I
114th CONGRESS
2d Session
H. R. 5983
IN THE HOUSE OF REPRESENTATIVES
September 9, 2016
Mr. Hensarling (for himself, Mr. Garrett, Mr. Neugebauer, Mr. Luetkemeyer, Mr. Huizenga of Michigan, and Mr. Duffy) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committees on Agriculture, Ways and Means, the Judiciary, Oversight and Government Reform, Transportation and Infrastructure, Rules, the Budget, and Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
A BILL
To create hope and opportunity for consumers, investors, and entrepreneurs by ending bailouts and Too Big to Fail, holding Washington and Wall Street accountable, eliminating red tape to increase access to capital and credit, and repealing the provisions of the Dodd-Frank Act that make America less prosperous, less stable, and less free, and for other purposes.
Short title; table of contents
Short title
This Act may be cited as the Financial CHOICE Act of 2016
.
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Title I—Regulatory Relief for Strongly Capitalized, Well Managed Banking Organizations
Sec. 101. Capital election.
Sec. 102. Regulatory relief.
Sec. 103. Contingent capital study.
Sec. 104. Study on altering the current prompt corrective action rules.
Sec. 105. Definitions.
Title II—Ending Too Big to Fail
and Bank Bailouts
Subtitle A—Reform of the Financial Stability Act of 2010
Sec. 211. Repeal and modification of provisions of the Financial Stability Act of 2010.
Subtitle B—Repeal of the Orderly Liquidation Authority
Sec. 221. Repeal of the orderly liquidation authority.
Subtitle C—Financial Institution Bankruptcy
Sec. 231. General provisions relating to covered financial corporations.
Sec. 232. Liquidation, reorganization, or recapitalization of a covered financial corporation.
Sec. 233. Amendments to title 28, United States Code.
Subtitle D—Ending Government Guarantees
Sec. 241. Repeal of obligation guarantee program.
Sec. 242. Repeal of systemic risk determination in resolutions.
Sec. 243. Restrictions on use of the Exchange Stabilization Fund.
Subtitle E—Eliminating Financial Market Utility Designations
Sec. 251. Repeal of title VIII.
Title III—Empowering Americans to Achieve Financial Independence
Subtitle A—Separation of Powers and Liberty Enhancements
Sec. 311. Consumer Financial Opportunity Commission.
Sec. 312. Bringing the Commission into the regular appropriations process.
Sec. 313. Consumer Financial Opportunity Commission Inspector General Reform.
Sec. 314. Private parties authorized to compel the Commission to seek sanctions by filing civil actions; Adjudications deemed actions.
Sec. 315. Civil investigative demands to be appealed to courts.
Sec. 316. Commission dual mandate and economic analysis.
Sec. 317. No deference to Commission interpretation.
Subtitle B—Administrative Enhancements
Sec. 321. Commission Advisory Boards.
Sec. 322. Advisory opinions.
Sec. 323. Reform of Consumer Financial Civil Penalty Fund.
Sec. 324. Commission research paper transparency.
Sec. 325. Commission pay fairness.
Sec. 326. Separation of market monitoring functions and supervisory functions.
Sec. 327. Requirement to verify information in the complaint database before it may be released to the general public.
Sec. 328. Commission supervision limited to banks, thrifts, and credit unions with greater than $50 billion in assets.
Sec. 329. Transfer of old OTS building from OCC to GSA.
Subtitle C—Policy Enhancements
Sec. 331. Consumer right to financial privacy.
Sec. 332. Repeal of Council authority to set aside Bureau rules and requirement of safety and soundness considerations when issuing rules.
Sec. 333. State and tribal payday loan regulation 5-year exemption.
Sec. 334. Reforming indirect auto financing guidance.
Sec. 335. Prohibition of Government price controls for payment card transactions.
Sec. 336. Annual studies on ending the conservatorship of Fannie Mae, Freddie Mac, and reforming the housing finance system.
Sec. 337. Removal of abusive
authority.
Sec. 338. Repeal of authority to restrict arbitration.
Title IV—Capital Markets Improvements
Subtitle A—SEC Reform, Restructuring, and Accountability
Sec. 401. Authorization of appropriations.
Sec. 402. Report on unobligated appropriations.
Sec. 403. SEC Reserve Fund abolished.
Sec. 404. Fees to offset appropriations.
Sec. 405. Implementation of recommendations.
Sec. 406. Office of Credit Ratings to report to the Division of Trading and Markets.
Sec. 407. Office of Municipal Securities to report to the Division of Trading and Markets.
Sec. 408. Independence of Commission Ombudsman.
Sec. 409. Coordination with the Investor Advisory Committee.
Sec. 410. Duties of Investor Advocate.
Sec. 411. Internal risk controls.
Sec. 412. Applicability of Notice and Comment Requirements of the Administrative Procedure Act to Guidance Voted on by the Commission.
Sec. 413. Process for closing investigations.
Sec. 414. Enforcement Ombudsman.
Sec. 415. Process to ensure enforcement actions are within authority of Commission.
Sec. 416. Process to permit recipient of Wells notification to appear before Commission staff in-person.
Sec. 417. Publication of enforcement manual.
Sec. 418. Private parties authorized to compel the Securities and Exchange Commission to seek sanctions by filing civil actions.
Sec. 419. Certain findings required to approve civil money penalties against issuers.
Sec. 420. Repeal of authority of the Commission to prohibit persons from serving as officers or directors.
Sec. 421. Subpoena duration and renewal.
Sec. 422. Elimination of automatic disqualifications.
Sec. 423. Confidentiality of records obtained from foreign securities and law enforcement authorities.
Sec. 424. Clarification of authority to impose sanctions on persons associated with a broker or dealer.
Sec. 425. Congressional access to information held by the Public Company Accounting Oversight Board.
Sec. 426. Repeal of requirement for Public Company Accounting Oversight Board to use certain funds for merit scholarship program.
Sec. 427. Reallocation of fines for violations of rules of municipal securities rulemaking board.
Subtitle B—Eliminating Excessive Government Intrusion in the Capital Markets
Sec. 441. Repeal of Department of Labor fiduciary rule and requirements prior to rulemaking relating to standards of conduct for brokers and dealers.
Sec. 442. Exemption from risk retention requirements for nonresidential mortgage.
Sec. 443. Frequency of shareholder approval of executive compensation.
Sec. 444. Requirement for municipal advisor for issuers of municipal securities.
Sec. 445. Small issuer exemption from internal control evaluation.
Sec. 446. Exemptive authority for certain provisions relating to registration of nationally recognized statistical rating organizations.
Sec. 447. Restriction on recovery of erroneously awarded compensation.
Sec. 448. Risk-Based Examinations of Nationally Recognized Statistical Rating Organizations.
Sec. 449. Repeals.
Sec. 450. Exemption of and reporting by private equity fund advisers.
Sec. 451. Records and reports of private funds.
Sec. 452. Definition of accredited investor.
Sec. 453. Repeal of certain provisions requiring a study and report to Congress.
Sec. 454. Technical correction.
Sec. 455. Repeal.
Subtitle C—Commodity Futures Trading Commission Reforms
Sec. 461. Division directors.
Sec. 462. Procedures governing actions taken by commission staff.
Sec. 463. Strategic technology plan.
Sec. 464. Internal risk controls.
Sec. 465. Subpoena duration and renewal.
Sec. 466. Applicability of notice and comment requirements of the administrative procedure act to guidance voted on by the commission.
Sec. 467. Judicial review of commission rules.
Sec. 468. Cross-border regulation of derivatives transactions.
Subtitle D—Harmonization of Derivatives Rules
Sec. 471. Agency review and harmonization of rules relating to the regulation of over-the-counter swaps markets.
Title V—Improving Insurance Coordination through an Independent Advocate
Sec. 501. Repeal of the Federal Insurance Office; Creation of the Office of the Independent Insurance Advocate.
Sec. 502. Treatment of covered agreements.
Title VI—Demanding Accountability from Financial Regulators and Devolving Power Away from Washington
Subtitle A—Cost-Benefit Analyses
Sec. 611. Definitions.
Sec. 612. Required regulatory analysis.
Sec. 613. Rule of construction.
Sec. 614. Public availability of data and regulatory analysis.
Sec. 615. Five-year regulatory impact analysis.
Sec. 616. Retrospective review of existing rules.
Sec. 617. Judicial review.
Sec. 618. Chief Economists Council.
Sec. 619. Conforming amendments.
Sec. 620. Other regulatory entities.
Sec. 621. Avoidance of duplicative or unnecessary analyses.
Subtitle B—Congressional Review of Federal Financial Agency Rulemaking
Sec. 631. Congressional review.
Sec. 632. Congressional approval procedure for major rules.
Sec. 633. Congressional disapproval procedure for nonmajor rules.
Sec. 634. Definitions.
Sec. 635. Judicial review.
Sec. 636. Effective date of certain rules.
Sec. 637. Budgetary effects of rules subject to section 632 of the Financial CHOICE Act of 2016.
Subtitle C—Judicial Review of Agency Actions
Sec. 641. Scope of judicial review of agency actions.
Subtitle D—Leadership of Financial Regulators
Sec. 651. Federal Deposit Insurance Corporation.
Sec. 652. Federal Housing Finance Agency.
Sec. 653. National Credit Union Administration.
Sec. 654. Office of the Comptroller of the Currency.
Subtitle E—Congressional Oversight of Appropriations
Sec. 661. Bringing the Federal Deposit Insurance Corporation into the regular appropriations process.
Sec. 662. Bringing the Federal Housing Finance Agency into the regular appropriations process.
Sec. 663. Bringing the National Credit Union Administration into the regular appropriations process.
Sec. 664. Bringing the Office of the Comptroller of the Currency into the regular appropriations process.
Sec. 665. Bringing the non-monetary policy related functions of the Board of Governors of the Federal Reserve System into the regular appropriations process.
Subtitle F—International Processes
Sec. 671. Requirements for international processes.
Title VII—Fed Oversight Reform and Modernization
Sec. 701. Requirements for policy rules of the Federal Open Market Committee.
Sec. 702. Federal Open Market Committee blackout period.
Sec. 703. Membership of Federal Open Market Committee.
Sec. 704. Frequency of testimony of the Chairman of the Board of Governors of the Federal Reserve System to Congress.
Sec. 705. Vice Chairman for Supervision report requirement.
Sec. 706. Salaries, financial disclosures, and office staff of the Board of Governors of the Federal Reserve System.
Sec. 707. Amendments to powers of the Board of Governors of the Federal Reserve System.
Sec. 708. Interest rates on balances maintained at a Federal Reserve bank by depository institutions established by Federal Open Market Committee.
Sec. 709. Audit reform and transparency for the Board of Governors of the Federal Reserve System.
Sec. 710. Establishment of a Centennial Monetary Commission.
Sec. 711. Public transcripts of FOMC meetings.
Title VIII—Demanding Accountability from Wall Street
Subtitle A—SEC Penalties Modernization
Sec. 801. Enhancement of civil penalties for securities laws violations.
Sec. 802. Updated civil money penalties of Public Company Accounting Oversight Board.
Sec. 803. Updated civil money penalty for controlling persons in connection with insider trading.
Sec. 804. Update of certain other penalties.
Sec. 805. Monetary sanctions to be used for the relief of victims.
Sec. 806. GAO report on use of civil money penalty authority by Commission.
Subtitle B—FIRREA Penalties Modernization
Sec. 811. Increase of civil and criminal penalties originally established in the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
Title IX—Repeal of the Volcker Rule and Other Provisions
Sec. 901. Repeals.
Title X—Unleashing Opportunities for Small Businesses, Innovators, and Job Creators by Facilitating Capital Formation
Subtitle A—Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification
Sec. 1001. Registration exemption for merger and acquisition brokers.
Sec. 1002. Effective date.
Subtitle B—Encouraging Employee Ownership
Sec. 1006. Increased threshold for disclosures relating to compensatory benefit plans.
Subtitle C—Small Company Disclosure Simplification
Sec. 1011. Exemption from XBRL requirements for emerging growth companies and other smaller companies.
Sec. 1012. Analysis by the SEC.
Sec. 1013. Report to Congress.
Sec. 1014. Definitions.
Subtitle D—Securities and Exchange Commission Overpayment Credit
Sec. 1016. Refunding or crediting overpayment of section 31 fees.
Subtitle E—Fair Access to Investment Research
Sec. 1021. Safe harbor for investment fund research.
Subtitle F—Accelerating Access to Capital
Sec. 1026. Expanded eligibility for use of Form S–3.
Subtitle G—SEC Small Business Advocate
Sec. 1031. Establishment of Office of the Advocate for Small Business Capital Formation and Small Business Capital Formation Advisory Committee.
Subtitle H—Small Business Credit Availability
Sec. 1036. Business development company ownership of securities of investment advisers and certain financial companies.
Sec. 1037. Expanding access to capital for business development companies.
Sec. 1038. Parity for business development companies regarding offering and proxy rules.
Subtitle I—Fostering Innovation
Sec. 1041. Temporary exemption for low-revenue issuers.
Subtitle J—Small Business Capital Formation Enhancement
Sec. 1046. Annual review of government-business forum on capital formation.
Subtitle K—Helping Angels Lead Our Startups
Sec. 1051. Definition of angel investor group.
Sec. 1052. Clarification of general solicitation.
Subtitle L—Main Street Growth
Sec. 1056. Venture exchanges.
Subtitle M—Micro Offering Safe Harbor
Sec. 1061. Exemptions for micro-offerings.
Subtitle N—Private Placement Improvement
Sec. 1066. Revisions to SEC Regulation D.
Subtitle O—Supporting America’s Innovators
Sec. 1071. Investor limitation for qualifying venture capital funds.
Subtitle P—Fix Crowdfunding
Sec. 1076. Crowdfunding vehicles.
Sec. 1077. Crowdfunding exemption from registration.
Subtitle Q—Corporate Governance Reform and Transparency
Sec. 1081. Definitions.
Sec. 1082. Registration of proxy advisory firms.
Sec. 1083. Commission annual report.
Subtitle R—Senior Safe
Sec. 1091. Immunity.
Sec. 1092. Training required.
Sec. 1093. Relationship to State law.
Subtitle S—National Securities Exchange Regulatory Parity
Sec. 1096. Application of exemption.
Title XI—Regulatory Relief for Main Street and Community Financial Institutions
Subtitle A—Preserving Access to Manufactured Housing
Sec. 1101. Mortgage originator definition.
Sec. 1102. High-Cost mortgage definition.
Subtitle B—Mortgage Choice
Sec. 1106. Definition of points and fees.
Subtitle C—Financial Institution Customer Protection
Sec. 1111. Requirements for deposit account termination requests and orders.
Sec. 1112. Amendments to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
Subtitle D—Portfolio Lending and Mortgage Access
Sec. 1116. Safe harbor for certain loans held on portfolio.
Subtitle E—Application of the Expedited Funds Availability Act
Sec. 1121. Application of the Expedited Funds Availability Act.
Subtitle F—Small Bank Holding Company Policy Statement
Sec. 1126. Changes required to small bank holding company policy statement on assessment of financial and managerial factors.
Subtitle G—Community Institution Mortgage Relief
Sec. 1131. Community financial institution mortgage relief.
Subtitle H—Financial Institutions Examination Fairness and Reform
Sec. 1136. Timeliness of examination reports.
Subtitle I—National Credit Union Administration Budget Transparency
Sec. 1141. Budget transparency for the NCUA.
Subtitle J—Taking Account of Institutions with Low Operation Risk
Sec. 1146. Regulations appropriate to business models.
Subtitle K—Federal Savings Association Charter Flexibility
Sec. 1151. Option for Federal savings associations to operate as a covered savings association.
Subtitle L—SAFE Transitional Licensing
Sec. 1156. Eliminating barriers to jobs for loan originators.
Subtitle M—Right to Lend
Sec. 1161. Small business loan data collection requirement.
Subtitle N—Community Bank Reporting Relief
Sec. 1166. Short form call report.
Subtitle O—Homeowner Information Privacy Protection
Sec. 1171. Study regarding privacy of information collected under the Home Mortgage Disclosure Act of 1975.
Subtitle P—Home Mortgage Disclosure Adjustment
Sec. 1176. Depository institutions subject to maintenance of records and disclosure requirements.
Subtitle Q—National Credit Union Administration Advisory Council
Sec. 1181. Credit Union Advisory Council.
Subtitle R—Credit Union Examination Reform
Sec. 1186. Extension of examination cycle of the National Credit Union Administration to 18 months or longer.
Subtitle S—NCUA Overhead Transparency
Sec. 1191. Fund transparency.
Regulatory Relief for Strongly Capitalized, Well Managed Banking Organizations
Capital election
In general
A banking organization may make an election under this section to be treated as a qualifying banking organization for purposes of the regulatory relief described under section 102.
Requirements
A banking organization may qualify to be treated as a qualifying banking organization if—
the banking organization has an average leverage ratio of at least 10 percent;
with respect to a banking organization that is an insured depository institution or insured credit union, the institution received a CAMELS composite rating of 1 or 2 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system) as of the most recent examination of the institution;
with respect to a depository institution holding company, each insured depository institution subsidiary of the holding company simultaneously makes the election described under subsection (a); and
with respect to an insured depository institution, any parent depository institution holding company of the institution simultaneously makes the election described under subsection (a).
Election process
To make an election under this section, a banking organization shall submit an election to the appropriate Federal banking agency (and any applicable State bank supervisor that regulates the banking organization) containing—
a notice of such election;
the banking organization’s average leverage ratio, as well as the organization’s quarterly leverage ratio for each of the most recently completed four calendar quarters;
if the banking organization is a depository institution holding company, the information described under paragraph (2) for each of the organization’s insured depository institution subsidiaries; and
if the banking organization is an insured depository institution, the information described under paragraph (2) for any parent depository institution holding company of the institution.
Effective date of election
In general
An election made under this section shall take effect at the end of the 30-day period beginning on the date that the appropriate Federal banking agency receives the application described under subsection (c), unless the appropriate Federal banking agency determines that the banking organization has not met the requirements described under subsection (b).
Notice of failure to meet requirements
If the appropriate Federal banking agency determines that a banking organization submitting an election notice under subsection (c) does not meet the requirements described under subsection (b), the agency shall—
notify the banking organization (and any applicable State bank supervisor that regulates the banking organization), in writing, of such determination as soon as possible after such determination is made, but in no case later than the end of the 30-day period beginning on the date that the appropriate Federal banking agency receives the election; and
include in such notification the specific reasons for such determination and steps that the banking organization can take to meet such requirements.
Treatment of certain new banking organizations
In the case of a banking organization that is a newly-chartered insured depository institution or a banking organization that becomes a banking organization because it controls a newly-chartered insured depository institution, such banking organization may be treated as a qualifying banking organization immediately upon becoming a banking organization, if—
an election to be treated as a qualifying banking organization was included in the application filed with the appropriate Federal banking agency in connection with becoming a banking organization; and
as of the date the banking organization becomes a banking organization, the banking organization’s tangible equity divided by the banking organization’s leverage exposure, expressed as a percentage, is at least 10 percent.
Failure to maintain quarterly leverage ratio and loss of election
Effect of failure to maintain quarterly leverage ratio
In general
If, with respect to the most recently completed calendar quarter, the appropriate Federal banking agency determines that a qualifying banking organization’s quarterly leverage ratio is below 10 percent—
the appropriate Federal banking agency shall notify the qualifying banking organization and any applicable State bank supervisor that regulates the banking organization of such determination;
the appropriate Federal banking agency may prohibit the banking organization from making a capital distribution; and
the banking organization shall, within 3 months of the first such determination, submit a capital restoration plan to the appropriate Federal banking agency.
Loss of election after one-year remediation period
If a banking organization described under subparagraph (A) does not, within the 1-year period beginning on the date of such determination, raise the organization’s quarterly leverage ratio for a calendar quarter ending in such 1-year period to at least 10 percent, the banking organization’s election under this section shall be terminated, and the appropriate Federal banking agency shall notify any applicable State bank supervisor that regulates the banking organization of such termination.
Effect of subsidiary on parent organization
With respect to a qualifying banking organization described under subparagraph (A) that is an insured depository institution, any parent depository institution holding company of the qualifying banking organization shall—
if the appropriate Federal banking agency determines it appropriate, be prohibited from making a capital distribution (other than a capital contribution to such qualifying banking organization described under subparagraph (A)); and
if the qualifying banking organization has an election terminated under subparagraph (B), any such parent depository institution holding company shall also have its election under this section terminated.
Immediate loss of election if the quarterly leverage ratio falls below 6 percent
In general
If, with respect to the most recently completed calendar quarter, the appropriate Federal banking agency determines that a qualifying banking organization’s quarterly leverage ratio is below 6 percent, the banking organization’s election under this section shall be terminated, and the appropriate Federal banking agency shall notify any applicable State bank supervisor that regulates the banking organization of such termination.
Effect of subsidiary on parent organization
With respect to a qualifying banking organization described under subparagraph (A) that is an insured depository institution, any parent depository institution holding company of the qualifying banking organization shall also have its election under this section terminated.
Ability to make future elections
If a banking organization has an election under this section terminated, the banking organization may not apply for another election under this section until the banking organization has maintained a quarterly leverage ratio of at least 10 percent for 8 consecutive calendar quarters.
Regulatory relief
In general
A qualifying banking organization shall be exempt from the following:
Any Federal law, rule, or regulation addressing capital or liquidity requirements or standards.
Any Federal law, rule, or regulation that permits an appropriate Federal banking agency to object to a capital distribution.
Any consideration by an appropriate Federal banking agency of the following:
Any risk the qualifying banking organization may pose to the stability of the financial system of the United States
, under section 5(c)(2) of the Bank Holding Company Act of 1956.
The extent to which a proposed acquisition, merger, or consolidation would result in greater or more concentrated risks to the stability of the United States banking or financial system
, under section 3(c)(7) of the Bank Holding Company Act of 1956, so long as the banking organization, after such proposed acquisition, merger, or consolidation, would maintain a quarterly leverage ratio of at least 10 percent.
Whether the performance of an activity by the banking organization could possibly pose a risk to the stability of the United States banking or financial system
, under section 4(j)(2)(A) of the Bank Holding Company Act of 1956.
Whether the acquisition of control of shares of a company engaged in an activity described in section 4(j)(1)(A) of the Bank Holding Company Act of 1956 could possibly pose a risk to the stability of the United States banking or financial system
, under section 4(j)(2)(A) of the Bank Holding Company Act of 1956, so long as the banking organization, after acquiring control of such company, would maintain a quarterly leverage ratio of at least 10 percent.
Whether a merger would pose a risk to the stability of the United States banking or financial system
, under section 18(c)(5) of the Federal Deposit Insurance Act, so long as the banking organization, after such proposed merger, would maintain a quarterly leverage ratio of at least 10 percent.
Any risk the qualifying banking organization may pose to the stability of the financial system of the United States
, under section 10(b)(4) of the Home Owners' Loan Act.
Subsections (i)(8) and (k)(6)(B)(ii) of section 4 and section 14 of the Bank Holding Company Act of 1956.
Section 18(c)(13) of the Federal Deposit Insurance Act.
Section 163 of the Financial Stability Act of 2010.
Section 10(e)(2)(E) of the Home Owners’ Loan Act.
Any Federal law, rule, or regulation implementing standards of the type provided for in subsections (b), (c), (d), (e), (g), (h), (i), and (j) of section 165 of the Financial Stability Act of 2010.
Any Federal law, rule, or regulation providing limitations on mergers, consolidations, or acquisitions of assets or control, to the extent such limitations relate to capital or liquidity standards or concentrations of deposits or assets, so long as the banking organization, after such proposed merger, consolidation, or acquisition, would maintain a quarterly leverage ratio of at least 10 percent.
Stress test exception
Notwithstanding subsection (a), other than paragraph (2) of subsection (a), the appropriate Federal banking agencies may conduct stress tests of qualifying banking organizations. A qualifying banking organization with total consolidated assets of more than $10,000,000,000 and less than $50,000,000,000 shall not be required to conduct annual stress tests required under section 165(i)(2)(A) of the Financial Stability Act of 2010.
Qualifying banking organizations treated as well capitalized
A qualifying banking organization shall be deemed to be well capitalized
for purposes of—
section 216 of the Federal Credit Union Act; and
sections 29, 38, 44, and 46 of the Federal Deposit Insurance Act.
Treatment of certain risk-weighted asset requirements for qualifying banking organizations
Acquisition size criteria treatment
A qualifying banking organization shall be deemed to meet the criteria described under section 4(j)(4)(D) of the Bank Holding Company Act of 1956, so long as after the proposed transaction the acquiring qualifying banking organization would maintain a quarterly leverage ratio of at least 10 percent.
Use of leverage exposure
With respect to a qualifying banking organization, in determining whether a proposal qualifies with the criteria described under subparagraphs (A)(iii) and (B)(i) of section 4(j)(4) of the Bank Holding Company Act of 1956, the Board of Governors of the Federal Reserve System shall consider the leverage exposure of an insured depository institution instead of the total risk-weighted assets of such institution.
Contingent capital study
Study
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency shall each carry out a study, which shall include holding public hearings, on how to design a requirement that banking organizations issue contingent capital with a market-based conversion trigger.
Report
Not later than the end of the 1-year period beginning on the date of the enactment of this Act, each agency described under subsection (a) shall submit a report to the Congress containing—
all findings and determinations made by the agency in carrying out the study required under subsection (a); and
the agency’s recommendations on how the Congress should design a requirement that banking organizations issue contingent capital with a market-based conversion trigger.
Study on altering the current prompt corrective action rules
Study
The Comptroller General of the United States shall conduct a study to assess the benefits and feasibility of altering the current prompt corrective action rules and replacing the Basel-based capital ratios with the nonperforming asset coverage ratio or NACR as the trigger for specific required supervisory interventions. The Comptroller General shall ensure that such study includes the following:
An assessment of the performance of an NACR forward-looking measure of a banking organization’s solvency condition relative to the regulatory capital ratios currently used by prompt corrective action rules.
An analysis of the performance of alternative definitions of nonperforming assets.
An assessment of the impact of two alternative intervention thresholds:
An initial (high) intervention threshold, below which appropriate Federal banking agency examiners are required to intervene and assess a banking organization’s condition and prescribe remedial measures.
