company shall be subject to enhanced supervision and prudential standards by the Board of Governors, in accordance with section 165, if the Council determines, based on the considerations in paragraph (2), that material financial distress at the bank holding company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the bank holding company, could pose a threat to the financial stability of the United States.

(2)

Considerations

In making a determination under paragraph (1), the Council shall use the indicator-based measurement approach established by the Basel Committee on Banking Supervision to determine systemic importance, which considers—

(A)

the size of the bank holding company;

(B)

the interconnectedness of the bank holding company;

(C)

the extent of readily available substitutes or financial institution infrastructure for the services of the bank holding company;

(D)

the global cross-jurisdictional activity of the bank holding company; and

(E)

the complexity of the bank holding company.

(3)

GSIBs designated by operation of law

Notwithstanding any other provision of this subsection, a bank holding company that is designated, as of the date of enactment of this subsection, as a Global Systemically Important Bank by the Financial Stability Board shall be deemed to have been the subject of a final determination under paragraph (1).

;

(4)

in subsection (d), as so redesignated—

(A)

in paragraph (1)(A), by striking subsection (a)(2) or (b)(2) and inserting subsection (a)(2), (b)(2), or (c)(2); and

(B)

in paragraph (4), by striking Subsections (d) through (h) and inserting Subsections (e) through (i);

(5)

in subsections (e), (f), (g), (h), (i), and (j)—

(A)

by striking subsections (a) and (b) each place such term appears and inserting subsections (a), (b), and (c); and

(B)

by striking nonbank financial company each place such term appears and inserting bank holding company for which there has been a determination under subsection (c) or nonbank financial company;

(6)

in subsection (g), as so redesignated, by striking subsection (e) and inserting subsection (f);

(7)

in subsection (h), as so redesignated, by striking subsection (a), (b), or (c) and inserting subsection (a), (b), (c), or (d); and

(8)

in subsection (i), as so redesignated, by striking subsection (d)(2), (e)(3), or (f)(5) and inserting subsection (e)(2), (f)(3), or (g)(5).

(c)

Enhanced supervision

Section 115 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5325) is amended—

(1)

in subsection (a)(1), by striking large, interconnected bank holding companies and inserting bank holding companies which have been the subject of a final determination under section 113;

(2)

in subsection (a)(2)—

(A)

in subparagraph (A), by striking ; or at the end and inserting a period;

(B)

by striking the Council may and all that follows through differentiate and inserting the Council may differentiate; and

(C)

by striking subparagraph (B); and

(3)

in subsection (b)(3), by striking subsections (a) and (b) of section 113 each place such term appears and inserting subsections (a), (b), and (c) of section 113.

(d)

Reports

Section 116(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5326(a)) is amended by striking with total consolidated assets of $50,000,000,000 or greater and inserting which has been the subject of a final determination under section 113.

(e)

Mitigation

Section 121 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5331) is amended—

(1)

in subsection (a), by striking with total consolidated assets of $50,000,000,000 or more and inserting which has been the subject of a final determination under section 113; and

(2)

in subsection (c), by striking subsection (a) or (b) of section 113 and inserting subsection (a), (b), or (c) of section 113.

(f)

Office of financial research

Section 155 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5345) is amended in subsection (d) by striking with total consolidated assets of 50,000,000,000 or greater and inserting which have been the subject of a final determination under section 113.

4.

Revisions to Board authority

(a)

Acquisitions

Section 163 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5363) is amended by striking with total consolidated assets equal to or greater than $50,000,000,000 each place such term appears and inserting which has been the subject of a final determination under section 113.

(b)

Management interlocks

Section 164 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5364) is amended by striking with total consolidated assets equal to or greater than $50,000,000,000 and inserting which has been the subject of a final determination under section 113.

(c)

Enhanced supervision and prudential standards

Section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5365) is amended—

(1)

in subsection (a), by striking with total consolidated assets equal to or greater than $50,000,000,000 and inserting which have been the subject of a final determination under section 113;

(2)

in subsection (a)(2)—

(A)

by striking (A) In general.—; and

(B)

by striking subparagraph (B);

(3)

by striking subsections (a) and (b) of section 113 each place such term appears and inserting subsections (a), (b), and (c) of section 113; and

(4)

in subsection (j), by striking with total consolidated assets equal to or greater than $50,000,000,000 and inserting which has been the subject of a final determination under section 113.

(d)

Conforming Amendment

The second subsection (s) (relating to Assessments, Fees, and Other Charges for Certain Companies) of section 11 of the Federal Reserve Act (12 U.S.C. 248) is amended—

(1)

by redesignating such subsection as subsection (t); and

(2)

in paragraph (2)—

(A)

in subparagraph (A), by striking having total consolidated assets of $50,000,000,000 or more; and inserting which have been the subject of a final determination under section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act; and;

(B)

by striking subparagraph (B); and

(C)

by redesignating subparagraph (C) as subparagraph (B).

5.

Effective date; rule of application

(a)

Effective date

The Financial Stability Oversight Council may begin proceedings with respect to a bank holding company under section 113(c)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as added by this Act, on the date of the enactment of this Act, but may not make a final determination under such section 113(c)(1) with respect to a bank holding company before the end of the 1-year period beginning on the date of the enactment of this Act.

(b)

Immediate application to large bank holding companies

During the 1-year period described under subsection (a), a bank holding company with total consolidated assets equal to or greater than $50,000,000,000 shall be deemed to have been the subject of a final determination under section 113(c)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.