A lower threshold, below which banking organizations must increase their capital, seek an acquirer, or face mandatory resolution within 90 days.
Report
Not later than the end of the 1-year period beginning on the date of the enactment of this Act, the Comptroller General shall submit a report to the Congress containing—
all findings and determinations made in carrying out the study required under subsection (a); and
recommendations on the most suitable definition of nonperforming assets, as well as the two numerical thresholds that trigger specific required supervisory interventions.
Definitions
For purposes of this title:
Appropriate Federal banking agency
The term appropriate Federal banking agency
—
has the meaning given such term under section 3 of the Federal Deposit Insurance Act; and
means the National Credit Union Administration, in the case of an insured credit union.
Banking organization
The term banking organization
means—
an insured depository institution;
an insured credit union;
a depository institution holding company;
a company that is treated as a bank holding company for purposes of section 8 of the International Banking Act; and
a U.S. intermediate holding company established by a foreign banking organization pursuant to section 252.153 of title 12, Code of Federal Regulations.
Foreign exchange swap
The term foreign exchange swap
has the meaning given that term under section 1a of the Commodity Exchange Act.
Insured credit union
The term insured credit union
has the meaning given that term under section 101 of the Federal Credit Union Act.
Leverage exposure
The term leverage exposure
—
with respect to a banking organization other than a credit union or a traditional banking organization, has the meaning given the term total leverage exposure
under section 3.10(c)(4)(ii), 217.10(c)(4), or 324.10(c)(4) of title 12, Code of Federal Regulations, as applicable, as in effect on January 1, 2015;
with respect to a traditional banking organization other than a credit union, means total assets (minus any items deducted from common equity tier 1 capital) as calculated in accordance with generally accepted accounting principles and as reported on the traditional banking organization’s applicable regulatory filing with the banking organization’s appropriate Federal banking agency; and
with respect to a banking organization that is a credit union, has the meaning given the term total assets
under section 702.2 of title 12, Code of Federal Regulations, as in effect on January 1, 2015.
Leverage ratio definitions
Average leverage ratio
With respect to a banking organization, the term average leverage ratio
means the average of the banking organization’s quarterly leverage ratios for each of the most recently completed four calendar quarters.
Quarterly leverage ratio
With respect to a banking organization and a calendar quarter, the term quarterly leverage ratio
means the organization’s tangible equity divided by the organization’s leverage exposure, expressed as a percentage, on the last day of such quarter.
NACR
The term NACR
means—
book equity less nonperforming assets plus loan loss reserves, divided by
total banking organization assets.
Nonperforming assets
The term nonperforming assets
means—
20 percent of assets that are past due 30 to 89 days, plus
50 percent of assets that are past due 90 days or more, plus
100 percent of nonaccrual assets and other real estate owned.
Qualifying banking organization
The term qualifying banking organization
means a banking organization that has made an election under section 101 and with respect to which such election is in effect.
Security-based swap
The term security-based swap
has the meaning given that term under section 3 of the Securities Exchange Act of 1934.
Swap
The term swap
has the meaning given that term under section 1a of the Commodity Exchange Act.
Tangible equity
The term tangible equity
—
with respect to a banking organization other than a credit union, means the sum of—
common equity tier 1 capital;
additional tier 1 capital consisting of instruments issued on or before June 1, 2016; and
with respect to a depository institution holding company that had less than $15,000,000,000 in total consolidated assets as of December 31, 2009, or March 31, 2010, or a banking organization that was a mutual holding company as of May 19, 2010, trust preferred securities issued prior to May 19, 2010, to the extent such organization was permitted, as of the date of the enactment of this Act, to consider such securities as tier 1 capital under existing regulations of the appropriate Federal banking agency; and
with respect to a banking organization that is a credit union, has the meaning given the term net worth
under section 702.2 of title 12, Code of Federal Regulations, as in effect on January 1, 2015.
Traditional banking organization
The term traditional banking organization
means a banking organization that—
has zero trading assets and zero trading liabilities;
does not engage in swaps or security-based swaps, other than swaps or security-based swaps referencing interest rates or foreign exchange swaps; and
has a total notional exposure of swaps and security-based swaps of not more than $8,000,000,000.
Other banking terms
The terms insured depository institution
and depository institution holding company
have the meaning given those terms, respectively, under section 3 of the Federal Deposit Insurance Act.
Other capital terms
With respect to a banking organization, the terms additional tier 1 capital
and common equity tier 1 capital
have the meaning given such terms, respectively, under section 3.20, 217.20, or 324.20 of title 12, Code of Federal Regulations, as applicable, as in effect on January 1, 2015.
Ending Too Big to Fail
and Bank Bailouts
Reform of the Financial Stability Act of 2010
Repeal and modification of provisions of the Financial Stability Act of 2010
Repeals
The following provisions of the Financial Stability Act of 2010 are repealed, and the provisions of law amended or repealed by such provisions are restored or revived as if such provisions had not been enacted:
Subtitle B.
Section 113.
Section 114.
Section 115.
Section 116.
Section 117.
Section 119.
Section 120.
Section 121.
Section 161.
Section 162.
Section 164.
Section 166.
Section 167.
Section 168.
Section 170.
Section 172.
Section 174.
Section 175.
Additional modifications
The Financial Stability Act of 2010 (12 U.S.C. 5311 et seq.) is amended—
in section 102(a), by striking paragraph (5);
in section 111—
in subsection (b)—
in paragraph (1)—
by striking who shall each
and inserting who shall, except as provided below, each
; and
by amending subparagraphs (B) through (I) to read as follows:
each member of the Board of Governors, who shall collectively have 1 vote on the Council;
each member of the Board of Directors of the Office of the Comptroller of the Currency, who shall collectively have 1 vote on the Council;
each member of the Consumer Financial Opportunity Commission, who shall collectively have 1 vote on the Council;
each member of the Commission, who shall collectively have 1 vote on the Council;
each member of the Corporation, who shall collectively have 1 vote on the Council;
each member of the Commodity Futures Trading Commission, who shall collectively have 1 vote on the Council;
each member of the Board of Directors of the Federal Housing Finance Agency, who shall collectively have 1 vote on the Council
each member of the National Credit Union Administration Board, who shall collectively have 1 vote on the Council;
;
in paragraph (2)—
by striking subparagraph (A); and
by redesignating subparagraphs (B), (C), (D), and (E) as subparagraphs (A), (B), (C), and (D), respectively; and
by adding at the end the following:
Voting by multi-person entity
Voting within the entity
An entity described under subparagraph (B) through (I) of paragraph (1) shall determine the entity’s Council vote by using the voting process normally applicable to votes by the entity’s members.
Casting of entity vote
The 1 collective Council vote of an entity described under subparagraph (A) shall be cast by the head of such agency or, in the event such head is unable to cast such vote, the next most senior member of the entity available.
;
in subsection (c), by striking subparagraphs (C), (D), and (E)
and inserting subparagraphs (B), (C), and (D)
;
in subsection (e), by adding at the end the following:
Staff access
Any member of the Council may select to have one or more individuals on the member’s staff attend a meeting of the Council, including any meeting of representatives of the member agencies other than the members themselves.
Congressional oversight
All meetings of the Council, whether or not open to the public, shall be open to the attendance by members of the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate.
Member agency meetings
Any meeting of representatives of the member agencies other than the members themselves shall be open to attendance by staff of the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate.
;
by striking subsection (g) (relating to the nonapplicability of FACA); and
by inserting after subsection (f) the following:
Open meeting requirement
The Council shall be an agency for purposes of section 552b of title 5, United States Code (commonly referred to as the Government in the Sunshine Act
).
Confidential congressional briefings
At the request of the Chairman of the Committee on Financial Services of the House of Representatives or the Chairman of the Committee on Banking, Housing, and Urban Affairs of the Senate, the Chairperson shall appear before Congress to provide a confidential briefing.
;
in section 112—
in subsection (a)(2)—
in subparagraph (A), by striking direct the Office of Financial Research to
;
by striking subparagraphs (B), (H), (I), and (J);
by redesignating subparagraphs (C), (D), (E), (F), (G), (K), (L), (M), and (N) as subparagraphs (B), (C), (D), (E), (F), (G), (H), (I), and (J), respectively;
in subparagraph (J), as so redesignated—
in clause (iii), by adding and
at the end; and
by striking clauses (iv) and (v);
in subsection (d)—
in paragraph (1), by striking the Office of Financial Research, member agencies, and
and inserting member agencies and
;
in paragraph (2), by striking the Office of Financial Research, any member agency, and
and inserting any member agency and
;
in paragraph (3)—
by striking , acting through the Office of Financial Research,
each place it appears; and
in subparagraph (B), by striking the Office of Financial Research or
; and
in paragraph (5)(A), by striking , the Office of Financial Research,
;
by amending section 118 to read as follows:
Council funding
There is authorized to be appropriated to the Council $4,000,000 for fiscal year 2017 and each fiscal year thereafter to carry out the duties of the Council.
;
in section 163(b)(4)—
by striking In addition
and inserting the following:
In general
In addition
; and
by adding at the end the following:
Exception for qualifying banking organization
Subparagraph (A) shall not apply to a proposed acquisition by a qualifying banking organization, as defined under section 105 of the Financial CHOICE Act of 2016.
; and
in section 165—
by striking nonbank financial companies supervised by the Board of Governors and
each place such term appears;
by striking nonbank financial company supervised by the Board of Governors and
each place such term appears;
in subsection (a), by amending paragraph (2) to read as follows:
Tailored application
In prescribing more stringent prudential standards under this section, the Board of Governors may differentiate among companies on an individual basis or by category, taking into consideration their capital structure, riskiness, complexity, financial activities (including the financial activities of their subsidiaries), size, and any other risk-related factors that the Board of Governors deems appropriate.
;
in subsection (b)—
in paragraph (1)(B)(iv), by striking , on its own or pursuant to a recommendation made by the Council in accordance with section 115,
;
in paragraph (2)—
by striking foreign nonbank financial company supervised by the Board of Governors or
;
by striking shall—
and all that follows through give due
and inserting shall give due
;
in subparagraph (A), by striking ; and
and inserting a period; and
by striking subparagraph (B);
in paragraph (3)—
in subparagraph (A)—
by striking clause (i);
by redesignating clauses (ii), (iii), and (iv) as clauses (i), (ii), and (iii), respectively; and
in clause (iii), as so redesignated, by adding and
at the end;
by striking subparagraphs (B) and (C); and
by redesignating subparagraph (D) as subparagraph (B); and
in paragraph (4), by striking a nonbank financial company supervised by the Board of Governors or
;
in subsection (c)—
in paragraph (1), by striking under section 115(c)
; and
in paragraph (2)—
by amending subparagraph (A) to read as follows:
any recommendations of the Council;
; and
in subparagraph (D), by striking nonbank financial company supervised by the Board of Governors or
;
in subsection (d)—
by striking a nonbank financial company supervised by the Board of Governors or
each place such term appears;
in paragraph (1), by striking periodically
and inserting not more often than every 2 years
;
in paragraph (3)—
by striking The Board
and inserting the following:
In general
The Board
;
by striking shall review
and inserting the following:
shall—
review
;
by striking the period and inserting ; and
; and
by adding at the end the following:
not later than the end of the 6-month period beginning on the date the bank holding company submits the resolution plan, provide feedback to the bank holding company on such plan.
Disclosure of assessment framework
The Board of Governors and the Corporation shall each publicly disclose the assessment framework that is used to review information under this paragraph and shall provide the public with a notice and comment period before finalizing such assessment framework.
.
in paragraph (6), by striking nonbank financial company supervised by the Board, any bank holding company,
and inserting bank holding company
;
in subsection (e)—
in paragraph (1), by striking a nonbank financial company supervised by the Board of Governors or
;
in paragraph (3), by striking nonbank financial company supervised by the Board of Governors or
each place such term appears; and
in paragraph (4), by striking a nonbank financial company supervised by the Board of Governors or
;
in subsection (g)(1), by striking and any nonbank financial company supervised by the Board of Governors
;
in subsection (h)—
by striking paragraph (1);
by redesignating paragraphs (2), (3), and (4) as paragraphs (1), (2), and (3), respectively;
in paragraph (1), as so redesignated, by striking paragraph (3)
each place such term appears and inserting paragraph (2)
; and
in paragraph (2), as so redesignated, by striking nonbank financial company supervised by the Board of Governors or
each place such term appears;
in subsection (i)—
in paragraph (1)—
in subparagraph (B)—
by amending clause (i) to read as follows:
shall—
issue regulations, after providing for public notice and comment, that provide for at least 3 different sets of conditions under which the evaluation required by this subsection shall be conducted, including baseline, adverse, and severely adverse, and methodologies, including models used to estimate losses on certain assets; and
provide copies of such regulations to the Comptroller General of the United States and the Panel of Economic Advisors of the Congressional Budget Office before publishing such regulations;
;
in clause (ii), by striking and nonbank financial companies
; and
in clause (v), by inserting before the period the following: , including any results of a resubmitted test
; and
by adding at the end the following:
Application to CCAR
The requirements of subparagraph (B) shall apply to all stress tests performed under the Comprehensive Capital Analysis and Review exercise established by the Board of Governors.
; and
in paragraph (2)(A)—
by striking a bank holding company
and inserting bank holding company
; and
by striking All other financial companies
and inserting All other bank holding companies
;
in subsection (j)—
in paragraph (1), by striking or a nonbank financial company supervised by the Board of Governors
; and
in paragraph (2), by striking the factors described in subsections (a) and (b) of section 113 and any other
and inserting any
;
in subsection (k)(1), by striking or nonbank financial company supervised by the Board of Governors
; and
by adding at the end the following:
Exemption for qualifying banking organizations
This section shall not apply to a proposed acquisition by a qualifying banking organization, as defined under section 105 of the Financial CHOICE Act of 2016.
.
Actions to create a bank holding company
Section 3(b)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(b)(1)) is amended—
by striking Upon receiving
and inserting the following:
In general
Upon receiving
;
by striking Notwithstanding any other provision
and inserting the following:
Immediate action
In general
Notwithstanding any other provision
; and
by adding at the end the following:
Exception
The Board may not take any action pursuant to clause (i) on an application that would cause any company to become a bank holding company unless such application involves the company acquiring a bank that is critically undercapitalized (as such term is defined under section 38(b) of the Federal Deposit Insurance Act).
.
Concentration limits applied only to banking organizations
Section 14 of the Bank Holding Company Act of 1956 (12 U.S.C. 1852) is amended—
by striking financial company
each place such term appears and inserting banking organization
;
in subsection (a)—
by amending paragraph (2) to read as follows:
the term banking organization
means—
an insured depository institution;
a bank holding company;
a savings and loan holding company;
a company that controls an insured depository institution; and
a foreign bank or company that is treated as a bank holding company for purposes of this Act; and
;
in paragraph (3)—
in subparagraph (A)(ii), by adding and
at the end;
in subparagraph (B)(ii), by striking ; and
and inserting a period; and
by striking subparagraph (C); and
in subsection (b), by striking financial companies
and inserting banking organizations
.
Conforming amendment
Section 3502(5) of title 44, United States Code, is amended by striking the Office of Financial Research,
.
Clerical amendment
The table of contents under section 1(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by striking the items relating to subtitle B of title I and 113, 114, 115, 116, 117, 119, 120, 121, 161, 162, 164, 166, 167, 168, 170, 172, 174, and 175.
Repeal of the Orderly Liquidation Authority
Repeal of the orderly liquidation authority
In general
Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act is hereby repealed and any Federal law amended by such title shall, on and after the effective date of this Act, be effective as if title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act had not been enacted.
Conforming amendments
Dodd-Frank Wall Street Reform and Consumer Protection Act
The Dodd-Frank Wall Street Reform and Consumer Protection Act is amended—
in the table of contents for such Act, by striking all items relating to title II;
in section 151, by amending paragraph (2) to read as follows:
the term financial company
means—
any company that is incorporated or organized under any provision of Federal law or the laws of any State;
any company that is—
a bank holding company, as defined in section 2(a) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(a));
a nonbank financial company supervised by the Board of Governors;
any company that is predominantly engaged in activities that the Board of Governors has determined are financial in nature or incidental thereto for purposes of section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) other than a company described in clause (i) or (ii); or
any subsidiary of any company described in any of clauses (i) through (iii) that is predominantly engaged in activities that the Board of Governors has determined are financial in nature or incidental thereto for purposes of section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) (other than a subsidiary that is an insured depository institution or an insurance company);
any company 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.), a governmental entity, or a regulated entity, as defined under section 1303(20) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4502(20)); and
includes an insured depository institution and an insurance company;
;
in section 165(d)(6), by striking , a receiver appointed under title II,
; and
in section 716(g), by striking or a covered financial company under title II
.
Federal Deposit Insurance Act
Section 10(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)) is amended by striking , or of such nonbank financial company supervised by the Board of Governors or bank holding company described in section 165(a) of the Financial Stability Act of 2010, for the purpose of implementing its authority to provide for orderly liquidation of any such company under title II of that Act
.
Federal Reserve Act
Section 13(3) of the Federal Reserve Act is amended—
in subparagraph (B)—
in clause (ii), by striking , resolution under title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or
and inserting or is subject to resolution under
; and
in clause (iii), by striking , resolution under title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or
and inserting or resolution under
; and
by striking subparagraph (E).
Financial Institution Bankruptcy
General provisions relating to covered financial corporations
Definition
Section 101 of title 11, United States Code, is amended by inserting the following after paragraph (9):
The term covered financial corporation means any corporation incorporated or organized under any Federal or State law, other than a stockbroker, a commodity broker, or an entity of the kind specified in paragraph (2) or (3) of section 109(b), that is—
a bank holding company, as defined in section 2(a) of the Bank Holding Company Act of 1956; or
a corporation that exists for the primary purpose of owning, controlling and financing its subsidiaries, that has total consolidated assets of $50,000,000,000 or greater, and for which, in its most recently completed fiscal year—
annual gross revenues derived by the corporation and all of its subsidiaries from activities that are financial in nature (as defined in section 4(k) of the Bank Holding Company Act of 1956) and, if applicable, from the ownership or control of one or more insured depository institutions, represents 85 percent or more of the consolidated annual gross revenues of the corporation; or
the consolidated assets of the corporation and all of its subsidiaries related to activities that are financial in nature (as defined in section 4(k) of the Bank Holding Company Act of 1956) and, if applicable, related to the ownership or control of one or more insured depository institutions, represents 85 percent or more of the consolidated assets of the corporation.
.
Applicability of chapters
Section 103 of title 11, United States Code, is amended by adding at the end the following:
Subchapter V of chapter 11 of this title applies only in a case under chapter 11 concerning a covered financial corporation.
.
Who may be a debtor
Section 109 of title 11, United States Code, is amended—
in subsection (b)—
in paragraph (2), by striking or
at the end;
in paragraph (3)(B), by striking the period at the end and inserting ; or
; and
by adding at the end the following:
a covered financial corporation.
; and
in subsection (d)—
by striking and
before an uninsured State member bank
;
by striking or
before a corporation
; and
by inserting , or a covered financial corporation
after Federal Deposit Insurance Corporation Improvement Act of 1991
.
Conversion to chapter 7
Section 1112 of title 11, United States Code, is amended by adding at the end the following:
Notwithstanding section 109(b), the court may convert a case under subchapter V to a case under chapter 7 if—
a transfer approved under section 1185 has been consummated;
the court has ordered the appointment of a special trustee under section 1186; and
the court finds, after notice and a hearing, that conversion is in the best interest of the creditors and the estate.
.
Section 726(a)(1) of title 11, United States Code, is amended by inserting after first,
the following: in payment of any unpaid fees, costs, and expenses of a special trustee appointed under section 1186, and then
.
Section 1129(a) of title 11, United States Code, is amended by inserting after paragraph (16) the following:
In a case under subchapter V, all payable fees, costs, and expenses of the special trustee have been paid or the plan provides for the payment of all such fees, costs, and expenses on the effective date of the plan.
In a case under subchapter V, confirmation of the plan is not likely to cause serious adverse effects on financial stability in the United States.
.
Section 322(b)(2) of title 11, United States Code, is amended by striking The
and inserting In cases under subchapter V, the United States trustee shall recommend to the court, and in all other cases, the
.
Liquidation, reorganization, or recapitalization of a covered financial corporation
Chapter 11 of title 11, United States Code, is amended by adding at the end the following:
Liquidation, Reorganization, or Recapitalization of a Covered Financial Corporation
Inapplicability of other sections
Sections 303 and 321(c) do not apply in a case under this subchapter concerning a covered financial corporation. Section 365 does not apply to a transfer under section 1185, 1187, or 1188.
Definitions for this subchapter
In this subchapter, the following definitions shall apply:
The term Board
means the Board of Governors of the Federal Reserve System.
The term bridge company
means a newly formed corporation to which property of the estate may be transferred under section 1185(a) and the equity securities of which may be transferred to a special trustee under section 1186(a).
The term capital structure debt
means all unsecured debt of the debtor for borrowed money for which the debtor is the primary obligor, other than a qualified financial contract and other than debt secured by a lien on property of the estate that is to be transferred to a bridge company pursuant to an order of the court under section 1185(a).
The term contractual right
means a contractual right of a kind defined in section 555, 556, 559, 560, or 561.
The term qualified financial contract
means any contract of a kind defined in paragraph (25), (38A), (47), or (53B) of section 101, section 741(7), or paragraph (4), (5), (11), or (13) of section 761.
The term special trustee
means the trustee of a trust formed under section 1186(a)(1).
Commencement of a case concerning a covered financial corporation
A case under this subchapter concerning a covered financial corporation may be commenced by the filing of a petition with the court by the debtor under section 301 only if the debtor states to the best of its knowledge under penalty of perjury in the petition that it is a covered financial corporation.
The commencement of a case under subsection (a) constitutes an order for relief under this subchapter.
The members of the board of directors (or body performing similar functions) of a covered financial company shall have no liability to shareholders, creditors, or other parties in interest for a good faith filing of a petition to commence a case under this subchapter, or for any reasonable action taken in good faith in contemplation of or in connection with such a petition or a transfer under section 1185 or section 1186, whether prior to or after commencement of the case.
Counsel to the debtor shall provide, to the greatest extent practicable without disclosing the identity of the potential debtor, sufficient confidential notice to the chief judge of the court of appeals for the circuit embracing the district in which such counsel intends to file a petition to commence a case under this subchapter regarding the potential commencement of such case. The chief judge of such court shall randomly assign to preside over such case a bankruptcy judge selected from among the bankruptcy judges designated by the Chief Justice of the United States under section 298 of title 28.
Regulators
The Board, the Securities Exchange Commission, the Office of the Comptroller of the Currency of the Department of the Treasury, the Commodity Futures Trading Commission, and the Federal Deposit Insurance Corporation may raise and may appear and be heard on any issue in any case or proceeding under this subchapter.
Special transfer of property of the estate
On request of the trustee, and after notice and a hearing that shall occur not less than 24 hours after the order for relief, the court may order a transfer under this section of property of the estate, and the assignment of executory contracts, unexpired leases, and qualified financial contracts of the debtor, to a bridge company. Upon the entry of an order approving such transfer, any property transferred, and any executory contracts, unexpired leases, and qualified financial contracts assigned under such order shall no longer be property of the estate. Except as provided under this section, the provisions of section 363 shall apply to a transfer and assignment under this section.
Unless the court orders otherwise, notice of a request for an order under subsection (a) shall consist of electronic or telephonic notice of not less than 24 hours to—
the debtor;
the holders of the 20 largest secured claims against the debtor;
the holders of the 20 largest unsecured claims against the debtor;
counterparties to any debt, executory contract, unexpired lease, and qualified financial contract requested to be transferred under this section;
the Board;
the Federal Deposit Insurance Corporation;
the Secretary of the Treasury and the Office of the Comptroller of the Currency of the Treasury;
the Commodity Futures Trading Commission;
the Securities and Exchange Commission;
the United States trustee or bankruptcy administrator; and
each primary financial regulatory agency, as defined in section 2(12) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, with respect to any affiliate the equity securities of which are proposed to be transferred under this section.
The court may not order a transfer under this section unless the court determines, based upon a preponderance of the evidence, that—
the transfer under this section is necessary to prevent serious adverse effects on financial stability in the United States;
the transfer does not provide for the assumption of any capital structure debt by the bridge company;
the transfer does not provide for the transfer to the bridge company of any property of the estate that is subject to a lien securing a debt, executory contract, unexpired lease or agreement (including a qualified financial contract) of the debtor unless—
the bridge company assumes such debt, executory contract, unexpired lease or agreement (including a qualified financial contract), including any claims arising in respect thereof that would not be allowed secured claims under section 506(a)(1) and after giving effect to such transfer, such property remains subject to the lien securing such debt, executory contract, unexpired lease or agreement (including a qualified financial contract); and
the court has determined that assumption of such debt, executory contract, unexpired lease or agreement (including a qualified financial contract) by the bridge company is in the best interests of the estate; or
such property is being transferred to the bridge company in accordance with the provisions of section 363;
the transfer does not provide for the assumption by the bridge company of any debt, executory contract, unexpired lease or agreement (including a qualified financial contract) of the debtor secured by a lien on property of the estate unless the transfer provides for such property to be transferred to the bridge company in accordance with paragraph (3)(A) of this subsection;
the transfer does not provide for the transfer of the equity of the debtor;
the trustee has demonstrated that the bridge company is not likely to fail to meet the obligations of any debt, executory contract, qualified financial contract, or unexpired lease assumed and assigned to the bridge company;
the transfer provides for the transfer to a special trustee all of the equity securities in the bridge company and appointment of a special trustee in accordance with section 1186;
after giving effect to the transfer, adequate provision has been made for the fees, costs, and expenses of the estate and special trustee; and
the bridge company will have governing documents, and initial directors and senior officers, that are in the best interest of creditors and the estate.
Immediately before a transfer under this section, the bridge company that is the recipient of the transfer shall—
not have any property, executory contracts, unexpired leases, qualified financial contracts, or debts, other than any property acquired or executory contracts, unexpired leases, or debts assumed when acting as a transferee of a transfer under this section; and
have equity securities that are property of the estate, which may be sold or distributed in accordance with this title.
Special trustee
An order approving a transfer under section 1185 shall require the trustee to transfer to a qualified and independent special trustee, who is appointed by the court, all of the equity securities in the bridge company that is the recipient of a transfer under section 1185 to hold in trust for the sole benefit of the estate, subject to satisfaction of the special trustee’s fees, costs, and expenses. The trust of which the special trustee is the trustee shall be a newly formed trust governed by a trust agreement approved by the court as in the best interests of the estate, and shall exist for the sole purpose of holding and administering, and shall be permitted to dispose of, the equity securities of the bridge company in accordance with the trust agreement.
In connection with the hearing to approve a transfer under section 1185, the trustee shall confirm to the court that the Board has been consulted regarding the identity of the proposed special trustee and advise the court of the results of such consultation.
The trust agreement governing the trust shall provide—
for the payment of the fees, costs, expenses, and indemnities of the special trustee from the assets of the debtor’s estate;
that the special trustee provide—
quarterly reporting to the estate, which shall be filed with the court; and
information about the bridge company reasonably requested by a party in interest to prepare a disclosure statement for a plan providing for distribution of any securities of the bridge company if such information is necessary to prepare such disclosure statement;
that for as long as the equity securities of the bridge company are held by the trust, the special trustee shall file a notice with the court in connection with—
any change in a director or senior officer of the bridge company;
any modification to the governing documents of the bridge company; and
any material corporate action of the bridge company, including—
recapitalization;
a material borrowing;
termination of an intercompany debt or guarantee;
a transfer of a substantial portion of the assets of the bridge company; or
the issuance or sale of any securities of the bridge company;
that any sale of any equity securities of the bridge company shall not be consummated until the special trustee consults with the Federal Deposit Insurance Corporation and the Board regarding such sale and discloses the results of such consultation with the court;
that, subject to reserves for payments permitted under paragraph (1) provided for in the trust agreement, the proceeds of the sale of any equity securities of the bridge company by the special trustee be held in trust for the benefit of or transferred to the estate;
the process and guidelines for the replacement of the special trustee; and
that the property held in trust by the special trustee is subject to distribution in accordance with subsection (c).
The special trustee shall distribute the assets held in trust—
if the court confirms a plan in the case, in accordance with the plan on the effective date of the plan; or
if the case is converted to a case under chapter 7, as ordered by the court.
As soon as practicable after a final distribution under paragraph (1), the office of the special trustee shall terminate, except as may be necessary to wind up and conclude the business and financial affairs of the trust.
After a transfer to the special trustee under this section, the special trustee shall be subject only to applicable nonbankruptcy law, and the actions and conduct of the special trustee shall no longer be subject to approval by the court in the case under this subchapter.
Temporary and supplemental automatic stay; assumed debt
A petition filed under section 1183 operates as a stay, applicable to all entities, of the termination, acceleration, or modification of any debt, contract, lease, or agreement of the kind described in paragraph (2), or of any right or obligation under any such debt, contract, lease, or agreement, solely because of—
a default by the debtor under any such debt, contract, lease, or agreement; or
a provision in such debt, contract, lease, or agreement, or in applicable nonbankruptcy law, that is conditioned on—
the insolvency or financial condition of the debtor at any time before the closing of the case;
the commencement of a case under this title concerning the debtor;
the appointment of or taking possession by a trustee in a case under this title concerning the debtor or by a custodian before the commencement of the case; or
a credit rating agency rating, or absence or withdrawal of a credit rating agency rating—
of the debtor at any time after the commencement of the case;
of an affiliate during the period from the commencement of the case until 48 hours after such order is entered;
of the bridge company while the trustee or the special trustee is a direct or indirect beneficial holder of more than 50 percent of the equity securities of—
the bridge company; or
the affiliate, if all of the direct or indirect interests in the affiliate that are property of the estate are transferred under section 1185; or
of an affiliate while the trustee or the special trustee is a direct or indirect beneficial holder of more than 50 percent of the equity securities of—
the bridge company; or
the affiliate, if all of the direct or indirect interests in the affiliate that are property of the estate are transferred under section 1185.
A debt, contract, lease, or agreement described in this paragraph is—
any debt (other than capital structure debt), executory contract, or unexpired lease of the debtor (other than a qualified financial contract);
any agreement under which the debtor issued or is obligated for debt (other than capital structure debt);
any debt, executory contract, or unexpired lease of an affiliate (other than a qualified financial contract); or
any agreement under which an affiliate issued or is obligated for debt.
The stay under this subsection terminates—
for the benefit of the debtor, upon the earliest of—
48 hours after the commencement of the case;
assumption of the debt, contract, lease, or agreement by the bridge company under an order authorizing a transfer under section 1185;
a final order of the court denying the request for a transfer under section 1185; or
the time the case is dismissed; and
for the benefit of an affiliate, upon the earliest of—
the entry of an order authorizing a transfer under section 1185 in which the direct or indirect interests in the affiliate that are property of the estate are not transferred under section 1185;
a final order by the court denying the request for a transfer under section 1185;
48 hours after the commencement of the case if the court has not ordered a transfer under section 1185; or
the time the case is dismissed.
Subsections (d), (e), (f), and (g) of section 362 apply to a stay under this subsection.
A debt, executory contract (other than a qualified financial contract), or unexpired lease of the debtor, or an agreement under which the debtor has issued or is obligated for any debt, may be assumed by a bridge company in a transfer under section 1185 notwithstanding any provision in an agreement or in applicable nonbankruptcy law that—
prohibits, restricts, or conditions the assignment of the debt, contract, lease, or agreement; or
accelerates, terminates, or modifies, or permits a party other than the debtor to terminate or modify, the debt, contract, lease, or agreement on account of—
the assignment of the debt, contract, lease, or agreement; or
a change in control of any party to the debt, contract, lease, or agreement.
A debt, contract, lease, or agreement of the kind described in subparagraph (A) or (B) of subsection (a)(2) may not be accelerated, terminated, or modified, and any right or obligation under such debt, contract, lease, or agreement may not be accelerated, terminated, or modified, as to the bridge company solely because of a provision in the debt, contract, lease, or agreement or in applicable nonbankruptcy law—
of the kind described in subsection (a)(1)(B) as applied to the debtor;
that prohibits, restricts, or conditions the assignment of the debt, contract, lease, or agreement; or
that accelerates, terminates, or modifies, or permits a party other than the debtor to terminate or modify, the debt, contract, lease or agreement on account of—
the assignment of the debt, contract, lease, or agreement; or
a change in control of any party to the debt, contract, lease, or agreement.
If there is a default by the debtor under a provision other than the kind described in paragraph (1) in a debt, contract, lease or agreement of the kind described in subparagraph (A) or (B) of subsection (a)(2), the bridge company may assume such debt, contract, lease, or agreement only if the bridge company—
shall cure the default;
compensates, or provides adequate assurance in connection with a transfer under section 1185 that the bridge company will promptly compensate, a party other than the debtor to the debt, contract, lease, or agreement, for any actual pecuniary loss to the party resulting from the default; and
provides adequate assurance in connection with a transfer under section 1185 of future performance under the debt, contract, lease, or agreement, as determined by the court under section 1185(c)(4).
Treatment of qualified financial contracts and affiliate contracts
Notwithstanding sections 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 362(o), 555, 556, 559, 560, and 561, a petition filed under section 1183 operates as a stay, during the period specified in section 1187(a)(3)(A), applicable to all entities, of the exercise of a contractual right—
to cause the modification, liquidation, termination, or acceleration of a qualified financial contract of the debtor or an affiliate;
to offset or net out any termination value, payment amount, or other transfer obligation arising under or in connection with a qualified financial contract of the debtor or an affiliate; or
under any security agreement or arrangement or other credit enhancement forming a part of or related to a qualified financial contract of the debtor or an affiliate.
During the period specified in section 1187(a)(3)(A), the trustee or the affiliate shall perform all payment and delivery obligations under such qualified financial contract of the debtor or the affiliate, as the case may be, that become due after the commencement of the case. The stay provided under subsection (a) terminates as to a qualified financial contract of the debtor or an affiliate immediately upon the failure of the trustee or the affiliate, as the case may be, to perform any such obligation during such period.
Any failure by a counterparty to any qualified financial contract of the debtor or any affiliate to perform any payment or delivery obligation under such qualified financial contract, including during the pendency of the stay provided under subsection (a), shall constitute a breach of such qualified financial contract by the counterparty.
Subject to the court’s approval, a qualified financial contract between an entity and the debtor may be assigned to or assumed by the bridge company in a transfer under, and in accordance with, section 1185 if and only if—
all qualified financial contracts between the entity and the debtor are assigned to and assumed by the bridge company in the transfer under section 1185;
all claims of the entity against the debtor in respect of any qualified financial contract between the entity and the debtor (other than any claim that, under the terms of the qualified financial contract, is subordinated to the claims of general unsecured creditors) are assigned to and assumed by the bridge company;
all claims of the debtor against the entity under any qualified financial contract between the entity and the debtor are assigned to and assumed by the bridge company; and
all property securing or any other credit enhancement furnished by the debtor for any qualified financial contract described in paragraph (1) or any claim described in paragraph (2) or (3) under any qualified financial contract between the entity and the debtor is assigned to and assumed by the bridge company.
Notwithstanding any provision of a qualified financial contract or of applicable nonbankruptcy law, a qualified financial contract of the debtor that is assumed or assigned in a transfer under section 1185 may not be accelerated, terminated, or modified, after the entry of the order approving a transfer under section 1185, and any right or obligation under the qualified financial contract may not be accelerated, terminated, or modified, after the entry of the order approving a transfer under section 1185 solely because of a condition described in section 1187(c)(1), other than a condition of the kind specified in section 1187(b) that occurs after property of the estate no longer includes a direct beneficial interest or an indirect beneficial interest through the special trustee, in more than 50 percent of the equity securities of the bridge company.
Notwithstanding any provision of any agreement or in applicable nonbankruptcy law, an agreement of an affiliate (including an executory contract, an unexpired lease, qualified financial contract, or an agreement under which the affiliate issued or is obligated for debt) and any right or obligation under such agreement may not be accelerated, terminated, or modified, solely because of a condition described in section 1187(c)(1), other than a condition of the kind specified in section 1187(b) that occurs after the bridge company is no longer a direct or indirect beneficial holder of more than 50 percent of the equity securities of the affiliate, at any time after the commencement of the case if—
all direct or indirect interests in the affiliate that are property of the estate are transferred under section 1185 to the bridge company within the period specified in subsection (a);
the bridge company assumes—
any guarantee or other credit enhancement issued by the debtor relating to the agreement of the affiliate; and
any obligations in respect of rights of setoff, netting arrangement, or debt of the debtor that directly arises out of or directly relates to the guarantee or credit enhancement; and
any property of the estate that directly serves as collateral for the guarantee or credit enhancement is transferred to the bridge company.
Licenses, permits, and registrations
Notwithstanding any otherwise applicable nonbankruptcy law, if a request is made under section 1185 for a transfer of property of the estate, any Federal, State, or local license, permit, or registration that the debtor or an affiliate had immediately before the commencement of the case and that is proposed to be transferred under section 1185 may not be accelerated, terminated, or modified at any time after the request solely on account of—
the insolvency or financial condition of the debtor at any time before the closing of the case;
the commencement of a case under this title concerning the debtor;
the appointment of or taking possession by a trustee in a case under this title concerning the debtor or by a custodian before the commencement of the case; or
a transfer under section 1185.
Notwithstanding any otherwise applicable nonbankruptcy law, any Federal, State, or local license, permit, or registration that the debtor had immediately before the commencement of the case that is included in a transfer under section 1185 shall be valid and all rights and obligations thereunder shall vest in the bridge company.
Exemption from securities laws
For purposes of section 1145, a security of the bridge company shall be deemed to be a security of a successor to the debtor under a plan if the court approves the disclosure statement for the plan as providing adequate information (as defined in section 1125(a)) about the bridge company and the security.
Inapplicability of certain avoiding powers
A transfer made or an obligation incurred by the debtor to an affiliate prior to or after the commencement of the case, including any obligation released by the debtor or the estate to or for the benefit of an affiliate, in contemplation of or in connection with a transfer under section 1185 is not avoidable under section 544, 547, 548(a)(1)(B), or 549, or under any similar nonbankruptcy law.
Consideration of financial stability
The court may consider the effect that any decision in connection with this subchapter may have on financial stability in the United States.
.
Amendments to title 28, United States Code
Amendment to chapter 13
Chapter 13 of title 28, United States Code, is amended by adding at the end the following:
Judge for a case under subchapter V of chapter 11 of title 11
Notwithstanding section 295, the Chief Justice of the United States shall designate not fewer than 10 bankruptcy judges to be available to hear a case under subchapter V of chapter 11 of title 11. Bankruptcy judges may request to be considered by the Chief Justice of the United States for such designation.
Notwithstanding section 155, a case under subchapter V of chapter 11 of title 11 shall be heard under section 157 by a bankruptcy judge designated under paragraph (1), who shall be randomly assigned to hear such case by the chief judge of the court of appeals for the circuit embracing the district in which the case is pending. To the greatest extent practicable, the approvals required under section 155 should be obtained.
If the bankruptcy judge assigned to hear a case under paragraph (2) is not assigned to the district in which the case is pending, the bankruptcy judge shall be temporarily assigned to the district.
A case under subchapter V of chapter 11 of title 11, and all proceedings in the case, shall take place in the district in which the case is pending.
In this section, the term covered financial corporation
has the meaning given that term in section 101(9A) of title 11.
.
Amendment to section 1334 of title 28
Section 1334 of title 28, United States Code, is amended by adding at the end the following:
This section does not grant jurisdiction to the district court after a transfer pursuant to an order under section 1185 of title 11 of any proceeding related to a special trustee appointed, or to a bridge company formed, in connection with a case under subchapter V of chapter 11 of title 11.
.
Technical and conforming amendment
The table of sections for chapter 13 of title 28, United States Code, is amended by adding at the end the following:
298. Judge for a case under subchapter V of chapter 11 of title 11.
.
Ending Government Guarantees
Repeal of obligation guarantee program
In general
The following sections of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301 et seq.) are repealed:
Section 1104.
Section 1105.
Section 1106.
Clerical amendment
The table of contents under section 1(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by striking the items relating to sections 1104, 1105, and 1106.
Repeal of systemic risk determination in resolutions
Section 13(c)(4)(G) of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)) is hereby repealed.
Restrictions on use of the Exchange Stabilization Fund
In general
Section 5302 of title 31, United States Code, is amended by adding at the end the following:
Amounts in the fund may not be used for the establishment of a guaranty program for any nongovernmental entity.
.
Conforming amendment
Section 131(b) of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5236(b)) is amended by inserting , or for the purposes of preventing the liquidation or insolvency of any entity
before the period.
Eliminating Financial Market Utility Designations
Repeal of title VIII
Repeal
Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5461 et seq.) is repealed, and provisions of law amended by such title are restored and revived as if such title had never been enacted.
Clerical amendment
The table of contents in section 1(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by striking the items relating to title VIII.
Empowering Americans to Achieve Financial Independence
Separation of Powers and Liberty Enhancements
Consumer Financial Opportunity Commission
Making the Bureau an independent Consumer Financial Opportunity Commission
The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et seq.) is amended—
in section 1011—
in subsection (a)—
by striking in the Federal Reserve System,
;
by striking independent bureau
and inserting independent commission
;
by striking Bureau of Consumer Financial Protection
and inserting Consumer Financial Opportunity Commission (hereinafter in this section referred to as the
; andCommission
)
by striking Bureau
each place such term appears and inserting Commission
;
by striking subsections (b), (c), and (d);
by redesignating subsection (e) as subsection (h);
in subsection (h), as so redesignated—
by striking , including in cities in which the Federal reserve banks, or branches of such banks, are located,
; and
by striking Bureau
each place such term appears and inserting Commission
; and
by inserting after subsection (a) the following new subsections:
Composition of the Commission
In general
The Commission shall be composed of 5 members who shall be appointed by the President, by and with the advice and consent of the Senate, from among individuals who—
are citizens of the United States; and
have strong competencies and experiences related to consumer financial products and services.
Staggering
The members of the Commission shall serve staggered terms, which initially shall be established by the President for terms of 1, 2, 3, 4, and 5 years, respectively.
Terms
In general
Each member of the Commission, including the Chair, shall serve for a term of 5 years.
Removal
The President may remove any member of the Commission for inefficiency, neglect of duty, or malfeasance in office.
Vacancies
Any member of the Commission appointed to fill a vacancy occurring before the expiration of the term to which that member’s predecessor was appointed (including the Chair) shall be appointed only for the remainder of the term.
Continuation of service
Each member of the Commission may continue to serve after the expiration of the term of office to which that member was appointed until a successor has been appointed by the President and confirmed by the Senate, except that a member may not continue to serve more than 1 year after the date on which that member’s term would otherwise expire.
Other employment prohibited
No member of the Commission shall engage in any other business, vocation, or employment.
Affiliation
Not more than 3 members of the Commission shall be members of any one political party.
Chair of the Commission
Appointment
The Chair of the Commission shall be appointed by the President from among the members of the Commission.
Authority
The Chair shall be the principal executive officer of the Commission, and shall exercise all of the executive and administrative functions of the Commission, including with respect to—
the appointment and supervision of personnel employed under the Commission (other than personnel employed regularly and full time in the immediate offices of members of the Commission other than the Chair);
the distribution of business among personnel appointed and supervised by the Chair and among administrative units of the Commission; and
the use and expenditure of funds.
Limitation
In carrying out any of the Chair’s functions under the provisions of this subsection the Chair shall be governed by general policies of the Commission and by such regulatory decisions, findings, and determinations as the Commission may by law be authorized to make.
Requests or estimates related to appropriations
Requests or estimates for regular, supplemental, or deficiency appropriations on behalf of the Commission may not be submitted by the Chair without the prior approval of the Commission.
No impairment by reason of vacancies
No vacancy in the members of the Commission shall impair the right of the remaining members of the Commission to exercise all the powers of the Commission. Three members of the Commission shall constitute a quorum for the transaction of business, except that if there are only 3 members serving on the Commission because of vacancies in the Commission, 2 members of the Commission shall constitute a quorum for the transaction of business. If there are only 2 members serving on the Commission because of vacancies in the Commission, 2 members shall constitute a quorum for the 6-month period beginning on the date of the vacancy which caused the number of Commission members to decline to 2.
Seal
The Commission shall have an official seal.
Compensation
Chair
The Chair shall receive compensation at the rate prescribed for level I of the Executive Schedule under section 5313 of title 5, United States Code.
Other members of the Commission
The 4 other members of the Commission shall each receive compensation at the rate prescribed for level II of the Executive Schedule under section 5314 of title 5, United States Code.
;
in section 1012(c), by striking paragraphs (2), (3), (4), and (5); and
in section 1014(b), by striking Not fewer than 6 members shall be appointed upon the recommendation of the regional Federal Reserve Bank Presidents, on a rotating basis.
.
Deeming of name
Any reference in a law, regulation, document, paper, or other record of the United States to the Bureau of Consumer Financial Protection shall be deemed a reference to the Consumer Financial Opportunity Commission.
Conforming amendments
Consumer Financial Protection Act of 2010
In general
Except as provided under subparagraph (B), the Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et seq.) is amended—
by striking Director of the Bureau
each place such term appears, other than where such term is used to refer to a Director other than the Director of the Bureau of Consumer Financial Protection, and inserting Consumer Financial Opportunity Commission
;
by striking Director
each place such term appears and inserting Consumer Financial Opportunity Commission
, other than where such term is used to refer to a Director other than the Director of the Bureau of Consumer Financial Protection; and
in section 1002, by striking paragraph (10).
Exceptions
The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et seq.) is amended—
in section 1013(c)(3)—
by striking Assistant Director of the Bureau for
and inserting Head of the Office of
; and
in subparagraph (B), by striking Assistant Director
and inserting Head of the Office
;
in section 1013(g)(2)—
by striking Assistant director
and inserting Head of the Office
; and
by striking an assistant director
and inserting a Head of the Office of Financial Protection for Older Americans
;
in section 1016(a), by striking Director of the Bureau
and inserting Chair of the Consumer Financial Opportunity Commission
; and
in section 1066(a), by striking Director of the Bureau is
and inserting first member of the Commission is
.
Dodd-Frank Wall Street Reform and Consumer Protection Act
Section 1447 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 1701p-2) is amended by striking Director of the Bureau
each place such term appears and inserting Consumer Financial Opportunity Commission
.
Expedited Funds Availability Act
The Expedited Funds Availability Act (12 U.S.C. 4001 et seq.), as amended by section 1086 of the Consumer Financial Protection Act of 2010, is amended by striking Director of the Bureau
each place such term appears and inserting Consumer Financial Opportunity Commission
.
Federal Deposit Insurance Act
Section 2 of the Federal Deposit Insurance Act (12 U.S.C. 1812), as amended by section 336(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is amended by striking Director of the Consumer Financial Protection Bureau
each place such term appears and inserting Chair of the Consumer Financial Opportunity Commission
.
Federal Financial Institutions Examination Council Act of 1978
Section 1004(a)(4) of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3303(a)(4)), as amended by section 1091 of the Consumer Financial Protection Act of 2010, is amended by striking Director of the Consumer Financial Protection Bureau
and inserting Chair of the Consumer Financial Opportunity Commission
.
Financial Literacy and Education Improvement Act
Section 513 of the Financial Literacy and Education Improvement Act (20 U.S.C. 9702), as amended by section 1013(d)(5) of the Consumer Financial Protection Act of 2010, is amended by striking Director
each place such term appears and inserting Chair of the Consumer Financial Opportunity Commission
.
Home Mortgage Disclosure Act of 1975
Section 307 of the Home Mortgage Disclosure Act of 1975, as amended by section 1094(6) of the Consumer Financial Protection Act of 2010, is amended by striking Director of the Bureau of Consumer Financial Protection
each place such term appears and inserting Consumer Financial Opportunity Commission
.
Interstate Land Sales Full Disclosure Act
The Interstate Land Sales Full Disclosure Act, as amended by section 1098A of the Consumer Financial Protection Act of 2010, is amended—
by amending section 1402(1) to read as follows:
Chair
means the Chair of the Consumer Financial Opportunity Commission;
; and
in section 1416(a), by striking Director of the Bureau of Consumer Financial Protection
and inserting Chair
.
Real Estate Settlement Procedures Act of 1974
Section 5 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604), as amended by section 1450 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is amended—
by striking The Director of the Bureau of Consumer Financial Protection (hereafter in this section referred to as the
and inserting Director
)The Consumer Financial Opportunity Commission
; and
by striking Director
each place such term appears and inserting Consumer Financial Opportunity Commission
.
S.A.F.E. Mortgage Licensing Act of 2008
The S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.), as amended by section 1100 of the Consumer Financial Protection Act of 2010, is amended—
by striking Director
each place such term appears in headings and text, other than where such term is used in the context of the Director of the Office of Thrift Supervision, and inserting Consumer Financial Opportunity Commission
; and
in section 1503, by striking paragraph (10).
Title 44, United States Code
Section 3513(c) of title 44, United States Code, as amended by section 1100D(b) of the Consumer Financial Protection Act of 2010, is amended by striking Director of the Bureau
and inserting Consumer Financial Opportunity Commission
.
Bringing the Commission into the regular appropriations process
Section 1017 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5497) is amended—
in subsection (a)—
by amending the heading of such subsection to read as follows: Budget, financial management, and audit.—
;
by striking paragraphs (1), (2), and (3);
by redesignating paragraphs (4) and (5) as paragraphs (1) and (2), respectively; and
by striking subparagraphs (E) and (F) of paragraph (1), as so redesignated;
by striking subsections (b) and (c);
by redesignating subsections (d) and (e) as subsections (b) and (c), respectively; and
in subsection (c), as so redesignated—
by striking paragraphs (1), (2), and (3) and inserting the following:
Authorization of appropriations
There is authorized to be appropriated to the Commission for fiscal year 2017 an amount equal to the aggregate amount of funds transferred by the Board of Governors to the Bureau of Consumer Financial Protection during fiscal year 2015.
; and
by redesignating paragraph (4) as paragraph (2).
Consumer Financial Opportunity Commission Inspector General Reform
Appointment of Inspector General
The Inspector General Act of 1978 (5 U.S.C. App.) is amended—
in section 8G—
in subsection (a)(2), by striking and the Bureau of Consumer Financial Protection
;
in subsection (c), by striking For purposes of implementing this section
and all that follows through the end of the subsection; and
in subsection (g)(3), by striking and the Bureau of Consumer Financial Protection
; and
in section 12—
in paragraph (1), by inserting the Consumer Financial Opportunity Commission;
after the President of the Export-Import Bank;
; and
in paragraph (2), by inserting the Consumer Financial Opportunity Commission,
after the Export-Import Bank,
.
Requirements for the Inspector General for the Consumer Financial Opportunity Commission
Establishment
Section 1011 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5491), as amended by section 311, is further amended—
by adding at the end the following:
Inspector General
There is established the position of the Inspector General of the Commission.
; and
in subsection (d), by striking or Deputy Director
each place such term appears and inserting , Deputy Director, or Inspector General
.
Hearings
Section 1016 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5496) is amended by inserting after subsection (c) the following:
Additional Requirement for Inspector General
On a separate occasion from that described in subsection (a), the Inspector General of the Commission shall appear, upon invitation, before the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services and the Committee on Energy and Commerce of the House of Representatives at semi-annual hearings regarding the reports required under subsection (b) and the reports required under section 5 of the Inspector General Act of 1978 (5 U.S.C. App.).
.
Participation in the Council of Inspectors General on Financial Oversight
Section 989E(a)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by adding at the end the following:
The Consumer Financial Opportunity Commission.
.
Deadline for appointment
Not later than 60 days after the date of the enactment of this Act, the President shall appoint an Inspector General for the Consumer Financial Opportunity Commission in accordance with section 3 of the Inspector General Act of 1978 (5 U.S.C. App.).
Transition period
The Inspector General of the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection shall serve in that position until the confirmation of an Inspector General for the Consumer Financial Opportunity Commission. At that time, the Inspector General of the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection shall become the Inspector General of the Board of Governors of the Federal Reserve System.
Private parties authorized to compel the Commission to seek sanctions by filing civil actions; Adjudications deemed actions
Section 1053 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5563) is amended by adding at the end the following:
Private parties authorized to compel the Commission to seek sanctions by filing civil actions
Termination of administrative proceeding
In the case of any person who is a party to a proceeding brought by the Commission under this section, to which chapter 5 of title 5, United States Code, applies, and against whom an order imposing a cease and desist order or a penalty may be issued at the conclusion of the proceeding, that person may, not later than 20 days after receiving notice of such proceeding, and at that person’s discretion, require the Commission to terminate the proceeding.
Civil action authorized
If a person requires the Commission to terminate a proceeding pursuant to paragraph (1), the Commission may bring a civil action against that person for the same remedy that might be imposed.
Adjudications deemed actions
Any administrative adjudication commenced under this section shall be deemed an action
for purposes of section 1054(g).
.
Civil investigative demands to be appealed to courts
Section 1052 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5562) is amended—
in subsection (c)—
in paragraph (2), by inserting after shall state
the following: with specificity
; and
by adding at the end the following:
Meeting requirement
The recipient of a civil investigative demand shall meet and confer with a Commission investigator within 30 calendar days after receipt of the demand to discuss and attempt to resolve all issues regarding compliance with the civil investigative demand, unless the Commission grants an extension requested by such recipient.
;
in subsection (f)—
by amending paragraph (1) to read as follows:
In general
Not later than 45 days after the service of any civil investigative demand upon any person under subsection (c), or at any time before the return date specified in the demand, whichever period is shorter, or within such period exceeding 45 days after service or in excess of such return date as may be prescribed in writing, subsequent to service, by any Commission investigator named in the demand, such person may file, in the district court of the United States for any judicial district in which such person resides, is found, or transacts business, a petition for an order modifying or setting aside the demand.
; and
in paragraph (2), by striking at the Bureau
; and
in subsection (h)—
by striking (1) In general.—
; and
by striking paragraph (2).
Commission dual mandate and economic analysis
Purpose
Section 1021(a) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5511(a)) is amended—
by striking fair, transparent, and competitive
and inserting: fair and transparent
; and
by adding at the end the following: In addition, the Commission shall seek to implement and, where applicable, enforce Federal consumer financial law consistently for the purpose of strengthening participation in markets by covered persons, without Government interference or subsidies, to increase competition and enhance consumer choice.
; and
Office of Economic Analysis
In general
Section 1013 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5493) is amended by adding at the end the following:
Office of Economic Analysis
Establishment
The Chair shall establish an Office of Economic Analysis.
Review and assessment of proposed rules and regulations
The Office of Economic Analysis shall—
review all proposed rules and regulations of the Commission;
assess the impact of such rules and regulations on consumer choice, price, and access to credit products; and
publish a report on such reviews and assessments in the Federal Register.
Measuring existing rules and regulations
The Office of Economic Analysis shall—
review each rule and regulation issued by the Commission after 1, 2, 5, and 10 years;
measure the rule or regulation’s success in solving the problem that the rule or regulation was intended to solve when issued; and
publish a report on such review and measurement in the Federal Register.
.
Consideration of review and assessment; rulemaking requirements
Section 1022(b) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5512(b)) is amended by adding at the end the following:
Consideration of review and assessment by the Office of Economic Analysis
In general
Before issuing any rule or regulation, the Chair shall consider the review and assessment of such rule or regulation carried out by the Office of Economic Analysis.
Notice of disagreement
If a member of the Commission disagrees with any part of a review and assessment described under subparagraph (A) with respect to any rule or regulation, the member shall accompany any such rule or regulation with a statement explaining why the member so disagrees.
Identification of problems and metrics for judging success
In general
The Chair shall, in each proposed rulemaking of the Commission—
identify the problem that the particular rule or regulations is seeking to solve; and
specify the metrics by which the Commission will measure the success of the rule or regulation in solving such problem.
Required metrics
The metrics specified under subparagraph (A)(ii) shall include a measurement of changes to consumer access to, and cost of, consumer financial products and services.
.
Avoidance of duplicative or unnecessary analyses
The Commission may perform any of the analyses required by this section in conjunction with, or as part of, any other agenda or analysis required by any other provision of law, if such other agenda or analysis satisfies the provisions of this section.
No deference to Commission interpretation
The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et seq.) is amended—
in section 1022(b)(4)—
by striking (A) In general.—
; and
by striking subparagraph (B); and
in section 1061(b)(5)(E)—
by striking affords to the—
and all that follows through (i) Federal Trade Commission
and inserting affords to the Federal Trade Commission
;
by striking ; or
and inserting a period; and
by striking clause (ii).
Administrative Enhancements
Commission Advisory Boards
In general
The Consumer Financial Protection Act of 2010 is amended by inserting after section 1014 (12 U.S.C. 5494) the following new section:
Advisory Boards
Small Business Advisory Board
Establishment
The Commission shall establish a Small Business Advisory Board—
to advise and consult with the Commission in the exercise of the Commission’s functions under the Federal consumer financial laws applicable to eligible financial products or services; and
to provide information on emerging practices of small business concerns that provide eligible financial products or services, including regional trends, concerns, and other relevant information.
Membership
Number
The Commission shall appoint no fewer than 15 and no more than 20 members to the Small Business Advisory Board.
Qualification
Members appointed pursuant to subparagraph (A) shall be representatives of small business concerns that—
provide eligible financial products or services;
are service providers to covered persons; and
use consumer financial products or services in financing the business activities of such concern.
Meetings
The Small Business Advisory Board—
shall meet from time to time at the call of the Commission; and
shall meet at least twice each year.
Credit Union Advisory Council
Establishment
The Commission shall establish a Credit Union Advisory Council to advise and consult with the Commission on consumer financial products or services that impact credit unions.
Membership
The Commission shall appoint no fewer than 15 and no more than 20 members to the Credit Union Advisory Council.
Meetings
The Credit Union Advisory Council—
shall meet from time to time at the call of the Commission; and
shall meet at least twice each year.
Community Bank Advisory Council
Establishment
The Commission shall establish a Community Bank Advisory Council to advise and consult with the Commission on consumer financial products or services that impact community banks.
Membership
The Commission shall appoint no fewer than 15 and no more than 20 members to the Community Bank Advisory Council.
Meetings
The Community Bank Advisory Council—
shall meet from time to time at the call of the Commission; and
shall meet at least twice each year.
Compensation and travel expenses
Members of the Small Business Advisory Board, the Credit Union Advisory Council, or the Community Bank Advisory Council who are not full-time employees of the United States shall—
be entitled to receive compensation at a rate fixed by the Commission while attending meetings of the Small Business Advisory Board, the Credit Union Advisory Council, or the Community Bank Advisory Council, including travel time; and
be allowed travel expenses, including transportation and subsistence, while away from their homes or regular places of business.
Definitions
In this section—
the term eligible financial product or service means a financial product or service that is offered or provided for use by consumers primarily for personal, family, or household purposes as described in clause (i), (iii), (v), (vi), or (ix) of section 1002(15)(A); and
the term small business concern has the meaning given such term in section 3 of the Small Business Act (15 U.S.C. 632).
.
Table of contents amendment
The table of contents in section 1 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301 et seq.) is amended by inserting after the item relating to section 1014 the following new item:
Sec.1014A. Advisory Boards.
.
Advisory opinions
Section 1022(b) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5512(b)), as amended by section 316, is further amended by adding at the end the following:
Advisory opinions
Establishing procedures
In general
The Chair shall establish a procedure and, as necessary, promulgate rules to provide written opinions in response to inquiries concerning the conformance of specific conduct with Federal consumer financial law. In establishing the procedure the Chair shall consult with the prudential regulators and such other Federal departments and agencies as the Chair determines appropriate, and obtain the views of all interested persons through a public notice and comment period.
Scope of request
A request for an opinion under this paragraph must relate to specific proposed or prospective conduct by a covered person contemplating the proposed or prospective conduct.
Submission
A request for an opinion under this paragraph may be submitted to the Chair either by or on behalf of a covered person.
Right to withdraw inquiry
Any inquiry under this paragraph may be withdrawn at any time prior to the Chair issuing an opinion in response to such inquiry, and any opinion based on an inquiry that has been withdrawn shall have no force or effect.
Issuance of opinions
In general
The Chair shall, within 90 days of receiving the request for an opinion under this paragraph, either—
issue an opinion stating whether the described conduct would violate Federal consumer financial law;
if permissible under clause (iii), deny the request; or
explain why it is not feasible to issue an opinion.
Extension
Notwithstanding clause (i), if the Chair determines that the Commission requires additional time to issue an opinion, the Chair may make a single extension of the deadline of 90 days or less.
Denial of requests
The Chair shall not issue an opinion, and shall so inform the requestor, if the request for an opinion—
asks a general question of interpretation;
asks about a hypothetical situation;
asks about the conduct of someone other than the covered person on whose behalf the request is made;
asks about past conduct that the covered person on whose behalf the request is made does not plan to continue in the future; or
fails to provide necessary supporting information requested by the Commission within a reasonable time established by the Commission.
Amendment and revocation
An advisory opinion issued under this paragraph may be amended or revoked at any time.
Public disclosure
An opinion rendered pursuant to this paragraph shall be placed in the Commission’s public record 90 days after the requesting party has received the advice, subject to any limitations on public disclosure arising from statutory restrictions, Commission regulations, or the public interest. The Commission shall redact any personal, confidential, or identifying information about the covered person or any other persons mentioned in the advisory opinion, unless the covered person consents to such disclosure.
Report to Congress
The Commission shall, concurrent with the semi-annual report required under section 1016(b), submit information regarding the number of requests for an advisory opinion received, the subject of each request, the number of requests denied pursuant to clause (iii), and the time needed to respond to each request.
Reliance on opinion
Any person may rely on an opinion issued by the Chair pursuant to this paragraph that has not been amended or withdrawn. No liability under Federal consumer financial law shall attach to conduct consistent with an advisory opinion that had not been amended or withdrawn at the time the conduct was undertaken.
Confidentiality
Any document or other material that is received by the Commission or any other Federal department or agency in connection with an inquiry under this paragraph shall be exempt from disclosure under section 552 of title 5, United States Code (commonly referred to as the Freedom of Information Act
) and may not, except with the consent of the covered person making such inquiry, be made publicly available, regardless of whether the Chair responds to such inquiry or the covered person withdraws such inquiry before receiving an opinion.
Assistance for small businesses
In general
The Commission shall assist, to the maximum extent practicable, small businesses in preparing inquiries under this paragraph.
Small business defined
For purposes of this subparagraph, the term small business has the meaning given the term small business concern under section 3 of the Small Business Act (15 U.S.C. 632).
Inquiry fee
In general
The Chair shall develop a system to charge a fee for each inquiry made under this paragraph in an amount sufficient, in the aggregate, to pay for the cost of carrying out this paragraph.
Notice and comment
Not later than 45 days after the date of the enactment of this paragraph, the Chair shall publish a description of the fee system described in clause (i) in the Federal Register and shall solicit comments from the public for a period of 60 days after publication.
Finalization
The Chair shall publish a final description of the fee system and implement such fee system not later than 30 days after the end of the public comment period described in clause (ii).
.
Reform of Consumer Financial Civil Penalty Fund
Segregated Accounts
Section 1017(b) of the Consumer Financial Protection Act of 2010, as redesignated by section 312, is amended by redesignating paragraph (2) as paragraph (3), and by inserting after paragraph (1) the following new paragraph:
Segregated Accounts in Civil Penalty Fund
In General
The Commission shall establish and maintain a segregated account in the Civil Penalty Fund each time the Commission obtains a civil penalty against any person in any judicial or administrative action under Federal consumer financial laws.
Deposits in Segregated Accounts
The Commission shall deposit each civil penalty collected into the segregated account established for such penalty under subparagraph (A).
.
Payment to Victims
Paragraph (3) of section 1017(b) of such Act, as redesignated by subsection (a), is amended to read as follows:
Payment to Victims
In General
Identification of Class
Not later than 60 days after the date of deposit of amounts in a segregated account in the Civil Penalty Fund, the Commission shall identify the class of victims of the violation of Federal consumer financial laws for which such amounts were collected and deposited under paragraph (2).
Payments
The Commission, within 2 years after the date on which such class of victims is identified, shall locate and make payments from such amounts to each victim.
Funds Deposited in Treasury
In General
The Commission shall deposit into the general fund of the Treasury any amounts remaining in a segregated account in the Civil Penalty Fund at the end of the 2-year period for payments to victims under subparagraph (A).
Impossible or Impractical Payments
If the Commission determines before the end of the 2-year period for payments to victims under subparagraph (A) that such victims cannot be located or payments to such victims are otherwise not practicable, the Commission shall deposit into the general fund of the Treasury the amounts in the segregated account in the Civil Penalty Fund.
.
Conforming Amendment
Paragraph (1) of such section 1017(b) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5497(d)(1)) is amended by striking the last sentence.
Effective Date
In General
The amendments made by this section shall apply with respect to civil penalties collected after the date of enactment of this Act.
Amounts in Consumer Financial Civil Penalty Fund on Date of Enactment
With respect to amounts in the Consumer Financial Civil Penalty Fund on the date of enactment of this Act that were not allocated for consumer education and financial literacy programs on or before September 30, 2015, the Consumer Financial Opportunity Commission shall separate such amounts into segregated accounts in accordance with, and for purposes of, section 1017(d) of the Consumer Financial Protection Act of 2010, as amended by this section. The date of deposit of such amounts shall be deemed to be the date of enactment of this Act.
Commission research paper transparency
Section 1013 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5493), as amended by section 316, is further amended by adding at the end the following:
Research paper transparency
Any time the Commission, either through the research unit established by the Chair under subsection (b)(1) or otherwise, issues a research paper that is available to the public, the Commission shall accompany such paper with all studies, data, and other analyses on which the paper was based.
.
Commission pay fairness
In general
Section 1013(a)(2) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5493(a)(2)) is amended to read as follows:
Compensation
The rates of basic pay for all employees of the Commission shall be set and adjusted by the Commission in accordance with the General Schedule set forth in section 5332 of title 5, United States Code.
.
Effective date
The amendment made by subsection (a) shall apply to service by an employee of the Consumer Financial Opportunity Commission following the 90-day period beginning on the date of enactment of this Act.
Separation of market monitoring functions and supervisory functions
The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et seq.) is amended—
in section 1022(c)—
in paragraph (1), by striking In order to support its rulemaking and other functions, the
and inserting The
; and
in paragraph (4)—
in subparagraph (A), by inserting after gather information
the following: on a sampling basis
;
in subparagraph (B)—
in clause (i), by striking a variety of sources, including examination reports concerning covered persons or service providers
; and
in clause (ii), by inserting after require
the following: , on a sampling basis,
; and
in subparagraph (C), by inserting before the period the following: or for purposes of assessing such covered persons’ or service providers’ compliance with the requirements of Federal consumer financial law
;
in section 1024(b)(1)—
in subparagraph (A), by adding and
at the end;
in subparagraph (B), by striking ; and
and inserting a period; and
by striking subparagraph (C);
in section 1025(b)(1)—
in subparagraph (A), by adding and
at the end;
in subparagraph (B), by striking ; and
and inserting a period; and
by striking subparagraph (C); and
in section 1026(b), by striking , and to assess and detect risks to consumers and consumer financial markets
.
Requirement to verify information in the complaint database before it may be released to the general public
Section 1013(b)(3)(A) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5493(b)(3)(A)) is amended by adding at the end the following: The Chair may not make any information about a consumer complaint in such database available to the public without first verifying the accuracy of all facts alleged in such complaint.
.
Commission supervision limited to banks, thrifts, and credit unions with greater than $50 billion in assets
The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et seq.) is amended—
in section 1025(a), by striking $10,000,000,000
each place such term appears and inserting $50,000,000,000
; and
in section 1026(a), by striking $10,000,000,000
each place such term appears and inserting $50,000,000,000
.
Transfer of old OTS building from OCC to GSA
Not later than 180 days after the date of enactment of this Act, the Chair of the Board of Directors of the Office of the Comptroller of the Currency shall transfer administrative jurisdiction over the Federal property located at 1700 G Street, Northwest, in the District of Columbia to the Administrator of General Services.
Policy Enhancements
Consumer right to financial privacy
Requirement of the Commission to obtain permission before collecting nonpublic personal information
Required notification and permission
Section 1022(c)(9)(A) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5512(c)(9)(A)) is amended—
by striking may not obtain from a covered person or service provider
and inserting may not request, obtain, access, collect, use, retain, or disclose
;
by striking personally identifiable financial
and inserting nonpublic personal
; and
by striking from the financial records
and all that follows through the period at the end and inserting
unless—
the Commission clearly and conspicuously discloses to the consumer, in writing or in an electronic form, what information will be requested, obtained, accessed, collected, used, retained, or disclosed; and
before such information is requested, obtained, accessed, collected, used, retained, or disclosed, the consumer informs the Commission that such information may be requested, obtained, accessed, collected, used, retained, or disclosed.
.
Application of requirement to contractors of the Commission
Section 1022(c)(9)(B) of such Act (12 U.S.C. 5512(c)(9)(B)) is amended to read as follows:
Application of requirement to contractors of the Commission
Subparagraph (A) shall apply to any person directed or engaged by the Commission to collect information to the extent such information is being collected on behalf of the Commission.
.
Definition of nonpublic personal information
Section 1022(c)(9) of such Act (12 U.S.C. 5512(c)(9)) is amended by adding at the end the following:
Definition of nonpublic personal information
In this paragraph, the term nonpublic personal information has the meaning given the term in section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809).
.
Removal of exemption for the Commission from the Right to Financial Privacy Act
Section 1113 of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3413) is amended by striking subsection (r).
Repeal of Council authority to set aside Bureau rules and requirement of safety and soundness considerations when issuing rules
Repeal of authority
In general
Section 1023 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5513) is hereby repealed.
Conforming amendment
Section 1022(b)(2)(C) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5512(b)(2)(C)) is amended by striking , except that nothing in this clause shall be construed as altering or limiting the procedures under section 1023 that may apply to any rule prescribed by the Bureau of Consumer Financial Protection
.
Clerical amendment
The table of contents under section 1(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by striking the item relating to section 1023.
Safety and soundness check
Section 1022(b)(2)(A) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5512(b)(2)(A)) is amended—
in clause (i), by striking and
at the end;
in clause (ii), by adding and
at the end; and
by adding at the end the following:
the impact of such rule on the financial safety or soundness of an insured depository institution;
.
State and tribal payday loan regulation 5-year exemption
Section 1022 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5512) is amended by adding at the end the following:
State and tribal payday loan regulation 5-year exemption
In general
With respect to a final rule or regulation issued by the Bureau of Consumer Financial Protection to regulate payday loans, vehicle title loans, or other similar loans, if a State or a federally recognized Indian tribe requests, in writing, for the Commission to provide the State or tribe with a waiver from such rule or regulation, the Commission shall grant a 5-year waiver to such State or tribe, during which such rule or regulation shall not apply within such State or land held in trust for the benefit of such federally recognized Indian tribe.
Extension of waiver
A State or a federally recognized Indian tribe receiving a waiver under paragraph (1) shall have the right to an unlimited number of 5-year extensions of such waiver, which shall be granted upon the request, in writing, for such waiver by the State or tribe.
.
Reforming indirect auto financing guidance
Nullification of auto lending guidance
Bulletin 2013–02 of the Bureau of Consumer Financial Protection (published March 21, 2013) shall have no force or effect.
Guidance requirements
Section 1022(b) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5512(b)), as amended by section 322, is further amended by adding at the end the following:
Guidance on indirect auto financing
In proposing and issuing guidance primarily related to indirect auto financing, the Commission shall—
provide for a public notice and comment period before issuing the guidance in final form;
make available to the public, including on the website of the Commission, all studies, data, methodologies, analyses, and other information relied on by the Commission in preparing such guidance;
redact any information that is exempt from disclosure under paragraph (3), (4), (6), (7), or (8) of section 552(b) of title 5, United States Code;
consult with the Board of Governors of the Federal Reserve System, the Federal Trade Commission, and the Department of Justice; and
conduct a study on the costs and impacts of such guidance to consumers and women-owned, minority-owned, veteran-owned, and small businesses, including consumers and small businesses in rural areas.
.
Rule of construction
Nothing in this section shall be construed to apply to guidance issued by the Consumer Financial Opportunity Commission that is not primarily related to indirect auto financing.
Prohibition of Government price controls for payment card transactions
In general
Section 1075 of the Consumer Financial Protection Act of 2010 is hereby repealed and the provisions of law amended by such section are revived or restored as if such section had not been enacted.
Clerical amendment
The table of contents under section 1(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by striking the item relating to section 1075.
Annual studies on ending the conservatorship of Fannie Mae, Freddie Mac, and reforming the housing finance system
Section 1074 of the Consumer Financial Protection Act of 2010 is amended—
in subsection (a)—
in paragraph (1), by inserting after Secretary of the Treasury shall
the following: , on an annual basis,
; and
in paragraph (2), by striking The study
and inserting Each study
;
by amending subsection (b) to read as follows:
Report and recommendations
The Secretary of the Treasury shall submit a report on each study required under subsection (a), along with recommendations developed in such study, to the President, the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives.
; and
by adding at the end the following:
Appearances before Congress
The Secretary of the Treasury shall appear before the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives at annual hearings regarding each report required under subsection (b).
.
Removal of abusive
authority
The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et seq.) is amended—
in section 1013(g)—
by striking , deceptive, and abusive
each place such term appears and inserting and deceptive
; and
by striking , deceptive, or abusive
each place such term appears and inserting or deceptive
;
in section 1021(b)(2), by striking , deceptive, or abusive
and inserting or deceptive
;
in section 1031—
in the heading of such section, by striking , DECEPTIVE, OR ABUSIVE
and inserting OR DECEPTIVE
;
by striking , deceptive, or abusive
each place such term appears and inserting or deceptive
;
by striking subsection (d); and
by redesignating subsections (e) and (f) as subsections (d) and (e), respectively;
in section 1036(a)(1)(B), by striking , deceptive, or abusive
and inserting or deceptive
; and
in section 1076(b)(2)(A), by striking , deceptive, or abusive
and inserting or deceptive
.
Repeal of authority to restrict arbitration
In general
Section 1028 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5518) is hereby repealed.
Clerical amendment
The table of contents under section 1(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by striking the item relating to section 1028.
Capital Markets Improvements
SEC Reform, Restructuring, and Accountability
Authorization of appropriations
Section 35 of the Securities Exchange Act of 1934 (15 U.S.C. 78kk) is amended by striking paragraphs (1) through (5) and inserting the following:
for fiscal year 2017, $1,555,000,000;
for fiscal year 2018, $1,605,000,000;
for fiscal year 2019, $1,655,000,000;
for fiscal year 2020, $1,705,000,000; and
for fiscal year 2021, $1,755,000,000.
.
Report on unobligated appropriations
Section 23 of the Securities Exchange Act of 1934 (15 U.S.C. 78w) is amended by adding at the end the following:
Report on unobligated appropriations
If, at the end of any fiscal year, there remain unobligated any funds that were appropriated to the Commission for such fiscal year, the Commission shall, not later than 30 days after the last day of such fiscal year, submit to the Committee on Financial Services and the Committee on Appropriations of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs and the Committee on Appropriations of the Senate a report stating the amount of such unobligated funds. If there is any material change in the amount stated in the report, the Commission shall, not later than 7 days after determining the amount of the change, submit to such committees a supplementary report stating the amount of and reason for the change.
.
SEC Reserve Fund abolished
Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is amended by striking subsection (i).
Fees to offset appropriations
Section 31 of the Securities Exchange Act of 1934
Section 31 of the Securities Exchange Act of 1934 (15 U.S.C. 78ee) is amended—
by striking subsection (a) and inserting the following:
Collection
The Commission shall, in accordance with this section, collect transaction fees and assessments.
;
in subsection (i)—
in paragraph (1)(A), by inserting except as provided in paragraph (2),
before shall
; and
by striking paragraph (2) and inserting the following:
General Revenue
Any fees collected for a fiscal year pursuant to this section, sections 13(e) and 14(g) of this title, and section 6(b) of the Securities Act of 1933 in excess of the amount provided in appropriation Acts for collection for such fiscal year pursuant to such sections shall be deposited and credited as general revenue of the Treasury.
;
in subsection (j)—
by striking the regular appropriation to the Commission by Congress for such fiscal year
each place it appears and inserting the target offsetting collection amount for such fiscal year
; and
in paragraph (2), by striking subsection (l)
and inserting subsection (l)(2)
; and
by striking subsection (l) and inserting the following:
Definitions
For purposes of this section:
Target offsetting collection amount
The target offsetting collection amount for a fiscal year is—
for fiscal year 2017, $1,400,000,000; and
for each succeeding fiscal year, the target offsetting collection amount for the prior fiscal year, adjusted by the rate of inflation.
Baseline estimate of the aggregate dollar amount of sales
The baseline estimate of the aggregate dollar amount of sales for any fiscal year is the baseline estimate of the aggregate dollar amount of sales of securities (other than bonds, debentures, other evidences of indebtedness, security futures products, and options on securities indexes (excluding a narrow-based security index)) to be transacted on each national securities exchange and by or through any member of each national securities association (otherwise than on a national securities exchange) during such fiscal year as determined by the Commission, after consultation with the Congressional Budget Office and the Office of Management and Budget, using the methodology required for making projections pursuant to section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985.
.
Section 6(b) of the Securities Act of 1933
Section 6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)) is amended—
by striking target fee collection amount
each place it appears and inserting target offsetting collection amount
;
in paragraph (4), by striking the last sentence and inserting the following:
Subject to paragraphs (6)(B) and (7), an adjusted rate prescribed under paragraph (2) shall take effect on the later of—
the first day of the fiscal year to which such rate applies; or
five days after the date on which a regular appropriation to the Commission for such fiscal year is enacted.
;
in paragraph (5), by inserting of the Securities Exchange Act of 1934
after sections 13(e) and 14(g)
;
by redesignating paragraph (6) as paragraph (8);
by inserting after paragraph (5) the following:
Offsetting collections
Fees collected pursuant to this subsection for any fiscal year—
except as provided in section 31(i)(2) of the Securities Exchange Act of 1934, shall be deposited and credited as offsetting collections to the account providing appropriations to the Commission; and
except as provided in paragraph (7), shall not be collected for any fiscal year except to the extent provided in advance in appropriation Acts.
Lapse of appropriation
If on the first day of a fiscal year a regular appropriation to the Commission has not been enacted, the Commission shall continue to collect fees (as offsetting collections) under this subsection at the rate in effect during the preceding fiscal year, until 5 days after the date such a regular appropriation is enacted.
; and
in paragraph (8) (as so redesignated), by striking the heading of subparagraph (A) and inserting Target offsetting collection amount.—
.
Section 13(e) of the Securities Exchange Act of 1934
Section 13(e) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(e)) is amended—
by striking paragraph (5) and inserting the following:
Offsetting collections
Fees collected pursuant to this subsection for any fiscal year—
except as provided in section 31(i)(2), shall be deposited and credited as offsetting collections to the account providing appropriations to the Commission; and
except as provided in paragraph (8), shall not be collected for any fiscal year except to the extent provided in advance in appropriations Acts.
; and
by adding at the end the following:
Lapse of appropriation
If on the first day of a fiscal year a regular appropriation to the Commission has not been enacted, the Commission shall continue to collect fees (as offsetting collections) under this subsection at the rate in effect during the preceding fiscal year, until 5 days after the date such a regular appropriation is enacted.
.
Section 14(g) of the Securities Exchange Act of 1934
Section 14(g) of the Securities Exchange Act of 1934 (15 U.S.C. 78n(g)) is amended—
by striking paragraph (5) and inserting the following:
Offsetting collections
Fees collected pursuant to this subsection for any fiscal year—
except as provided in section 31(i)(2), shall be deposited and credited as offsetting collections to the account providing appropriations to the Commission; and
except as provided in paragraph (8), shall not be collected for any fiscal year except to the extent provided in advance in appropriations Acts.
;
by redesignating paragraph (8) as paragraph (9); and
by inserting after paragraph (7) the following:
Lapse of appropriation
If on the first day of a fiscal year a regular appropriation to the Commission has not been enacted, the Commission shall continue to collect fees (as offsetting collections) under this subsection at the rate in effect during the preceding fiscal year, until 5 days after the date such a regular appropriation is enacted.
.
Effective date
The amendments made by this section—
shall apply beginning on October 1, 2016, except that for fiscal year 2017, the Securities and Exchange Commission shall publish—
the rates established under section 31 of the Securities Exchange Act of 1934, as amended by this section, not later than 30 days after the date on which an Act making a regular appropriation to the Commission for fiscal year 2017 is enacted; and
the rate established under section 6(b) of the Securities Act of 1933, as amended by this section, not later than August 31, 2016; and
shall not apply with respect to fees for any fiscal year before fiscal year 2017.
Implementation of recommendations
Section 967 of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by adding at the end the following:
Implementation of recommendations
Not later than 6 months after the date of enactment of this subsection, the Securities and Exchange Commission shall complete an implementation of the recommendations contained in the report of the independent consultant issued under subsection (b) on March 10, 2011. To the extent that implementation of certain recommendations requires legislation, the Commission shall submit a report to Congress containing a request for legislation granting the Commission such authority it needs to fully implement such recommendations.
.
Office of Credit Ratings to report to the Division of Trading and Markets
Section 15E(p)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–7(p)(1)) is amended—
in subparagraph (A), by striking within the Commission
and inserting within the Division of Trading and Markets
; and
in subparagraph (B), by striking report to the Chairman
and inserting report to the head of the Division of Trading and Markets
.
Office of Municipal Securities to report to the Division of Trading and Markets
Section 979 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 78o–4a) is amended—
in subsection (a), by inserting , within the Division of Trading and Markets,
after There shall be in the Commission
; and
in subsection (b), by striking report to the Chairman
and inserting report to the head of the Division of Trading and Markets
.
Independence of Commission Ombudsman
Section 4(g)(8) of the Securities Exchange Act of 1934 (15 U.S.C. 78d(g)(8)) is amended—
in subparagraph (A), by striking the Investor Advocate shall appoint
and all that follows through Investor Advocate
and inserting the Chairman shall appoint an Ombudsman, who shall report to the Commission
; and
in subparagraph (D)—
by striking report to the Investor Advocate
and inserting report to the Commission
; and
by striking the last sentence.
Coordination with the Investor Advisory Committee
Section 39 of the Securities Exchange Act of 1934 (15 U.S.C. 78pp) is amended—
in subsection (a)(2)(B), by striking submit
and inserting, in consultation with the Small Business Capital Formation Advisory Committee established under section 40, submit
;
in subsection (b)(1)—
in subparagraph (C), by striking and
;
in subparagraph (D)(iv), by striking the period at the end and inserting ; and
; and
by adding at the end the following:
a member of the Small Business Capital Formation Advisory Committee who shall be a nonvoting member.
; and
by striking subsections (i) and (j).
Duties of Investor Advocate
Section 4(g)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78d(g)(4)) is amended—
in subparagraph (D)(ii), by striking and
;
in subparagraph (E), by striking the period at the end and inserting a semicolon; and
by adding at the end the following:
not take a position on any legislation pending before Congress other than a legislative change proposed by the Investor Advocate pursuant to subparagraph (E);
consult with the Advocate for Small Business Capital Formation on proposed recommendations made under subparagraph (E); and
advise the Advocate for Small Business Capital Formation on issues related to small business investors.
.
Internal risk controls
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended—
by inserting after section 4G, as added by this Act, the following:
Internal risk controls
The Commission, in consultation with the Chief Economist, shall develop comprehensive internal risk control mechanisms to safeguard and govern the storage of all market data by the Commission, all market data sharing agreements of the Commission, and all academic research performed at the Commission using market data.
; and
in section 3(a), by adding at the end the following:
Chief Economist
The term Chief Economist
means the Director of the Division of Economic and Risk Analysis, or an employee of the Commission with comparable authority, as determined by the Commission.
.
Applicability of Notice and Comment Requirements of the Administrative Procedure Act to Guidance Voted on by the Commission
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 4H, as added by this Act, the following:
Applicability of Notice and Comment Requirements of the Administrative Procedure Act to Guidance Voted on by the Commission
The notice and comment requirements of section 553 of title 5, United States Code, shall also apply with respect to any Commission statement or guidance, including interpretive rules, general statements of policy, or rules of Commission organization, procedure, or practice, that has the effect of implementing, interpreting, or prescribing law or policy and that is voted on by the Commission.
.
Process for closing investigations
In general
Not later than 180 days after the date of the enactment of this Act, the Securities and Exchange Commission shall establish a process for closing investigations (including preliminary or informal investigations) that is designed to ensure that the Commission, in a timely manner—
makes a determination of whether or not to institute an administrative or judicial action in a matter or refer the matter to the Attorney General for potential criminal prosecution; and
if the Commission determines not to institute such an action or refer the matter to the Attorney General, informs the persons who are the subject of the investigation that the investigation is closed.
Rule of construction
Nothing in this section shall be construed to affect the authority of the Commission to re-open an investigation if the Commission obtains new evidence after the investigation is closed, subject to any applicable statute of limitations.
Enforcement Ombudsman
In general
Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d), as amended by this Act, is further amended by adding at the end the following:
Enforcement Ombudsman
Establishment
The Commission shall have an Enforcement Ombudsman, who shall be appointed by and report directly to the Commission.
Duties
The Enforcement Ombudsman shall—
act as a liaison between the Commission and any person who is the subject of an investigation (including a preliminary or informal investigation) by the Commission or an administrative or judicial action brought by the Commission in resolving problems that such persons may have with the Commission or the conduct of Commission staff; and
establish safeguards to maintain the confidentiality of communications between the persons described in subparagraph (A) and the Enforcement Ombudsman.
Limitation
In carrying out the duties of the Enforcement Ombudsman under paragraph (2), the Enforcement Ombudsman shall utilize personnel of the Commission to the extent practicable. Nothing in this subsection shall be construed as replacing, altering, or diminishing the activities of any ombudsman or similar office of any other agency.
Report
The Enforcement Ombudsman shall submit to the Commission and to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate an annual report that describes the activities and evaluates the effectiveness of the Enforcement Ombudsman during the preceding year.
.
Deadline for initial appointment
The Securities and Exchange Commission shall appoint the initial Enforcement Ombudsman under subsection (i) of section 4 of the Securities Exchange Act of 1934, as added by subsection (a), not later than 180 days after the date of the enactment of this Act.
Process to ensure enforcement actions are within authority of Commission
Not later than 180 days after the date of the enactment of this Act, the Securities and Exchange Commission shall establish a process to ensure that administrative and judicial actions brought by the Commission under the securities laws (as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))) do not exceed the authority of the Commission under such laws and, in the case of administrative actions, are conducted consistently with subchapter II of chapter 5 of title 5, United States Code (commonly referred to as the Administrative Procedure Act
).
Process to permit recipient of Wells notification to appear before Commission staff in-person
In general
Not later than 180 days after the date of the enactment of this Act, the Securities and Exchange Commission shall establish a process under which, in any instance in which the Commission staff provides a written Wells notification to an individual informing the individual that the Commission staff has made a preliminary determination to recommend that the Commission bring an administrative or judicial action against the individual, the individual shall have the right to make an in-person presentation before the Commission staff concerning such recommendation and to be represented by counsel at such presentation, at the individual’s own expense.
Attendance by Commissioners
Such process shall provide that each Commissioner of the Commission, or a designee of the Commissioner, may attend any such presentation.
Report by Commission staff
Such process shall provide that, before any Commission vote on whether to bring the administrative or judicial action against the individual, the Commission staff shall provide to each Commissioner a written report on any such presentation, including any factual or legal arguments made by the individual and any supporting documents provided by the individual.
Publication of enforcement manual
In general
Not later than 1 year after the date of the enactment of this Act, the Securities and Exchange Commission shall approve, by vote of the Commission, and publish an updated manual that sets forth the policies and practices that the Commission will follow in the enforcement of the securities laws (as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))). Such manual shall include policies and practices required by this Act, and by the amendments made by this Act, and shall be developed so as to ensure transparency in such enforcement and uniform application of such laws by the Commission.
Enforcement plan and report
Beginning on the date that is one year after the date of enactment of this Act, and each year thereafter, and the Securities and Exchange Commission shall transmit to Congress and publish on its Internet website an annual enforcement plan and report that shall—
detail the priorities of the Commission with regard to enforcement and examination activities for the forthcoming year;
report on the Commission’s enforcement and examination activities for the previous year, including an assessment of how such activities comported with the priorities identified for that year pursuant to paragraph (1); and
provide an opportunity and mechanism for public comment.
Private parties authorized to compel the Securities and Exchange Commission to seek sanctions by filing civil actions
Title I of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by adding at the end the following:
Private parties authorized to compel the Commission to seek sanctions by filing civil actions
Termination of administrative proceeding
In the case of any person who is a party to a proceeding brought by the Commission under a securities law, to which section 554 of title 5, United States Code, applies, and against whom an order imposing a cease and desist order and a penalty may be issued at the conclusion of the proceeding, that person may, not later than 20 days after receiving notice of such proceeding, and at that person’s discretion, require the Commission to terminate the proceeding.
Civil action authorized
If a person requires the Commission to terminate a proceeding pursuant to subsection (a), the Commission may bring a civil action against that person for the same remedy that might be imposed.
Standard of proof in administrative proceeding
Notwithstanding any other provision of law, in the case of a proceeding brought by the Commission under a securities law, to which section 554 of title 5, United States Code, applies, a legal or equitable remedy may be imposed on the person against whom the proceeding was brought only on a showing by the Commission of clear and convincing evidence that the person has violated the relevant provision of law.
.
Certain findings required to approve civil money penalties against issuers
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 4E the following:
Certain findings required to approve civil money penalties against issuers
The Commission may not seek against or impose on an issuer a civil money penalty for violation of the securities laws unless the publicly available text of the order approving the seeking or imposition of such penalty contains findings, supported by an analysis by the Division of Economic and Risk Analysis and certified by the Chief Economist, of whether—
the alleged violation resulted in direct economic benefit to the issuer; and
the penalty will harm the shareholders of the issuer.
.
Repeal of authority of the Commission to prohibit persons from serving as officers or directors
Under Securities Act of 1933
Subsection (f) of section 8A of the Securities Act of 1933 (15 U.S.C. 77h–1) is repealed.
Under Securities Exchange Act of 1934
Subsection (f) of section 21C of the Securities Exchange Act of 1934 (15 U.S.C. 78u–3) is repealed.
Subpoena duration and renewal
Section 21(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(b)) is amended—
by inserting Subpoena.—
after the enumerator;
by striking For the purpose of
and inserting the following:
In general
For the purpose of
; and
by adding at the end the following:
Omnibus orders of investigation
Duration and renewal
An omnibus order of investigation shall not be for an indefinite duration and may be renewed only by Commission action.
Definition
In paragraph (A), the term omnibus order of investigation
means an order of the Commission authorizing 1 of more members of the Commission or its staff to issue subpoenas under paragraph (1) to multiple persons in relation to a particular subject matter area.
.
Elimination of automatic disqualifications
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), as amended by this Act, is further amended by inserting after section 4F the following:
Elimination of automatic disqualifications
In general
Notwithstanding any other provision of law, a non-natural person may not be disqualified or otherwise made ineligible to use an exemption or registration provision, engage in an activity, or qualify for any similar treatment under a provision of the securities laws or the rules issued by the Commission under the securities laws by reason of having, or a person described in subsection (b) having, been convicted of any felony or misdemeanor or made the subject of any judicial or administrative order, judgment, or decree arising out of a governmental action (including an order, judgment, or decree agreed to in a settlement), or having, or a person described in subsection (b) having, been suspended or expelled from membership in, or suspended or barred from association with a member of, a registered national securities exchange or a registered national or affiliated securities association for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade, unless the Commission, by order, on the record after notice and an opportunity for hearing, makes a determination that such non-natural person should be so disqualified or otherwise made ineligible for purposes of such provision.
Person described
A person is described in this subsection if the person is—
a natural person who is a director, officer, employee, partner, member, or shareholder of the non-natural person referred to in subsection (a) or is otherwise associated or affiliated with such non-natural person in any way; or
a non-natural person who is associated or affiliated with the non-natural person referred to in subsection (a) in any way.
Rule of construction
Nothing in this section shall be construed to limit any authority of the Commission, by order, on the record after notice and an opportunity for hearing, to prohibit a person from using an exemption or registration provision, engaging in an activity, or qualifying for any similar treatment under a provision of the securities laws, or the rules issued by the Commission under the securities laws, by reason of a circumstance referred to in subsection (a) or any similar circumstance.
.
Confidentiality of records obtained from foreign securities and law enforcement authorities
Section 24(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78x(d)) is amended to read as follows:
Records obtained from foreign securities and law enforcement authorities
Except as provided in subsection (g), the Commission shall not be compelled to disclose records obtained from a foreign securities authority, or from a foreign law enforcement authority as defined in subsection (f)(4), if—
the foreign securities authority or foreign law enforcement authority has in good faith determined and represented to the Commission that the records are confidential under the laws of the country of such authority; and
the Commission obtains such records pursuant to—
such procedure as the Commission may authorize for use in connection with the administration or enforcement of the securities laws; or
a memorandum of understanding.
.
Clarification of authority to impose sanctions on persons associated with a broker or dealer
Section 15(b)(6)(A)(i) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(6)(A)(i)) is amended by striking enumerated
and all that follows and inserting enumerated in subparagraph (A), (D), (E), (G), or (H) of paragraph (4) of this subsection;
.
Congressional access to information held by the Public Company Accounting Oversight Board
Section 105(b)(5) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)) is amended—
in subparagraph (A), by striking subparagraphs (B) and (C)
and inserting subparagraphs (B), (C) and (D)
; and
by adding at the end the following:
Availability to the Congressional Committees
The Board shall make available to the Committees specified under section 101(h)—
such information as the Committees shall request; and
with respect to any confidential or privileged information provided in response to a request under clause (i), including any information subject to section 104(g) and subparagraph (A), or any confidential or privileged information provided orally in response to such a request, such information shall maintain the protections provided in subparagraph (A), and shall retain its confidential and privileged status in the hands of the Board and the Committees.
.
Repeal of requirement for Public Company Accounting Oversight Board to use certain funds for merit scholarship program
In general
Section 109(c) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7219(c)) is amended by striking paragraph (2).
Conforming amendments
Section 109 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7219) is amended—
in subsection (c), by striking uses of funds
and all that follows through The budget
and inserting uses of funds.—The budget
; and
in subsection (f), by striking subsection (c)(1)
and inserting subsection (c)
.
Reallocation of fines for violations of rules of municipal securities rulemaking board
In general
Section 15B(c)(9) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–4(c)(9)) is amended to read as follows:
Fines collected for violations of the rules of the Board shall be deposited and credited as general revenue of the Treasury, except as otherwise provided in section 308 of the Sarbanes-Oxley Act of 2002 or section 21F of this title.
.
Effective date
The amendment made by subsection (a) shall apply to fines collected after the date of enactment of this Act.
Eliminating Excessive Government Intrusion in the Capital Markets
Repeal of Department of Labor fiduciary rule and requirements prior to rulemaking relating to standards of conduct for brokers and dealers
Repeal of Department of Labor fiduciary rule
The final rule of the Department of Labor titled Definition of the Term
and related prohibited transaction exemptions published April 8, 2016 (81 Fed. Reg. 20946) shall have no force or effect.Fiduciary
; Conflict of Interest Rule—Retirement Investment Advice
Stay on rules defining certain fiduciaries
After the date of enactment of this Act, the Secretary of Labor shall not prescribe any regulation under the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.) defining the circumstances under which an individual is considered a fiduciary until the date that is 60 days after the Securities and Exchange Commission issues a final rule relating to standards of conduct for brokers and dealers pursuant to the second subsection (k) of section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o(k))
Requirements prior to rulemaking relating to standards of conduct for brokers and dealers
The second subsection (k) of section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o(k)), as added by section 913(g)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301 et seq.), is amended by adding at the end the following:
Requirements prior to rulemaking
The Commission shall not promulgate a rule pursuant to paragraph (1) before providing a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate describing whether—
retail investors (and such other customers as the Commission may provide) are being harmed due to brokers or dealers operating under different standards of conduct than those that apply to investment advisors under section 211 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–11);
alternative remedies will reduce any confusion or harm to retail investors due to brokers or dealers operating under different standards of conduct than those standards that apply to investment advisors under section 211 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–11), including—
simplifying the titles used by brokers, dealers, and investment advisers; and
enhancing disclosure surrounding the different standards of conduct currently applicable to brokers, dealers, and investment advisers;
the adoption of a uniform fiduciary standard of conduct for brokers, dealers, and investment advisors would adversely impact the commissions of brokers and dealers, the availability of proprietary products offered by brokers and dealers, and the ability of brokers and dealers to engage in principal transactions with customers; and
the adoption of a uniform fiduciary standard of conduct for brokers or dealers and investment advisors would adversely impact retail investor access to personalized and cost-effective investment advice, recommendations about securities, or the availability of such advice and recommendations.
Economic analysis
The Commission’s conclusions contained in the report described in paragraph (3) shall be supported by economic analysis.
Requirements for promulgating a rule
The Commission shall publish in the Federal Register alongside the rule promulgated pursuant to paragraph (1) formal findings that such rule would reduce confusion or harm to retail customers (and such other customers as the Commission may by rule provide) due to different standards of conduct applicable to brokers, dealers, and investment advisors.
Requirements under Investment Advisers Act of 1940
In proposing rules under paragraph (1) for brokers or dealers, the Commission shall consider the differences in the registration, supervision, and examination requirements applicable to brokers, dealers, and investment advisors.
.
Exemption from risk retention requirements for nonresidential mortgage
In general
Section 15G of the Securities Exchange Act of 1934 (15 U.S.C. 78o–11) is amended—
in subsection (a)—
in paragraph (3)(B), by striking and
at the end;
in paragraph (4)(B), by striking the period and inserting ; and
; and
by adding at the end the following:
the term asset-backed security
refers only to an asset-backed security that is comprised wholly of residential mortgages.
;
in subsection (b)—
by striking paragraph (1); and
by striking (2) Residential mortgages
;
by striking subsection (h) and redesignating subsection (i) as subsection (h); and
in subsection (h) (as so redesignated)—
by striking effective—
and all that follows through (1) with respect to
and inserting effective with respect to
;
in paragraph (1), by striking ; and
and inserting a period; and
by striking paragraph (2).
Conforming amendment
Section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by striking subsection (c).
Frequency of shareholder approval of executive compensation
Section 14A(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78n–1(a)) is amended—
in paragraph (1), by striking Not less frequently than once every 3 years
and inserting Each year in which there has been a material change to the compensation of executives of an issuer from the previous year
; and
by striking paragraph (2) and redesignating paragraph (3) as paragraph (2).
Requirement for municipal advisor for issuers of municipal securities
Section 15B(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–4(d)) is amended by adding at the end the following:
An issuer of municipal securities shall not be required to retain a municipal advisor prior to issuing any such securities.
.
Small issuer exemption from internal control evaluation
Section 404(c) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262(c)) is amended to read as follows:
Exemption for smaller issuers
Subsection (b) shall not apply with respect to any audit report prepared for an issuer that has total market capitalization of less than $250,000,000, nor to any issuer that is a depository institution with assets of less than $1,000,000,000.
.
Exemptive authority for certain provisions relating to registration of nationally recognized statistical rating organizations
Section 15E of the Securities Exchange Act of 1934 (15 U.S.C. 78o–7) is amended by adding at the end the following:
Commission exemptive authority
The Commission, by rules and regulations upon its own motion, or by order upon application, may conditionally or unconditionally exempt any person from any provision or provisions of this title or of any rule or regulation thereunder, if and to the extent it determines that such rule, regulation, or requirement is creating a barrier to entry into the market for nationally recognized statistical rating organizations or impeding competition among such organizations, or that such an exemption is necessary or appropriate in the public interest and is consistent with the protection of investors.
.
Restriction on recovery of erroneously awarded compensation
Section 10D(b)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 78j–4(b)(2)) is amended by inserting before the period the following: , where such executive officer had control or authority over the financial reporting that resulted in the accounting restatement
.
Risk-Based Examinations of Nationally Recognized Statistical Rating Organizations
Section 15E(p)(3)(B) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–7(p)(3)(B)) is amended in the matter preceding clause (i), by inserting , as appropriate,
after Each examination under subparagraph (A) shall include
.
Repeals
Repeals
The following provisions of title IX of the Dodd-Frank Wall Street Reform and Consumer Protection Act are repealed, and the provisions of law amended or repealed by such sections are restored or revived as if such sections had not been enacted:
Section 912.
Section 914.
Section 917.
Section 918.
Section 919A.
Section 919B.
Section 919C.
Section 921.
Section 929T.
Section 929X.
Section 929Y.
Section 929Z.
Section 931.
Section 933.
Section 937.
Section 939B.
Section 939C.
Section 939D.
Section 939E.
Section 939F.
Section 939G.
Section 939H.
Section 946.
Subsection (b) of section 953.
Section 955.
Section 956.
Section 964.
Section 965.
Section 968.
Section 971.
Section 972.
Section 976.
Section 977.
Section 978.
Section 984.
Section 989.
Section 989A.
Section 989F.
Subsection (b) of section 989G.
Section 989I.
Conforming amendments
The Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301) is amended—
in the table of contents in section 1(b), by striking the items relating to the sections described under paragraphs (1) through (23), (25) through (38), and (40) of subsection (a);
in section 953, by striking (a) Disclosure of pay versus performance.—
; and
in section 989G, by striking (a) Exemption.—
.
Exemption of and reporting by private equity fund advisers
Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3) is amended by adding at the end the following:
Exemption of and reporting by private equity fund advisers
In general
Except as provided in this subsection, no investment adviser shall be subject to the registration or reporting requirements of this title with respect to the provision of investment advice relating to a private equity fund.
Maintenance of records and access by Commission
Not later than 6 months after the date of enactment of this subsection, the Commission shall issue final rules—
to require investment advisers described in paragraph (1) to maintain such records and provide to the Commission such annual or other reports as the Commission, taking into account fund size, governance, investment strategy, risk, and other factors, determines necessary and appropriate in the public interest and for the protection of investors; and
to define the term private equity fund
for purposes of this subsection.
.
Records and reports of private funds
The Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.) is amended—
in section 204(b)—
in paragraph (1)—
in subparagraph (A), by striking investors,
and all that follows and inserting investors.
;
by striking subparagraph (B); and
by striking this title—
and all that follows through to maintain
and inserting this title to maintain
;
in paragraph (3)(H)—
by striking , in consultation with the Council,
; and
by striking or for the assessment of systemic risk
;
in paragraph (4), by striking , or for the assessment of systemic risk
;
in paragraph (5), by striking or for the assessment of systemic risk
;
in paragraph (6)(A)(ii), by striking , or for the assessment of systemic risk
;
by striking paragraph (7) and redesignating paragraphs (8) through (11) as paragraphs (7) through (10), respectively; and
in paragraph (8) (as so redesignated), by striking paragraph (8)
and inserting paragraph (7)
; and
in section 211(e)—
by striking after consultation with the Council but
; and
by striking subsection 204(b)
and inserting section 204(b)
.
Definition of accredited investor
In general
Section 2(a)(15) of the Securities Act of 1933 (15 U.S.C. 77b(a)(15)) is amended—
by redesignating clauses (i) and (ii) as subparagraphs (A) and (F), respectively; and
in subparagraph (A) (as so redesignated), by striking ; or
and inserting a semicolon, and inserting after such subparagraph the following:
any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000 (which amount, along with the amounts set forth in subparagraph (C), shall be adjusted for inflation by the Commission every 5 years to the nearest $10,000 to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics) where, for purposes of calculating net worth under this subparagraph—
the person’s primary residence shall not be included as an asset;
indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and
indebtedness that is secured by the person's primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability;
any natural person who had an individual income in excess of $200,000 in each of the 2 most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;
any natural person who is currently licensed or registered as a broker or investment adviser by the Commission, the Financial Industry Regulatory Authority, or an equivalent self-regulatory organization (as defined in section 3(a)(26) of the Securities Exchange Act of 1934), or the securities division of a State or the equivalent State division responsible for licensing or registration of individuals in connection with securities activities;
any natural person the Commission determines, by regulation, to have demonstrable education or job experience to qualify such person as having professional knowledge of a subject related to a particular investment, and whose education or job experience is verified by the Financial Industry Regulatory Authority or an equivalent self-regulatory organization (as defined in section 3(a)(26) of the Securities Exchange Act of 1934); or
.
Repeal
In general
Section 413 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111–203) is hereby repealed.
Clerical amendment
The table of contents in section 1(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by striking the items relating to section 413.
Repeal of certain provisions requiring a study and report to Congress
Repeal
The following provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act are repealed:
Section 412.
Section 415.
Section 416.
Section 417.
Clerical amendment
The table of contents in section 1(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by striking the items relating to sections 412, 415, 416, and 417.
Technical correction
Section 224 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–18c) is amended by striking Commodities
and inserting Commodity
.
Repeal
Repeal
The following sections of title XV of the Dodd-Frank Wall Street Reform and Consumer Protection Act are repealed, and the provisions of law amended or repealed by such sections are restored or revived as if such sections had not been enacted:
Section 1502.
Section 1503.
Section 1504.
Section 1505.
Section 1506.
Clerical amendment
The table of contents in section 1(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by striking the items relating to sections 1502, 1503, 1504, 1505, and 1506.
Commodity Futures Trading Commission Reforms
Division directors
Section 2(a)(6)(C) of the Commodity Exchange Act (7 U.S.C. 2(a)(6)(C)) is amended by inserting , and the heads of the units shall serve at the pleasure of the Commission
before the period.
Procedures governing actions taken by commission staff
Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 2(a)(12)) is amended—
by striking (12) The
and inserting the following:
Rules and regulations
In general
Subject to the other provisions of this paragraph, the
; and
by adding after and below the end the following new subparagraph:
Notice to commissioners
The Commission shall develop and publish internal procedures governing the issuance by any division or office of the Commission of any response to a formal, written request or petition from any member of the public for an exemptive, a no-action, or an interpretive letter and such procedures shall provide that the commissioners be provided with the final version of the matter to be issued with sufficient notice to review the matter prior to its issuance.
.
Strategic technology plan
Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)), is amended by adding at the end the following:
Strategic technology plan
In general
Every 5 years, the Commission shall develop and submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a detailed plan focused on the acquisition and use of technology by the Commission.
Contents
The plan shall—
include for each related division or office a detailed technology strategy focused on market surveillance and risk detection, market data collection, aggregation, interpretation, standardization, harmonization, normalization, validation, streamlining or other data analytic processes, and internal management and protection of data collected by the Commission, including a detailed accounting of how the funds provided for technology will be used and the priorities that will apply in the use of the funds;
set forth annual goals to be accomplished and annual budgets needed to accomplish the goals; and
include a summary of any plan of action and milestones to address any known information security vulnerability, as identified pursuant to a widely accepted industry or Government standard, including—
specific information about the industry or Government standard used to identify the known information security vulnerability;
a detailed time line with specific deadlines for addressing the known information security vulnerability; and
an update of any such time line and the rationale for any deviation from the time line.
.
Internal risk controls
In general
Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 2(a)(12)), as amended by section 462, is further amended by adding at the end the following:
Internal risk controls
The Commission, in consultation with the Chief Economist, shall develop comprehensive internal risk control mechanisms to safeguard and govern the storage of all market data by the Commission, all market data sharing agreements of the Commission, and all academic research performed at the Commission using market data.
.
Definition of Chief Economist
Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is amended—
by redesignating paragraphs (8) through (51) as paragraphs (9) through (52); and
by inserting after paragraph (7) the following:
Chief Economist
The term Chief Economist
means the Chief Economist of the Commission, or an employee of the Commission with comparable authority, as determined by the Commission.
.
Subpoena duration and renewal
Section 6(c)(5) of the Commodity Exchange Act (7 U.S.C. 9(5)) is amended—
by striking For the purpose of securing
and inserting the following:
In general
For the purpose of securing
; and
by adding after and below the end the following:
Omnibus orders of investigation
Duration and renewal
An omnibus order of investigation shall not be for an indefinite duration and may be renewed only by Commission action.
Definition
In clause (i), the term omnibus order of investigation
means an order of the Commission authorizing 1 of more members of the Commission or its staff to issue subpoenas under subparagraph (A) to multiple persons in relation to a particular subject matter area.
.
Applicability of notice and comment requirements of the administrative procedure act to guidance voted on by the commission
Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 2(a)(12)), as amended by section 464, is further amended by adding at the end the following:
Applicability of notice and comment rules to guidance voted on by the commission
The notice and comment requirements of section 553 of title 5, United States Code, shall also apply with respect to any Commission statement or guidance, including interpretive rules, general statements of policy, or rules of Commission organization, procedure, or practice, that has the effect of implementing, interpreting or prescribing law or policy and that is voted on by the Commission.
.
Judicial review of commission rules
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by adding at the end the following:
Judicial review of commission rules
A person adversely affected by a rule of the Commission promulgated under this Act may obtain review of the rule in the United States Court of Appeals for the District of Columbia Circuit or the United States Court of Appeals for the circuit where the party resides or has the principal place of business, by filing in the court, within 60 days after publication in the Federal Register of the entry of the rule, a written petition requesting that the rule be set aside.
A copy of the petition shall be transmitted forthwith by the clerk of the court to an officer designated by the Commission for that purpose. Thereupon the Commission shall file in the court the record on which the rule complained of is entered, as provided in section 2112 of title 28, United States Code, and the Federal Rules of Appellate Procedure.
On the filing of the petition, the court has jurisdiction, which becomes exclusive on the filing of the record, to affirm and enforce or to set aside the rule in whole or in part.
The court shall affirm and enforce the rule unless the Commission’s action in promulgating the rule is found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; contrary to constitutional right, power, privilege, or immunity; in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; or without observance of procedure required by law.
.
Cross-border regulation of derivatives transactions
Rulemaking required
Within 1 year after the date of the enactment of this subtitle, the Commodity Futures Trading Commission shall issue a rule that addresses—
the nature of the connections to the United States that require a non-United States person to register as a swap dealer or a major swap participant under the Commodity Exchange Act and the regulations issued under such Act;
which of the United States swaps requirements apply to the swap activities of non-United States persons and United States persons and their branches, agencies, subsidiaries, and affiliates outside of the United States, and the extent to which the requirements apply; and
the circumstances under which a United States person or non-United States person in compliance with the swaps regulatory requirements of a foreign jurisdiction shall be exempt from United States swaps requirements.
Content of the rule
Criteria
In the rule, the Commission shall establish criteria for determining that 1 or more categories of the swaps regulatory requirements of a foreign jurisdiction are comparable to and as comprehensive as United States swaps requirements. The criteria shall include—
the scope and objectives of the swaps regulatory requirements of the foreign jurisdiction;
the effectiveness of the supervisory compliance program administered;
the enforcement authority exercised by the foreign jurisdiction; and
such other factors as the Commission, by rule, determines to be necessary or appropriate in the public interest.
Comparability
In the rule, the Commission shall—
provide that any non-United States person or any transaction between 2 non-United States persons shall be exempt from United States swaps requirements if the person or transaction is in compliance with the swaps regulatory requirements of a foreign jurisdiction which the Commission has determined to be comparable to and as comprehensive as United States swaps requirements; and
set forth the circumstances in which a United States person or a transaction between a United States person and a non-United States person shall be exempt from United States swaps requirements if the person or transaction is in compliance with the swaps regulatory requirements of a foreign jurisdiction which the Commission has determined to be comparable to and as comprehensive as United States swaps requirements.
Outcomes-based comparison
In developing and applying the criteria, the Commission shall emphasize the results and outcomes of, rather than the design and construction of, foreign swaps regulatory requirements.
Risk-based rulemaking
In the rule, the Commission shall not take into account, for the purposes of determining the applicability of United States swaps requirements, the location of personnel that arrange, negotiate, or execute swaps.
Preservation of antifraud and antimanipulation authority
No part of any rulemaking under this section shall limit the Commission’s antifraud or antimanipulation authority.
Application of the rule
Assessments of foreign jurisdictions
Beginning on the date on which a final rule is issued under this section, the Commission shall begin to assess the swaps regulatory requirements of foreign jurisdictions, in the order the Commission determines appropriate, in accordance with the criteria established pursuant to subsection (b)(1). Following each assessment, the Commission shall determine, by rule or by order, whether the swaps regulatory requirements of the foreign jurisdiction are comparable to and as comprehensive as United States swaps requirements.
Substituted compliance for unassessed major markets
Beginning 18 months after the date of enactment of this Act—
the swaps regulatory requirements of each of the 8 foreign jurisdictions with the largest swaps markets, as calculated by notional value during the 12-month period ending with such date of enactment, except those with respect to which a determination has been made under paragraph (1), shall be considered to be comparable to and as comprehensive as United States swaps requirements; and
a non-United States person or a transaction between 2 non-United States persons shall be exempt from United States swaps requirements if the person or transaction is in compliance with the swaps regulatory requirements of any of such unexcepted foreign jurisdictions.
Suspension of substituted compliance
If the Commission determines, by rule or by order, that—
the swaps regulatory requirements of a foreign jurisdiction are not comparable to and as comprehensive as United States swaps requirements, using the categories and criteria established under subsection (b)(1);
the foreign jurisdiction does not exempt from its swaps regulatory requirements United States persons who are in compliance with United States swaps requirements; or
the foreign jurisdiction is not providing equivalent recognition of, or substituted compliance for, registered entities (as defined in section 1a(41) of the Commodity Exchange Act) domiciled in the United States,
Petition for review of foreign jurisdiction practices
A registered entity, commercial market participant (as defined in section 1a(7) of the Commodity Exchange Act), or Commission registrant (within the meaning of such Act) who petitions the Commission to make or change a determination under subsection (c)(1) or (c)(3) of this section shall be entitled to expedited consideration of the petition. A petition shall include any evidence or other supporting materials to justify why the petitioner believes the Commission should make or change the determination. Petitions under this section shall be considered by the Commission any time following the enactment of this Act. Within 180 days after receipt of a petition for a rulemaking under this section, the Commission shall take final action on the petition. Within 90 days after receipt of a petition to issue an order or change an order issued under this section, the Commission shall take final action on the petition.
Report to congress
If the Commission makes a determination described in this section through an order, the Commission shall articulate the basis for the determination in a written report published in the Federal Register and transmitted to the Committee on Agriculture of the House of Representatives and Committee on Agriculture, Nutrition, and Forestry of the Senate within 15 days of the determination. The determination shall not be effective until 15 days after the committees receive the report.
Definitions
As used in this section and for purposes of the rules issued pursuant to this section, the following definitions apply:
United states person
The term United States person
—
means—
any natural person resident in the United States;
any partnership, corporation, trust, or other legal person organized or incorporated under the laws of the United States or having its principal place of business in the United States;
any account (whether discretionary or non-discretionary) of a United States person; and
any other person as the Commission may further define to more effectively carry out the purposes of this section; and
does not include the International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the United Nations, their agencies or pension plans, or any other similar international organizations or their agencies or pension plans.
United states swaps requirements
The term United States swaps requirements
means the provisions relating to swaps contained in the Commodity Exchange Act (7 U.S.C. 1a et seq.) that were added by title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 8301 et seq.) and any rules or regulations prescribed by the Commodity Futures Trading Commission pursuant to such provisions.
Foreign jurisdiction
The term foreign jurisdiction
means any national or supranational political entity with common rules governing swaps transactions.
Swaps regulatory requirements
The term swaps regulatory requirements
means any provisions of law, and any rules or regulations pursuant to the provisions, governing swaps transactions or the counterparties to swaps transactions.
Conforming amendment
Section 4(c)(1)(A) of the Commodity Exchange Act (7 U.S.C. 6(c)(1)(A)) is amended by inserting or except as necessary to effectuate the purposes of the Commodity End-User Relief Act,
after to grant exemptions,
.
Harmonization of Derivatives Rules
Agency review and harmonization of rules relating to the regulation of over-the-counter swaps markets
The Securities and Exchange Commission and the Commodity Futures Trading Commission shall review each rule, order, and interpretive guidance issued by either such Commission pursuant to title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 8301 et seq.) and, where the Commissions find inconsistencies in any such rules, orders, or interpretive guidance, shall jointly issue new rules, orders, or interpretive guidance to resolve such inconsistencies.
Improving Insurance Coordination through an Independent Advocate
Repeal of the Federal Insurance Office; Creation of the Office of the Independent Insurance Advocate
Establishment
Section 313 of title 31, United States Code, is amended to read as follows:
Office of the Independent Insurance Advocate
Establishment
There is established in the Department of the Treasury a bureau to be known as the Office of the Independent Insurance Advocate (in this section referred to as the Office
).
Independent insurance advocate
Establishment of position
The chief officer of the Office of the Independent Insurance Advocate shall be known as the Independent Insurance Advocate. The Independent Insurance Advocate shall perform the duties of such office under the general direction of the Secretary of the Treasury.
Appointment
The Independent Insurance Advocate shall be appointed by the President, by and with the advice and consent of the Senate, from among persons having insurance expertise.
Term
In general
The Independent Insurance Advocate shall serve a term of 6 years, unless sooner removed by the President upon reasons which shall be communicated to the Senate.
Service after expiration
If a successor is not nominated and confirmed by the end of the term of service of the Independent Insurance Advocate, the person serving as Independent Insurance Advocate shall continue to serve until such time a successor is appointed and confirmed.
Vacancy
An Independent Insurance Advocate who is appointed to serve the remainder of a predecessor’s uncompleted term shall be eligible thereafter to be appointed to a full 6 year term.
Acting official on Financial Stability Oversight Council
In the event of a vacancy in the office of the Independent Insurance Advocate, and pending the appointment and confirmation of a successor, or during the absence or disability of the Independent Insurance Advocate, the Independent Member shall appoint a federal official appointed by the President and confirmed by the Senate from a member agency of the Financial Stability Oversight Council, not otherwise serving on the Council, who shall serve as a member of the Council and act in the place of the Independent Insurance Advocate until such vacancy, absence, or disability concludes.
Employment
The Independent Insurance Advocate shall be an employee of the Federal Government within the definition of employee under section 2105 of title 5, United States Code.
Independence; oversight
Independence
The Secretary of the Treasury may not delay or prevent the issuance of any rule or the promulgation of any regulation by the Independent Insurance Advocate, and may not intervene in any matter or proceeding before the Independent Insurance Advocate, unless otherwise specifically provided by law.
Oversight by Inspector General
The Office of the Independent Insurance Advocate shall be an office in the establishment of the Department of the Treasury for purposes of the Inspector General Act of 1978 (5 U.S.C. App.).
Retention of Existing State Regulatory Authority
Nothing in this section or section 314 shall be construed to establish or provide the Office or the Department of the Treasury with general supervisory or regulatory authority over the business of insurance.
Budget
Annual transmittal
For each fiscal year, the Independent Insurance Advocate shall transmit a budget estimate and request to the Secretary of the Treasury, which shall specify the aggregate amount of funds requested for such fiscal year for the operations of the Office of the Independent Insurance Advocate.
Inclusions
In transmitting the proposed budget to the President for approval, the Secretary of the Treasury shall include—
an aggregate request for the Independent Insurance Advocate; and
any comments of the Independent Insurance Advocate with respect to the proposal.
President’s budget
The President shall include in each budget of the United States Government submitted to the Congress—
a separate statement of the budget estimate prepared in accordance with paragraph (1);
the amount requested by the President for the Independent Insurance Advocate; and
any comments of the Independent Insurance Advocate with respect to the proposal if the Independent Insurance Advocate concludes that the budget submitted by the President would substantially inhibit the Independent Insurance Advocate from performing the duties of the office.
Assistance
The Secretary of the Treasury shall provide the Independent Insurance Advocate such services, funds, facilities and other support services as the Independent Insurance Advocate may request and as the Secretary may approve.
Personnel
Employees
The Independent Insurance Advocate may fix the number of, and appoint and direct, the employees of the Office, in accordance with the applicable provisions of title 5, United States Code. The Independent Insurance Advocate is authorized to employ attorneys, analysts, economists, and other employees as may be deemed necessary to assist the Independent Insurance Advocate to carry out the duties and functions of the Office. Unless otherwise provided expressly by law, any individual appointed under this paragraph shall be an employee as defined in section 2105 of title 5, United States Code, and subject to the provisions of such title and other laws generally applicable to the employees of the Executive Branch.
Compensation
Employees of the Office shall be paid in accordance with the provisions of chapter 51 and subchapter III of chapter 53 of title 5, United States Code, relating to classification and General Schedule pay rates.
Procurement of temporary and intermittent services
The Independent Insurance Advocate may procure temporary and intermittent services under section 3109(b) of title 5, United States Code, at rates for individuals which do not exceed the daily equivalent of the annual rate of basic pay prescribed for Level V of the Executive Schedule under section 5316 of such title.
Details
Any employee of the Federal Government may be detailed to the Office with or without reimbursement, and such detail shall be without interruption or loss of civil service status or privilege. An employee of the Federal Government detailed to the Office shall report to and be subject to oversight by the Independent Insurance Advocate during the assignment to the office, and may be compensated by the branch, department, or agency from which the employee was detailed.
Intergovernmental personnel
The Independent Insurance Advocate may enter into agreements under subchapter VI of chapter 33 of title 5, United States Code, with State and local governments, institutions of higher education, Indian tribal governments, and other eligible organizations for the assignment of intermittent, part-time, and full-time personnel, on a reimbursable or non-reimbursable basis.
Ethics
Designated ethics official
The Legal Counsel of the Financial Stability Oversight Council, or in the absence of a Legal Counsel of the Council, the designated ethics official of any Council member agency, as chosen by the Independent Insurance Advocate, shall be the ethics official for the Independent Insurance Advocate.
Restriction on representation
In addition to any restriction under section 205(c) of title18, United States Code, except as provided in subsections (d) through (i) of section 205 of such title, the Independent Insurance Advocate (except in the proper discharge of official duties) shall not, with or without compensation, represent anyone to or before any officer or employee of—
the Financial Stability Oversight Council on any matter; or
the Department of Justice with respect to litigation involving a matter described in subparagraph (A).
Compensation for services provided by another
For purposes of section 203 of title 18, United States Code, and if a special government employee—
the Independent Insurance Advocate shall not be subject to the restrictions of subsection (a)(1) of section 203,of title 18, United States Code, for sharing in compensation earned by another for representations on matters covered by such section; and
a person shall not be subject to the restrictions of subsection (a)(2) of such section for sharing such compensation with the Independent Insurance Advocate.
Advisory, technical, and professional committees
The Independent Insurance Advocate may appoint such special advisory, technical, or professional committees as may be useful in carrying out the functions of the Office and the members of such committees may be staff of the Office, or other persons, or both.
Mission and functions
Mission
In carrying out the functions under this subsection, the mission of the Office shall be to act as an independent advocate on behalf of the interests of United States policyholders on prudential aspects of insurance matters of importance, and to provide perspective on protecting their interests, separate and apart from any other Federal agency or State insurance regulator.
Office
The Office shall have the authority—
to coordinate Federal efforts on prudential aspects of international insurance matters, including representing the United States, as appropriate, in the International Association of Insurance Supervisors (or a successor entity) and assisting the Secretary in negotiating covered agreements (as such term is defined in subsection (q)) in coordination with States (including State insurance commissioners) and the United States Trade Representative;
to consult with the States (including State insurance regulators) regarding insurance matters of national importance and prudential insurance matters of international importance;
to assist the Secretary in administering the Terrorism Insurance Program established in the Department of the Treasury under the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note);
to observe all aspects of the insurance industry, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis in the insurance industry or the United States financial system; and
to make determinations and exercise the authority under subsection (m) with respect to covered agreements and State insurance measures.
Membership on Financial Stability Oversight Council
In general
The Independent Insurance Advocate shall serve, pursuant to section 111(b)(1)(J) of the Financial Stability Act of 2010 (12 U.S.C. 5321(b)(1)(J)), as a member on the Financial Stability Oversight Council.
Authority
To assist the Financial Stability Oversight Council with its responsibilities to monitor international insurance developments, advise the Congress, and make recommendations, the Independent Insurance Advocate shall have the authority—
to regularly consult with international insurance supervisors and international financial stability counterparts;
to consult with the Board of Governors of the Federal Reserve System and the States with respect to representing the United States, as appropriate, in the International Association of Insurance Supervisors (including to become a non-voting member thereof), particularly on matters of systemic risk;
to participate at the Financial Stability Board of The Group of Twenty and to join with other members from the United States including on matters related to insurance; and
to participate with the United States delegation to the Organization for Economic Cooperation and Development and observe and participate at the Insurance and Private Pensions Committee.
Limitations on participation in supervisory colleges
The Office may not engage in any activities that it is not specifically authorized to engage in under this section or any other provision of law, including participation in any supervisory college or other meetings or fora for cooperation and communication between the involved insurance supervisors established for the fundamental purpose of facilitating the effectiveness of supervision of entities which belong to an insurance group.
Scope
The authority of the Office as specified and limited in this section shall extend to all lines of insurance except—
health insurance, as determined by the Secretary in coordination with the Secretary of Health and Human Services based on section 2791 of the Public Health Service Act (42 U.S.C. 300gg-91);
long-term care insurance, except long-term care insurance that is included with life or annuity insurance components, as determined by the Secretary in coordination with the Secretary of Health and Human Services, and in the case of long-term care insurance that is included with such components, the Secretary shall coordinate with the Secretary of Health and Human Services in performing the functions of the Office; and
crop insurance, as established by the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
Access to information
In carrying out the functions required under subsection (j), the Office may coordinate with any relevant Federal agency and any State insurance regulator (or other relevant Federal or State regulatory agency, if any, in the case of an affiliate of an insurer) and any publicly available sources for the provision to the Office of publicly available information. Notwithstanding any other provision of law, each such relevant Federal agency and State insurance regulator or other Federal or State regulatory agency is authorized to provide to the Office such data or information.
Preemption pursuant to covered agreements
Standards
A State insurance measure shall be preempted pursuant to this section or section 314 if, and only to the extent that the Independent Insurance Advocate determines, in accordance with this subsection, that the measure—
results in less favorable treatment of a non-United States insurer domiciled in a foreign jurisdiction that is subject to a covered agreement than a United States insurer domiciled, licensed, or otherwise admitted in that State; and
is inconsistent with a covered agreement.
Determination
Notice of potential inconsistency
Before making any determination under paragraph (1), the Independent Insurance Advocate shall—
notify and consult with the appropriate State regarding any potential inconsistency or preemption;
notify and consult with the United States Trade Representative regarding any potential inconsistency or preemption;
cause to be published in the Federal Register notice of the issue regarding the potential inconsistency or preemption, including a description of each State insurance measure at issue and any applicable covered agreement;
provide interested parties a reasonable opportunity to submit written comments to the Office; and
consider any comments received.
Scope of review
For purposes of this subsection, any determination of the Independent Insurance Advocate regarding State insurance measures, and any preemption under paragraph (1) as a result of such determination, shall be limited to the subject matter contained within the covered agreement involved and shall achieve a level of protection for insurance or reinsurance consumers that is substantially equivalent to the level of protection achieved under State insurance or reinsurance regulation.
Notice of determination of inconsistency
Upon making any determination under paragraph (1), the Director shall—
notify the appropriate State of the determination and the extent of the inconsistency;
establish a reasonable period of time, which shall not be less than 30 days, before the determination shall become effective; and
notify the Committees on Financial Services and Ways and Means of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and Finance of the Senate.
Notice of effectiveness
Upon the conclusion of the period referred to in paragraph (2)(C)(ii), if the basis for such determination still exists, the determination shall become effective and the Independent Insurance Advocate shall—
cause to be published a notice in the Federal Register that the preemption has become effective, as well as the effective date; and
notify the appropriate State.
Limitation
No State may enforce a State insurance measure to the extent that such measure has been preempted under this subsection.
Applicability of Administrative Procedures Act
Determinations of inconsistency made pursuant to paragraph (2) shall be subject to the applicable provisions of subchapter II of chapter 5 of title 5, United States Code (relating to administrative procedure), and chapter 7 of such title (relating to judicial review), except that in any action for judicial review of a determination of inconsistency, the court shall determine the matter de novo.
Consultation
The Independent Insurance Advocate shall consult with State insurance regulators, individually or collectively, to the extent the Independent Insurance Advocate determines appropriate, in carrying out the functions of the Office.
Notices and requests for comment
In addition to the other functions and duties specified in this section, the Independent Insurance Advocate may prescribe such notices and requests for comment in the Federal Register as are deemed necessary related to and governing the manner in which the duties and authorities of the Independent Insurance Advocate are carried out;
Savings Provisions
Nothing in this section shall—
preempt—
any State insurance measure that governs any insurer's rates, premiums, underwriting, or sales practices;
any State coverage requirements for insurance;
the application of the antitrust laws of any State to the business of insurance; or
any State insurance measure governing the capital or solvency of an insurer, except to the extent that such State insurance measure results in less favorable treatment of a non-United State insurer than a United States insurer; or
affect the preemption of any State insurance measure otherwise inconsistent with and preempted by Federal law.
Retention of Authority of Federal Financial Regulatory Agencies
Nothing in this section or section 314 shall be construed to limit the authority of any Federal financial regulatory agency, including the authority to develop and coordinate policy, negotiate, and enter into agreements with foreign governments, authorities, regulators, and multinational regulatory committees and to preempt State measures to affect uniformity with international regulatory agreements.
Retention of Authority of United States Trade Representative
Nothing in this section or section 314 shall be construed to affect the authority of the Office of the United States Trade Representative pursuant to section 141 of the Trade Act of 1974 (19 U.S.C. 2171) or any other provision of law, including authority over the development and coordination of United States international trade policy and the administration of the United States trade agreements program.
Congressional testimony
The Independent Insurance Advocate shall appear before the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs at semi-annual hearings and shall provide testimony, which shall include submitting written testimony in advance of such appearances to such committees and to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate, on the following matters:
Office activities
The efforts, activities, objectives, and plans of the Office.
Section 313(l) actions
Any actions taken by the Office pursuant to subsection (l) (regarding preemption pursuant to covered agreements).
Insurance industry
The state of, and developments in, the insurance industry.
U.S. and global insurance and reinsurance markets
The breadth and scope of the global insurance and reinsurance markets and the critical role such markets plays in supporting insurance in the United States and the ongoing impacts of part II of the Nonadmitted and Reinsurance Reform Act of 2010 on the ability of State regulators to access reinsurance information for regulated companies in their jurisdictions.
Other
Any other matters as deemed relevant by the Independent Insurance Advocate or requested by such Committees.
Report upon end of term of office
Not later than two months prior to the expiration of the term of office, or discontinuation of service, of each individual serving as the Independent Insurance Advocate, the Independent Insurance Advocate shall submit a report to the Committees on Financial Services and Ways and Means of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and Finance of the Senate setting forth recommendations regarding the Financial Stability Oversight Council and the role, duties, and functions of the Independent Insurance Advocate.
Definitions
In this section and section 314, the following definitions shall apply:
Affiliate
The term affiliate
means, with respect to an insurer, any person who controls, is controlled by, or is under common control with the insurer.
Covered agreement
The term covered agreement
means a written bilateral or multilateral agreement regarding prudential measures with respect to the business of insurance or reinsurance that—
is entered into between the United States and one or more foreign governments, authorities, or regulatory entities; and
relates to the recognition of prudential measures with respect to the business of insurance or reinsurance that achieves a level of protection for insurance or reinsurance consumers that is substantially equivalent to the level of protection achieved under State insurance or reinsurance regulation.
Insurer
The term insurer
means any person engaged in the business of insurance, including reinsurance.
Federal financial regulatory agency
The term Federal financial regulatory agency
means the Department of the Treasury, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, or the National Credit Union Administration.
Financial Stability Oversight Council
The term Financial Stability Oversight Council
means the Financial Stability Oversight Council established under section 111(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5321(a)).
Member agency
The term member agency
has the meaning given such term in section 111(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5321(a)).
Non-United States insurer
The term non-United States insurer
means an insurer that is organized under the laws of a jurisdiction other than a State, but does not include any United States branch of such an insurer.
Office
The term Office
means the Office of the Independent Insurance Advocate established by this section.
State insurance measure
The term State insurance measure
means any State law, regulation, administrative ruling, bulletin, guideline, or practice relating to or affecting prudential measures applicable to insurance or reinsurance.
State insurance regulator
The term State insurance regulator
means any State regulatory authority responsible for the supervision of insurers.
Substantially equivalent to the level of protection achieved
The term substantially equivalent to the level of protection achieved
means the prudential measures of a foreign government, authority, or regulatory entity achieve a similar outcome in consumer protection as the outcome achieved under State insurance or reinsurance regulation.
United States insurer
The term United States insurer
means—
an insurer that is organized under the laws of a State; or
a United States branch of a non-United States insurer.
.
Pay at Level III of Executive Schedule
Section 5314 of title 5, United States Code, is amended by adding at the end the following new item:
Independent Insurance Advocate, Department of the Treasury.
.
Voting member of FSOC
Paragraph (1) of section 111(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5321(b)(1)) is amended by striking subparagraph (J) and inserting the following new subparagraph:
the Independent Insurance Advocate appointed pursuant to section 313 of title 31, United States Code.
.
Independence
Section 111 of Public Law 93–495 (12 U.S.C. 250) is amended—
by inserting the Independent Insurance Advocate of the Department of the Treasury,
after Federal Housing Finance Agency,
; and
by inserting or official
before submitting them
.
Transfer of employees
All employees of the Department of Treasury who are performing staff functions for the independent member of the Financial Stability Oversight Council under section 111(b)(2)(J) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5321(b)(2)(J)) on a full-time equivalent basis as of the date of enactment of this Act shall be eligible for transfer to the Office of the Independent Insurance Advocate established pursuant to the amendment made by subsection (a) of this section for appointment as an employee and shall be transferred at the joint discretion of the Independent Insurance Advocate and the eligible employee. Any employee eligible for transfer that is not appointed within 360 days from the date of enactment of this Act shall be eligible for detail under section 313(f)(4) of title 31, United States Code.
Temporary service; transition
Notwithstanding the amendment made by subsection (a) of this section, during the period beginning on the date of the enactment of this Act and ending on the date on which the Independent Insurance Advocate is appointed and confirmed pursuant to section 313(b)(2) of title 31, United States Code, as amended by such amendment, the person serving, on such date of enactment, as the independent member of the Financial Stability Oversight Council pursuant to section 111(b)(1)(J) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5321(b)(1)(J)) shall act for all purposes as, and with the full powers of, the Independent Insurance Advocate.
Comparability in compensation schedules
Subsection (a) of section 1206 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b(a)) is amended by inserting and the Office of the Independent Insurance Advocate of the Department of the Treasury,
after Farm Credit Administration,
.
Senior executives
Subparagraph (D) of section 3132(a)(1) of title 5, United States Code, is amended by inserting the Office of the Independent Insurance Advocate of the Department of the Treasury,
after Finance Agency,
.
Treatment of covered agreements
Subsection (c) of section 314 of title 31, United States Code is amended—
by designating paragraphs (1) and (2) as paragraphs (2) and (3), respectively; and
by inserting before paragraph (2), as so redesignated, the following new paragraph:
the Secretary of the Treasury and the United States Trade Representative have caused to be published in the Federal Register, and made available for public comment for a period of not fewer than 30 days and not greater than 90 days (which period may run concurrently with the 90-day period for the covered agreement referred to in paragraph (3)), the proposed text of the covered agreement;
.
Demanding Accountability from Financial Regulators and Devolving Power Away from Washington
Cost-Benefit Analyses
Definitions
As used in this subtitle—
the term agency means the Board of Governors of the Federal Reserve System, the Consumer Financial Opportunity Commission, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Office of the Comptroller of the Currency, the National Credit Union Administration, and the Securities and Exchange Commission;
the term chief economist means—
with respect to the Board of Governors of the Federal Reserve System, the Director of the Division of Research and Statistics, or an employee of the agency with comparable authority;
with respect to the Consumer Financial Opportunity Commission, the Head of the Office of Economic Analysis, or an employee of the agency with comparable authority;
with respect to the Commodity Futures Trading Commission, the Chief Economist, or an employee of the agency with comparable authority;
with respect to the Federal Deposit Insurance Corporation, the Director of the Division of Insurance and Research, or an employee of the agency with comparable authority;
with respect to the Federal Housing Finance Agency, the Chief Economist, or an employee of the agency with comparable authority;
with respect to the Office of the Comptroller of the Currency, the Director for Policy Analysis, or an employee of the agency with comparable authority;
with respect to the National Credit Union Administration, the Chief Economist, or an employee of the agency with comparable authority; and
with respect to the Securities and Exchange Commission, the Director of the Division of Economic and Risk Analysis, or an employee of the agency with comparable authority;
the term Council means the Chief Economists Council established under section 618; and
the term regulation—
means an agency statement of general applicability and future effect that is designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency, including rules, orders of general applicability, interpretive releases, and other statements of general applicability that the agency intends to have the force and effect of law; and
does not include—
a regulation issued in accordance with the formal rulemaking provisions of section 556 or 557 of title 5, United States Code;
a regulation that is limited to agency organization, management, or personnel matters;
a regulation promulgated pursuant to statutory authority that expressly prohibits compliance with this provision;
a regulation that is certified by the agency to be an emergency action, if such certification is published in the Federal Register;
a regulation that is promulgated by the Board of Governors of the Federal Reserve System or the Federal Open Market Committee under section 10A, 10B, 13, 13A, or 19 of the Federal Reserve Act, or any of subsections (a) through (f) of section 14 of that Act; or
a regulation filed with the Commission by a self-regulatory organization—
that meet the criteria for immediate effectiveness under section 240.19b-4(f) of title 17, Code of Federal Regulations; and
for which the self-regulatory organization has itself conducted the cost-benefit analysis and otherwise complied with the requirements of section 612.
Required regulatory analysis
Requirements for notices of proposed rulemaking
An agency may not issue a notice of proposed rulemaking unless the agency includes in the notice of proposed rulemaking an analysis that contains, at a minimum, with respect to each regulation that is being proposed—
an identification of the need for the regulation and the regulatory objective, including identification of the nature and significance of the market failure, regulatory failure, or other problem that necessitates the regulation;
an explanation of why the private market or State, local, or tribal authorities cannot adequately address the identified market failure or other problem;
an analysis of the adverse impacts to regulated entities, other market participants, economic activity, or agency effectiveness that are engendered by the regulation and the magnitude of such adverse impacts;
a quantitative and qualitative assessment of all anticipated direct and indirect costs and benefits of the regulation (as compared to a benchmark that assumes the absence of the regulation), including—
compliance costs;
effects on economic activity, net job creation (excluding jobs related to ensuring compliance with the regulation), efficiency, competition, and capital formation;
regulatory administrative costs; and
costs imposed by the regulation on State, local, or tribal governments or other regulatory authorities;
if quantified benefits do not outweigh quantitative costs, a justification for the regulation;
an identification and assessment of all available alternatives to the regulation, including modification of an existing regulation or statute, together with—
an explanation of why the regulation meets the objectives of the regulation more effectively than the alternatives, and if the agency is proposing multiple alternatives, an explanation of why a notice of proposed rulemaking, rather than an advanced notice of proposed rulemaking, is appropriate; and
if the regulation is not a pilot program, an explanation of why a pilot program is not appropriate;
if the regulation specifies the behavior or manner of compliance, an explanation of why the agency did not instead specify performance objectives;
an assessment of how the burden imposed by the regulation will be distributed among market participants, including whether consumers, investors, or small businesses will be disproportionately burdened;
an assessment of the extent to which the regulation is inconsistent, incompatible, or duplicative with the existing regulations of the agency or those of other domestic and international regulatory authorities with overlapping jurisdiction;
a description of any studies, surveys, or other data relied upon in preparing the analysis;
an assessment of the degree to which the key assumptions underlying the analysis are subject to uncertainty; and
an explanation of predicted changes in market structure and infrastructure and in behavior by market participants, including consumers and investors, assuming that they will pursue their economic interests.
Requirements for notices of final rulemaking
In general
Notwithstanding any other provision of law, an agency may not issue a notice of final rulemaking with respect to a regulation unless the agency—
has issued a notice of proposed rulemaking for the relevant regulation;
has conducted and includes in the notice of final rulemaking an analysis that contains, at a minimum, the elements required under subsection (a); and
includes in the notice of final rulemaking regulatory impact metrics selected by the chief economist to be used in preparing the report required pursuant to section 615.
Consideration of comments
The agency shall incorporate in the elements described in paragraph (1)(B) the data and analyses provided to the agency by commenters during the comment period, or explain why the data or analyses are not being incorporated.
Comment period
An agency shall not publish a notice of final rulemaking with respect to a regulation, unless the agency—
has allowed at least 90 days from the date of publication in the Federal Register of the notice of proposed rulemaking for the submission of public comments; or
includes in the notice of final rulemaking an explanation of why the agency was not able to provide a 90-day comment period.
Prohibited Rules
In general
An agency may not publish a notice of final rulemaking if the agency, in its analysis under paragraph (1)(B), determines that the quantified costs are greater than the quantified benefits under subsection (a)(5).
Publication of Analysis
If the agency is precluded by subparagraph (A) from publishing a notice of final rulemaking, the agency shall publish in the Federal Register and on the public website of the agency its analysis under paragraph (1)(B), and provide the analysis to each House of Congress.
Congressional waiver
If the agency is precluded by subparagraph (A) from publishing a notice of final rulemaking, Congress, by joint resolution pursuant to the procedures set forth for joint resolutions in section 802 of title 5, United States Code, may direct the agency to publish a notice of final rulemaking notwithstanding the prohibition contained in subparagraph (A). In applying section 802 of title 5, United States Code, for purposes of this paragraph, section 802(e)(2) shall not apply and the terms—
joint resolution or joint resolution described in subsection (a) means only a joint resolution introduced during the period beginning on the submission or publication date and ending 60 days thereafter (excluding days either House of Congress is adjourned for more than 3 days during a session of Congress), the matter after the resolving clause of which is as follows: “That Congress directs, notwithstanding the prohibition contained in section 612(b)(4)(A) of the Financial CHOICE Act of 2016, the __ to publish the notice of final rulemaking for the regulation or regulations that were the subject of the analysis submitted by the __ to Congress on __.” (The blank spaces being appropriately filled in.); and
submission or publication date means—
the date on which the analysis under paragraph (1)(B) is submitted to Congress under paragraph (4)(B); or
if the analysis is submitted to Congress less than 60 session days or 60 legislative days before the date on which the Congress adjourns a session of Congress, the date on which the same or succeeding Congress first convenes its next session.
Rule of construction
For purposes of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), obtaining, causing to be obtained, or soliciting information for purposes of complying with section 612 with respect to a proposed rulemaking shall not be construed to be a collection of information, provided that the agency has first issued an advanced notice of proposed rulemaking in connection with the regulation, identifies that advanced notice of proposed rulemaking in its solicitation of information, and informs the person from whom the information is obtained or solicited that the provision of information is voluntary.
Public availability of data and regulatory analysis
In general
At or before the commencement of the public comment period with respect to a regulation, the agency shall make available on its public website sufficient information about the data, methodologies, and assumptions underlying the analyses performed pursuant to section 612 so that the analytical results of the agency are capable of being substantially reproduced, subject to an acceptable degree of imprecision or error.
Confidentiality
The agency shall comply with subsection (a) in a manner that preserves the confidentiality of nonpublic information, including confidential trade secrets, confidential commercial or financial information, and confidential information about positions, transactions, or business practices.
Five-year regulatory impact analysis
In general
Not later than 5 years after the date of publication in the Federal Register of a notice of final rulemaking, the chief economist of the agency shall issue a report that examines the economic impact of the subject regulation, including the direct and indirect costs and benefits of the regulation.
Regulatory impact metrics
In preparing the report required by subsection (a), the chief economist shall employ the regulatory impact metrics included in the notice of final rulemaking pursuant to section 612(b)(1)(C).
Reproducibility
The report shall include the data, methodologies, and assumptions underlying the evaluation so that the agency’s analytical results are capable of being substantially reproduced, subject to an acceptable degree of imprecision or error.
Confidentiality
The agency shall comply with subsection (c) in a manner that preserves the confidentiality of nonpublic information, including confidential trade secrets, confidential commercial or financial information, and confidential information about positions, transactions, or business practices.
Report
The agency shall submit the report required by subsection (a) to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives and post it on the public website of the agency. The Commodity Futures Trading Commission shall also submit its report to the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee on Agriculture of the House of Representatives.
Retrospective review of existing rules
Regulatory improvement plan
Not later than 1 year after the date of enactment of this Act and every 5 years thereafter, each agency shall develop, submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, and post on the public website of the agency a plan, consistent with law and its resources and regulatory priorities, under which the agency will modify, streamline, expand, or repeal existing regulations so as to make the regulatory program of the agency more effective or less burdensome in achieving the regulatory objectives. The Commodity Futures Trading Commission shall also submit its plan to the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee on Agriculture of the House of Representatives.
Implementation progress report
Two years after the date of submission of each plan required under subsection (a), each agency shall develop, submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, and post on the public website of the agency a report of the steps that it has taken to implement the plan, steps that remain to be taken to implement the plan, and, if any parts of the plan will not be implemented, reasons for not implementing those parts of the plan. The Commodity Futures Trading Commission shall also submit its plan to the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee on Agriculture of the House of Representatives.
Judicial review
In general
Notwithstanding any other provision of law, during the period beginning on the date on which a notice of final rulemaking for a regulation is published in the Federal Register and ending 1 year later, a person that is adversely affected or aggrieved by the regulation is entitled to bring an action in the United States Court of Appeals for the District of Columbia Circuit for judicial review of agency compliance with the requirements of section 612.
Stay
The court may stay the effective date of the regulation or any provision thereof.
Relief
If the court finds that an agency has not complied with the requirements of section 612, the court shall vacate the subject regulation, unless the agency shows by clear and convincing evidence that vacating the regulation would result in irreparable harm. Nothing in this section affects other limitations on judicial review or the power or duty of the court to dismiss any action or deny relief on any other appropriate legal or equitable ground.
Chief Economists Council
Establishment
There is established the Chief Economists Council.
Membership
The Council shall consist of the chief economist of each agency. The members of the Council shall select the first chairperson of the Council. Thereafter the position of Chairperson shall rotate annually among the members of the Council.
Meetings
The Council shall meet at the call of the Chairperson, but not less frequently than quarterly.
Report
One year after the effective date of this Act and annually thereafter, the Council shall prepare and submit to the Committee on Banking, Housing, and Urban Affairs and the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee on Financial Services and the Committee on Agriculture of the House of Representatives a report on—
the benefits and costs of regulations adopted by the agencies during the past 12 months;
the regulatory actions planned by the agencies for the upcoming 12 months;
the cumulative effect of the existing regulations of the agencies on economic activity, innovation, international competitiveness of entities regulated by the agencies, and net job creation (excluding jobs related to ensuring compliance with the regulation);
the training and qualifications of the persons who prepared the cost-benefit analyses of each agency during the past 12 months;
the sufficiency of the resources available to the chief economists during the past 12 months for the conduct of the activities required by this subtitle; and
recommendations for legislative or regulatory action to enhance the efficiency and effectiveness of financial regulation in the United States.
Conforming amendments
Section 15(a) of the Commodity Exchange Act (7 U.S.C. 19(a)) is amended—
by striking paragraph (1);
in paragraph (2), by striking (2)
and all that follows through light of—
and inserting the following:
Considerations
Before promulgating a regulation under this chapter or issuing an order (except as provided in paragraph (2)), the Commission shall take into consideration—
;
in paragraph (1), as so redesignated—
in subparagraph (B), by striking futures
and inserting the relevant
;
in subparagraph (C), by adding and
at the end;
in subparagraph (D), by striking ; and
and inserting a period; and
by striking subparagraph (E); and
by redesignating paragraph (3) as paragraph (2).
Other regulatory entities
Securities and Exchange Commission
Not later than 1 year after the date of enactment of this Act, the Securities and Exchange Commission shall provide to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report setting forth a plan for subjecting the Public Company Accounting Oversight Board, the Municipal Securities Rulemaking Board, and any national securities association registered under section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o–4(a)) to the requirements of this subtitle, other than direct representation on the Council.
Commodity Futures Trading Commission
Not later than 1 year after the date of enactment of this Act, the Commodity Futures Trading Commission shall provide to the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Financial Services of the House of Representatives, the Committee on Agriculture, Nutrition, and Forestry of the Senate, and the Committee on Agriculture of the House of Representatives a report setting forth a plan for subjecting any futures association registered under section 17 of the Commodity Exchange Act (7 U.S.C. 21) to the requirements of this subtitle, other than direct representation on the Council.
Avoidance of duplicative or unnecessary analyses
An agency may perform the analyses required by this subtitle in conjunction with, or as a part of, any other agenda or analysis required by any other provision of law, if such other analysis satisfies the provisions of this subtitle.
Congressional Review of Federal Financial Agency Rulemaking
Congressional review
Before a rule may take effect, a Federal financial agency shall publish in the Federal Register a list of information on which the rule is based, including data, scientific and economic studies, and cost-benefit analyses, and identify how the public can access such information online, and shall submit to each House of the Congress and to the Comptroller General a report containing—
a copy of the rule;
a concise general statement relating to the rule;
a classification of the rule as a major or nonmajor rule, including an explanation of the classification specifically addressing each criteria for a major rule contained within subparagraphs (A) through (C) of section 634(2);
a list of any other related regulatory actions intended to implement the same statutory provision or regulatory objective as well as the individual and aggregate economic effects of those actions; and
the proposed effective date of the rule.
On the date of the submission of the report under subparagraph (A), the Federal financial agency shall submit to the Comptroller General and make available to each House of Congress—
a complete copy of the cost-benefit analysis of the rule, if any, including an analysis of any jobs added or lost, differentiating between public and private sector jobs;
the Federal financial agency’s actions pursuant to sections 603, 604, 605, 607, and 609 of title 5, United States Code;
the Federal financial agency’s actions pursuant to sections 202, 203, 204, and 205 of the Unfunded Mandates Reform Act of 1995; and
any other relevant information or requirements under any other Act and any relevant Executive orders.
Upon receipt of a report submitted under subparagraph (A), each House shall provide copies of the report to the chairman and ranking member of each standing committee with jurisdiction under the rules of the House of Representatives or the Senate to report a bill to amend the provision of law under which the rule is issued.
The Comptroller General shall provide a report on each major rule to the committees of jurisdiction by the end of 15 calendar days after the submission or publication date. The report of the Comptroller General shall include an assessment of the Federal financial agency’s compliance with procedural steps required by paragraph (1)(B) and an assessment of whether the major rule imposes any new limits or mandates on private-sector activity.
Federal financial agencies shall cooperate with the Comptroller General by providing information relevant to the Comptroller General’s report under subparagraph (A).
A major rule relating to a report submitted under paragraph (1) shall take effect upon enactment of a joint resolution of approval described in section 632 or as provided for in the rule following enactment of a joint resolution of approval described in section 632, whichever is later.
A nonmajor rule shall take effect as provided by section 633 after submission to Congress under paragraph (1).
If a joint resolution of approval relating to a major rule is not enacted within the period provided in subsection (b)(2), then a joint resolution of approval relating to the same rule may not be considered under this subtitle in the same Congress by either the House of Representatives or the Senate.
A major rule shall not take effect unless the Congress enacts a joint resolution of approval described under section 632.
If a joint resolution described in subsection (a) is not enacted into law by the end of 70 session days or legislative days, as applicable, beginning on the date on which the report referred to in subsection (a)(1)(A) is received by Congress (excluding days either House of Congress is adjourned for more than 3 days during a session of Congress), then the rule described in that resolution shall be deemed not to be approved and such rule shall not take effect.
Notwithstanding any other provision of this section (except subject to paragraph (3)), a major rule may take effect for one 90-calendar-day period if the President makes a determination under paragraph (2) and submits written notice of such determination to the Congress.
Paragraph (1) applies to a determination made by the President by Executive order that the major rule should take effect because such rule is—
necessary because of an imminent threat to health or safety or other emergency;
necessary for the enforcement of criminal laws;
necessary for national security; or
issued pursuant to any statute implementing an international trade agreement.
An exercise by the President of the authority under this subsection shall have no effect on the procedures under section 632.
In addition to the opportunity for review otherwise provided under this subtitle, in the case of any rule for which a report was submitted in accordance with subsection (a)(1)(A) during the period beginning on the date occurring—
in the case of the Senate, 60 session days; or
in the case of the House of Representatives, 60 legislative days,
In applying sections 632 and 633 for purposes of such additional review, a rule described under paragraph (1) shall be treated as though—
such rule were published in the Federal Register on—
in the case of the Senate, the 15th session day; or
in the case of the House of Representatives, the 15th legislative day,
a report on such rule were submitted to Congress under subsection (a)(1) on such date.
Nothing in this paragraph shall be construed to affect the requirement under subsection (a)(1) that a report shall be submitted to Congress before a rule can take effect.
A rule described under paragraph (1) shall take effect as otherwise provided by law (including other subsections of this section).
Congressional approval procedure for major rules
For purposes of this section, the term joint resolution means only a joint resolution addressing a report classifying a rule as major pursuant to section 631(a)(1)(A)(iii) that—
bears no preamble;
bears the following title (with blanks filled as appropriate): Approving the rule submitted by ___ relating to ___.
;
includes after its resolving clause only the following (with blanks filled as appropriate): That Congress approves the rule submitted by ___ relating to ___.
; and
is introduced pursuant to paragraph (2).
After a House of Congress receives a report classifying a rule as major pursuant to section 631(a)(1)(A)(iii), the majority leader of that House (or his or her respective designee) shall introduce (by request, if appropriate) a joint resolution described in paragraph (1)—
in the case of the House of Representatives, within 3 legislative days; and
in the case of the Senate, within 3 session days.
A joint resolution described in paragraph (1) shall not be subject to amendment at any stage of proceeding.
A joint resolution described in subsection (a) shall be referred in each House of Congress to the committees having jurisdiction over the provision of law under which the rule is issued.
In the Senate, if the committee or committees to which a joint resolution described in subsection (a) has been referred have not reported it at the end of 15 session days after its introduction, such committee or committees shall be automatically discharged from further consideration of the resolution and it shall be placed on the calendar. A vote on final passage of the resolution shall be taken on or before the close of the 15th session day after the resolution is reported by the committee or committees to which it was referred, or after such committee or committees have been discharged from further consideration of the resolution.
In the Senate, when the committee or committees to which a joint resolution is referred have reported, or when a committee or committees are discharged (under subsection (c)) from further consideration of a joint resolution described in subsection (a), it is at any time thereafter in order (even though a previous motion to the same effect has been disagreed to) for a motion to proceed to the consideration of the joint resolution, and all points of order against the joint resolution (and against consideration of the joint resolution) are waived. The motion is not subject to amendment, or to a motion to postpone, or to a motion to proceed to the consideration of other business. A motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in order. If a motion to proceed to the consideration of the joint resolution is agreed to, the joint resolution shall remain the unfinished business of the Senate until disposed of.
In the Senate, debate on the joint resolution, and on all debatable motions and appeals in connection therewith, shall be limited to not more than 2 hours, which shall be divided equally between those favoring and those opposing the joint resolution. A motion to further limit debate is in order and not debatable. An amendment to, or a motion to postpone, or a motion to proceed to the consideration of other business, or a motion to recommit the joint resolution is not in order.
In the Senate, immediately following the conclusion of the debate on a joint resolution described in subsection (a), and a single quorum call at the conclusion of the debate if requested in accordance with the rules of the Senate, the vote on final passage of the joint resolution shall occur.
Appeals from the decisions of the Chair relating to the application of the rules of the Senate to the procedure relating to a joint resolution described in subsection (a) shall be decided without debate.
In the House of Representatives, if any committee to which a joint resolution described in subsection (a) has been referred has not reported it to the House at the end of 15 legislative days after its introduction, such committee shall be discharged from further consideration of the joint resolution, and it shall be placed on the appropriate calendar. On the second and fourth Thursdays of each month it shall be in order at any time for the Speaker to recognize a Member who favors passage of a joint resolution that has appeared on the calendar for at least 5 legislative days to call up that joint resolution for immediate consideration in the House without intervention of any point of order. When so called up a joint resolution shall be considered as read and shall be debatable for 1 hour equally divided and controlled by the proponent and an opponent, and the previous question shall be considered as ordered to its passage without intervening motion. It shall not be in order to reconsider the vote on passage. If a vote on final passage of the joint resolution has not been taken by the third Thursday on which the Speaker may recognize a Member under this subsection, such vote shall be taken on that day.
If, before passing a joint resolution described in subsection (a), one House receives from the other a joint resolution having the same text, then—
the joint resolution of the other House shall not be referred to a committee; and
the procedure in the receiving House shall be the same as if no joint resolution had been received from the other House until the vote on passage, when the joint resolution received from the other House shall supplant the joint resolution of the receiving House.
This subsection shall not apply to the House of Representatives if the joint resolution received from the Senate is a revenue measure.
If either House has not taken a vote on final passage of the joint resolution by the last day of the period described in section 631(b)(2), then such vote shall be taken on that day.
This section and section 633 are enacted by Congress—
as an exercise of the rulemaking power of the Senate and House of Representatives, respectively, and as such is deemed to be part of the rules of each House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of a joint resolution described in subsection (a) and superseding other rules only where explicitly so; and
with full recognition of the Constitutional right of either House to change the rules (so far as they relate to the procedure of that House) at any time, in the same manner and to the same extent as in the case of any other rule of that House.
Congressional disapproval procedure for nonmajor rules
For purposes of this section, the term joint resolution means only a joint resolution introduced in the period beginning on the date on which the report referred to in section 631(a)(1)(A) is received by Congress and ending 60 days thereafter (excluding days either House of Congress is adjourned for more than 3 days during a session of Congress), the matter after the resolving clause of which is as follows: That Congress disapproves the nonmajor rule submitted by the ___ relating to ___ , and such rule shall have no force or effect.
(The blank spaces being appropriately filled in).
A joint resolution described in subsection (a) shall be referred to the committees in each House of Congress with jurisdiction.
In the Senate, if the committee to which is referred a joint resolution described in subsection (a) has not reported such joint resolution (or an identical joint resolution) at the end of 15 session days after the date of introduction of the joint resolution, such committee may be discharged from further consideration of such joint resolution upon a petition supported in writing by 30 Members of the Senate, and such joint resolution shall be placed on the calendar.
In the Senate, when the committee to which a joint resolution is referred has reported, or when a committee is discharged (under subsection (c)) from further consideration of a joint resolution described in subsection (a), it is at any time thereafter in order (even though a previous motion to the same effect has been disagreed to) for a motion to proceed to the consideration of the joint resolution, and all points of order against the joint resolution (and against consideration of the joint resolution) are waived. The motion is not subject to amendment, or to a motion to postpone, or to a motion to proceed to the consideration of other business. A motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in order. If a motion to proceed to the consideration of the joint resolution is agreed to, the joint resolution shall remain the unfinished business of the Senate until disposed of.
In the Senate, debate on the joint resolution, and on all debatable motions and appeals in connection therewith, shall be limited to not more than 10 hours, which shall be divided equally between those favoring and those opposing the joint resolution. A motion to further limit debate is in order and not debatable. An amendment to, or a motion to postpone, or a motion to proceed to the consideration of other business, or a motion to recommit the joint resolution is not in order.
In the Senate, immediately following the conclusion of the debate on a joint resolution described in subsection (a), and a single quorum call at the conclusion of the debate if requested in accordance with the rules of the Senate, the vote on final passage of the joint resolution shall occur.
Appeals from the decisions of the Chair relating to the application of the rules of the Senate to the procedure relating to a joint resolution described in subsection (a) shall be decided without debate.
In the Senate, the procedure specified in subsection (c) or (d) shall not apply to the consideration of a joint resolution respecting a nonmajor rule—
after the expiration of the 60 session days beginning with the applicable submission or publication date; or
if the report under section 631(a)(1)(A) was submitted during the period referred to in section 631(d)(1), after the expiration of the 60 session days beginning on the 15th session day after the succeeding session of Congress first convenes.
If, before the passage by one House of a joint resolution of that House described in subsection (a), that House receives from the other House a joint resolution described in subsection (a), then the following procedures shall apply:
The joint resolution of the other House shall not be referred to a committee.
With respect to a joint resolution described in subsection (a) of the House receiving the joint resolution—
the procedure in that House shall be the same as if no joint resolution had been received from the other House; but
the vote on final passage shall be on the joint resolution of the other House.
Definitions
For purposes of this subtitle:
The term Federal financial agency
means the Consumer Financial Opportunity Commission, Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Office of the Comptroller of the Currency, the National Credit Union Administration, and the Securities and Exchange Commission.
The term major rule means any rule, including an interim final rule, that the Administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget finds has resulted in or is likely to result in—
an annual effect on the economy of $100 million or more;
a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or
significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.
The term nonmajor rule means any rule that is not a major rule.
The term rule has the meaning given such term in section 551 of title 5, United States Code, except that such term does not include—
any rule of particular applicability, including a rule that approves or prescribes for the future rates, wages, prices, services, or allowances therefore, corporate or financial structures, reorganizations, mergers, or acquisitions thereof, or accounting practices or disclosures bearing on any of the foregoing;
any rule relating to agency management or personnel; or
any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties.
The term submission date or publication date
, except as otherwise provided in this subtitle, means—
in the case of a major rule, the date on which the Congress receives the report submitted under section 631(a)(1)(A); and
in the case of a nonmajor rule, the later of—
the date on which the Congress receives the report submitted under section 631(a)(1)(A); and
the date on which the nonmajor rule is published in the Federal Register, if so published.
Judicial review
No determination, finding, action, or omission under this subtitle shall be subject to judicial review.
Notwithstanding subsection (a), a court may determine whether a Federal financial agency has completed the necessary requirements under this subtitle for a rule to take effect.
The enactment of a joint resolution of approval under section 632 shall not be interpreted to serve as a grant or modification of statutory authority by Congress for the promulgation of a rule, shall not extinguish or affect any claim, whether substantive or procedural, against any alleged defect in a rule, and shall not form part of the record before the court in any judicial proceeding concerning a rule except for purposes of determining whether or not the rule is in effect.
Effective date of certain rules
Notwithstanding section 631—
any rule that establishes, modifies, opens, closes, or conducts a regulatory program for a commercial, recreational, or subsistence activity related to hunting, fishing, or camping; or
any rule other than a major rule which the Federal financial agency for good cause finds (and incorporates the finding and a brief statement of reasons therefore in the rule issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest,
Budgetary effects of rules subject to section 632 of the Financial CHOICE Act of 2016
Section 257(b)(2) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by adding at the end the following new subparagraph:
Budgetary effects of rules subject to section 632 of the Financial CHOICE Act of 2016
Any rules subject to the congressional approval procedure set forth in section 632 of the Financial CHOICE Act of 2016 affecting budget authority, outlays, or receipts shall be assumed to be effective unless it is not approved in accordance with such section.
.
Judicial Review of Agency Actions
Scope of judicial review of agency actions
In general
Notwithstanding any other provision of law, in any judicial review of an agency action pursuant to chapter 7 of title 5, United States Code, to the extent necessary to decision and when presented, the reviewing court shall determine the meaning or applicability of the terms of an agency action and decide de novo all relevant questions of law, including the interpretation of constitutional and statutory provisions, and rules made by an agency. Notwithstanding any other provision of law, this section shall apply in any action for judicial review of agency action authorized under any provision of law. No law may exempt any such civil action from the application of this section except by specific reference to this section.
Agency defined
For purposes of this section, the term agency
means the Consumer Financial Opportunity Commission, the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Office of the Comptroller of the Currency, the National Credit Union Administration, and the Securities and Exchange Commission.
Leadership of Financial Regulators
Federal Deposit Insurance Corporation
Section 2 of the Federal Deposit Insurance Act (12 U.S.C. 1812) is amended—
in subsection (a)(1), by striking 5 members
and all that follows through 3 of whom
and inserting the following: 5 members, who
;
by amending subsection (d) to read as follows:
Vacancy
Any vacancy on the Board of Directors shall be filled in the manner in which the original appointment was made.
; and
in subsection (f)—
by striking paragraph (2); and
by redesignating paragraph (3) as paragraph (2).
Federal Housing Finance Agency
Establishment of Board
Section 1312 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4512) is amended—
in the heading of such section, by striking Director
and inserting Board of Directors
; and
by striking subsections (a) and (b) and inserting the following:
Establishment
There is established the Board of Directors of the Agency, which shall serve as the head of the Agency.
Board of Directors
Composition of the Board
In general
The Board shall be composed of 5 members who shall be appointed by the President, by and with the advice and consent of the Senate, from among individuals who—
are citizens of the United States; and
have a demonstrated understanding of financial management or oversight, and have a demonstrated understanding of capital markets, including the mortgage securities markets and housing finance.
Staggering
The members of the Board shall serve staggered terms, which initially shall be established by the President for terms of 1, 2, 3, 4, and 5 years, respectively.
Terms
In general
Each member of the Board, including the Chair, shall serve for a term of 5 years.
Removal
The President may remove any member of the Board for inefficiency, neglect of duty, or malfeasance in office.
Vacancies
Any member of the Board appointed to fill a vacancy occurring before the expiration of the term to which that member’s predecessor was appointed (including the Chair) shall be appointed only for the remainder of the term.
Continuation of service
Each member of the Board may continue to serve after the expiration of the term of office to which that member was appointed until a successor has been appointed by the President and confirmed by the Senate, except that a member may not continue to serve more than 1 year after the date on which that member’s term would otherwise expire.
Other employment prohibited
No member of the Board shall engage in any other business, vocation, or employment.
Affiliation
Not more than 3 members of the Board shall be members of any one political party.
Chair of the Board
Appointment
The Chair of the Board shall be appointed by the President.
Authority
The Chair shall be the principal executive officer of the Agency, and shall exercise all of the executive and administrative functions of the Agency, including with respect to—
the appointment and supervision of personnel employed under the Agency (other than personnel employed regularly and full time in the immediate offices of members of the Board other than the Chair);
the distribution of business among personnel appointed and supervised by the Chair and among administrative units of the Agency; and
the use and expenditure of funds.
Limitation
In carrying out any of the Chair’s functions under the provisions of this paragraph the Chair shall be governed by general policies of the Agency and by such regulatory decisions, findings, and determinations as the Agency may by law be authorized to make.
No impairment by reason of vacancies
No vacancy in the members of the Board shall impair the right of the remaining members of the Board to exercise all the powers of the Board. Three members of the Board shall constitute a quorum for the transaction of business, except that if there are only 3 members serving on the Board because of vacancies in the Board, 2 members of the Board shall constitute a quorum for the transaction of business. If there are only 2 members serving on the Board because of vacancies in the Board, 2 members shall constitute a quorum for the 6-month period beginning on the date of the vacancy which caused the number of Board members to decline to 2.
Compensation
Chair
The Chair shall receive compensation at the rate prescribed for level I of the Executive Schedule under section 5313 of title 5, United States Code.
Other members of the Board
The 4 other members of the Board shall each receive compensation at the rate prescribed for level II of the Executive Schedule under section 5314 of title 5, United States Code.
Initial quorum established
During any time period prior to the confirmation of at least two members of the Board, one member of the Board shall constitute a quorum for the transaction of business. Following the confirmation of at least 2 additional members of the Board, the quorum requirements of paragraph (4) shall apply.
.
Conforming amendment
Section 5313 of title 5, United States Code, is amended by striking Director of the Federal Housing Finance Agency.
.
Deeming
Any reference in a law, regulation, document, paper, or other record of the United States to the position of the Director of the Federal Housing Finance Agency shall be deemed a reference to the Board of Directors of the Federal Housing Finance Agency.
National Credit Union Administration
Section 102 of the Federal Credit Union Act (12 U.S.C. 1752a) is amended—
in subsection (b)(1)—
by striking three
and inserting five
; and
by striking two
and inserting three
; and
by amending subsection (c) to read as follows:
Terms
The term of office of each member of the Board shall be five years, and the members shall serve staggered terms. Board members shall not be appointed to succeed themselves. Any Board member may continue to serve as such after the expiration of said member's term until a successor has qualified.
.
Office of the Comptroller of the Currency
Establishment of board
Subsection (b) of section 324 of the Revised Statutes of the United States (12 U.S.C. 1) is amended to read as follows:
Board of Directors
Establishment
There is established the Board of Directors of the Office of the Comptroller of the Currency (hereinafter referred to as the Board
), which shall serve as the head of the Office.
Composition of the Board
In general
The Board shall be composed of 5 members who shall be appointed by the President, by and with the advice and consent of the Senate, from among individuals who—
are citizens of the United States; and
have strong competencies and experiences related to the banking industry.
Staggering
The members of the Board shall serve staggered terms, which initially shall be established by the President for terms of 1, 2, 3, 4, and 5 years, respectively.
Terms
In general
Each member of the Board, including the Chair, shall serve for a term of 5 years.
Removal
The President may remove any member of the Board for inefficiency, neglect of duty, or malfeasance in office.
Vacancies
Any member of the Board appointed to fill a vacancy occurring before the expiration of the term to which that member’s predecessor was appointed (including the Chair) shall be appointed only for the remainder of the term.
Continuation of service
Each member of the Board may continue to serve after the expiration of the term of office to which that member was appointed until a successor has been appointed by the President and confirmed by the Senate, except that a member may not continue to serve more than 1 year after the date on which that member’s term would otherwise expire.
Other employment prohibited
No member of the Board shall engage in any other business, vocation, or employment.
Affiliation
Not more than 3 members of the Board shall be members of any one political party.
Chair of the Board
Appointment
The Chair of the Board shall be appointed by the President.
Authority
The Chair shall be the principal executive officer of the Office, and shall exercise all of the executive and administrative functions of the Office, including with respect to—
the appointment and supervision of personnel employed under the Office (other than personnel employed regularly and full time in the immediate offices of members of the Board other than the Chair);
the distribution of business among personnel appointed and supervised by the Chair and among administrative units of the Office; and
the use and expenditure of funds.
Limitation
In carrying out any of the Chair’s functions under the provisions of this paragraph the Chair shall be governed by general policies of the Office and by such regulatory decisions, findings, and determinations as the Office may by law be authorized to make.
No impairment by reason of vacancies
No vacancy in the members of the Board shall impair the right of the remaining members of the Board to exercise all the powers of the Board. Three members of the Board shall constitute a quorum for the transaction of business, except that if there are only 3 members serving on the Board because of vacancies in the Board, 2 members of the Board shall constitute a quorum for the transaction of business. If there are only 2 members serving on the Board because of vacancies in the Board, 2 members shall constitute a quorum for the 6-month period beginning on the date of the vacancy which caused the number of Board members to decline to 2.
Compensation
Chair
The Chair shall receive compensation at the rate prescribed for level I of the Executive Schedule under section 5313 of title 5, United States Code.
Other members of the Board
The 4 other members of the Board shall each receive compensation at the rate prescribed for level II of the Executive Schedule under section 5314 of title 5, United States Code.
Initial quorum established
During any time period prior to the confirmation of at least two members of the Board, one member of the Board shall constitute a quorum for the transaction of business. Following the confirmation of at least 2 additional members of the Board, the quorum requirements of paragraph (5) shall apply.
.
Conforming amendment
Section 5314 of title 5, United States Code, is amended by striking Comptroller of the Currency.
.
Deeming
Any reference in a law, regulation, document, paper, or other record of the United States to the position of the Comptroller of the Currency shall be deemed a reference to the Board of Directors of the Office of the Comptroller of the Currency.
Congressional Oversight of Appropriations
Bringing the Federal Deposit Insurance Corporation into the regular appropriations process
In general
Section 10 of the Federal Deposit Insurance Act (12 U.S.C. 1820) is amended—
in subsection (a)—
by striking (a) The
and inserting the following:
Powers
In general
The
;
by inserting , subject to paragraph (2) and subsection (l),
after The Board of Directors of the Corporation
; and
by adding at the end the following new paragraph:
Appropriations requirement
The Corporation may only incur obligations or allow and pay expenses pursuant to an appropriations Act, other than with respect to obligations or expenses paid for with funds from the Deposit Insurance Fund or incurred, allowed, or paid for the purpose of carrying out the insurance function of the Corporation.
; and
by adding at the end the following new subsection:
Non-insurance fees as offsetting collections
Any fees collected by the Corporation, except pursuant to section 5(d), shall be deposited and credited as offsetting collections to the account providing appropriations to the Corporation.
.
Effective date
The amendments made by this section shall apply with respect to expenses paid and fees collected on or after the date that is 90 days after the date of the enactment of the first appropriation Act that provides for appropriations to the Federal Deposit Insurance Corporation and that is enacted after the date of the enactment of this Act.
Bringing the Federal Housing Finance Agency into the regular appropriations process
In general
Section 1316(f) of the Housing and Community Development Act of 1992 (12 U.S.C. 4516(f)) is amended to read as follows:
Appropriations requirement; assessments deposited as offsetting collections
Appropriations requirement
The Agency may only incur obligations or allow and pay expenses pursuant to an appropriations Act.
Offsetting collections
Any assessments or other fees collected by the Agency shall be deposited and credited as offsetting collections to the account providing appropriations to the Agency.
.
Effective date
The amendments made by this section shall apply with respect to expenses paid and fees collected on or after the date that is 90 days after the date of the enactment of the first appropriation Act that provides for appropriations to the Federal Housing Finance Agency and that is enacted after the date of the enactment of this Act.
Bringing the National Credit Union Administration into the regular appropriations process
In general
Section 105 of the Federal Credit Union Act (12 U.S.C. 1755) is amended by striking subsections (d) and (e) and inserting the following:
Appropriations requirement
The Administration may only incur obligations or allow and pay expenses pursuant to an appropriations Act, other than with respect to obligations or expenses paid for with funds from the National Credit Union Share Insurance Fund or incurred, allowed, or paid for the purpose of carrying out the insurance function of the Administration.
Non-insurance fees as offsetting collections
Any fees collected by the Administration, except for insurance fees collected under title II, shall be deposited and credited as offsetting collections to the account providing appropriations to the Administration.
.
Effective date
The amendments made by this section shall apply with respect to expenses paid and fees collected on or after the date that is 90 days after the date of the enactment of the first appropriation Act that provides for appropriations to the National Credit Union Administration and that is enacted after the date of the enactment of this Act.
Bringing the Office of the Comptroller of the Currency into the regular appropriations process
In general
Section 5240A of the Revised Statutes of the United States is amended—
by striking Sec. 5240A. The Comptroller of the Currency may
and inserting the following:
Appropriations requirement; assessments deposited as offsetting collections
In general
The Board of Directors of the Office of the Comptroller of the Currency may
;
by striking Funds derived
and all that follows through the end of the section; and
by adding at the end the following:
Appropriations requirement
The Chair of the Board of Directors of the Office of the Comptroller of the Currency may only incur obligations or allow and pay expenses pursuant to an appropriations Act.
Offsetting collections
Any assessments or other fees collected by the Chair shall be deposited and credited as offsetting collections to the account providing appropriations to the Board of Directors of the Office of the Comptroller of the Currency.
.
Effective Date
The amendments made by this section shall apply with respect to expenses paid and fees collected on or after the date that is 90 days after the date of the enactment of the first appropriation Act that provides for appropriations to the Board of Directors of the Office of the Comptroller of the Currency and that is enacted after the date of the enactment of this Act.
Bringing the non-monetary policy related functions of the Board of Governors of the Federal Reserve System into the regular appropriations process
The Federal Reserve Act is amended by inserting after section 11B the following:
Appropriations requirement for non-monetary policy related administrative costs
Appropriations requirement
The Board of Governors of the Federal Reserve System and the Federal reserve banks may only incur obligations or allow and pay expenses with respect to non-monetary policy related administrative costs pursuant to an appropriations Act.
Earnings and assessments used to recover the cost of appropriations
In general
Except as provided under paragraph (2) and notwithstanding any other provision of law, all earnings of the Board of Governors of the Federal Reserve System and the Federal reserve banks and all amounts collected pursuant to section 11(t) that would, absent this section, be used to fund the non-monetary policy related administrative costs of the Board of Governors of the Federal Reserve System and each of the Federal reserve banks shall be deposited into the general fund of the Treasury and credited as offsetting collections for the amounts appropriated to fund such non-monetary policy related administrative costs.
No deposits in excess of appropriations
The amount deposited pursuant to paragraph (1) with respect to a fiscal year shall not exceed the amount appropriated to fund the non-monetary policy related administrative costs of the Board of Governors of the Federal Reserve System and each of the Federal reserve banks for such fiscal year.
Definitions
For purposes of this section:
Monetary policy
The term monetary policy
means a strategy for producing a generally acceptable exchange medium that supports the productive employment of economic resources by reliably serving as both a unit of account and store of value.
Non-monetary policy related administrative costs
The term non-monetary policy related administrative costs
means administrative costs not related to the conduct of monetary policy, and include—
direct operating expenses for supervising and regulating entities supervised and regulated by the Board of Governors of the Federal Reserve System, including conducting examinations, conducting stress tests, communicating with the entities regarding supervisory matters and laws, and regulations;
operating expenses for activities integral to carrying out supervisory and regulatory responsibilities, such as training staff in the supervisory function, research and analysis functions including library subscription services, and collecting and processing regulatory reports filed by supervised institutions; and
support, overhead, and pension expenses related to the items described under subparagraphs (A) and (B).
.
International Processes
Requirements for international processes
Board of Governors requirements
Section 11 of the Federal Reserve Act (12 U.S.C. 248), as amended by section 706, is further amended by adding at the end the following new subsection:
International processes
Notice of process; consultation
At least 30 calendar days before any member or employee of the Board of Governors of the Federal Reserve System participates in a process of setting financial standards as a part of any foreign or multinational entity, the Board of Governors shall—
issue a notice of the process, including the subject matter, scope, and goals of the process, to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate;
make such notice available to the public, including on the website of the Board of Governors; and
solicit public comment, and consult with the committees described under subparagraph (A), with respect to the subject matter, scope, and goals of the process.
Public reports on process
After the end of any process described under paragraph (1), the Board of Governors shall issue a public report on the topics that were discussed during the process and any new or revised rulemakings or policy changes that the Board of Governors believes should be implemented as a result of the process.
Notice of agreements; consultation
At least 90 calendar days before any member or employee of the Board of Governors of the Federal Reserve System participates in a process of setting financial standards as a part of any foreign or multinational entity, the Board of Governors shall—
issue a notice of agreement to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate;
make such notice available to the public, including on the website of the Board of Governors; and
consult with the committees described under subparagraph (A) with respect to the nature of the agreement and any anticipated effects such agreement will have on the economy.
Definition
For purposes of this subsection, the term process shall include any official proceeding or meeting on financial regulation of a recognized international organization with authority to set financial standards on a global or regional level, including the Financial Stability Board, the Basel Committee on Banking Supervision (or a similar organization), and the International Association of Insurance Supervisors (or a similar organization).
.
FDIC requirements
The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended by adding at the end the following new section:
International processes
Notice of process; consultation
At least 30 calendar days before the Board of Directors participates in a process of setting financial standards as a part of any foreign or multinational entity, the Board of Directors shall—
issue a notice of the process, including the subject matter, scope, and goals of the process, to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate;
make such notice available to the public, including on the website of the Corporation; and
solicit public comment, and consult with the committees described under paragraph (1), with respect to the subject matter, scope, and goals of the process.
Public reports on process
After the end of any process described under subsection (a), the Board of Directors shall issue a public report on the topics that were discussed at the process and any new or revised rulemakings or policy changes that the Board of Directors believes should be implemented as a result of the process.
Notice of agreements; consultation
At least 90 calendar days before the Board of Directors participates in a process of setting financial standards as a part of any foreign or multinational entity, the Board of Directors shall—
issue a notice of agreement to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate;
make such notice available to the public, including on the website of the Corporation; and
consult with the committees described under paragraph (1) with respect to the nature of the agreement and any anticipated effects such agreement will have on the economy.
Definition
For purposes of this section, the term process shall include any official proceeding or meeting on financial regulation of a recognized international organization with authority to set financial standards on a global or regional level, including the Financial Stability Board, the Basel Committee on Banking Supervision (or a similar organization), and the International Association of Insurance Supervisors (or a similar organization).
.
Treasury requirements
Section 325 of title 31, United States Code, is amended by adding at the end the following new subsection:
International processes
Notice of process; consultation
At least 30 calendar days before the Secretary participates in a process of setting financial standards as a part of any foreign or multinational entity, the Secretary shall—
issue a notice of the process, including the subject matter, scope, and goals of the process, to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate;
make such notice available to the public, including on the website of the Department of the Treasury; and
solicit public comment, and consult with the committees described under subparagraph (A), with respect to the subject matter, scope, and goals of the process.
Public reports on process
After the end of any process described under paragraph (1), the Secretary shall issue a public report on the topics that were discussed at the process and any new or revised rulemakings or policy changes that the Secretary believes should be implemented as a result of the process.
Notice of agreements; consultation
At least 90 calendar days before the Secretary participates in a process of setting financial standards as a part of any foreign or multinational entity, the Secretary shall—
issue a notice of agreement to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate;
make such notice available to the public, including on the website of the Department of the Treasury; and
consult with the committees described under subparagraph (A) with respect to the nature of the agreement and any anticipated effects such agreement will have on the economy.
Definition
For purposes of this subsection, the term process shall include any official proceeding or meeting on financial regulation of a recognized international organization with authority to set financial standards on a global or regional level, including the Financial Stability Board, the Basel Committee on Banking Supervision (or a similar organization), and the International Association of Insurance Supervisors (or a similar organization).
.
OCC requirements
Chapter one of title LXII of the Revised Statutes of the United States (12 U.S.C. 21 et seq.) is amended—
by adding at the end the following new section:
International processes
Notice of process; consultation
At least 30 calendar days before the Board of Directors of the Office of the Comptroller of the Currency participates in a process of setting financial standards as a part of any foreign or multinational entity, the Board of Directors shall—
issue a notice of the process, including the subject matter, scope, and goals of the process, to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate;
make such notice available to the public, including on the website of the Office of the Comptroller of the Currency; and
solicit public comment, and consult with the committees described under paragraph (1), with respect to the subject matter, scope, and goals of the process.
Public reports on process
After the end of any process described under subsection (a), the Board of Directors shall issue a public report on the topics that were discussed at the process and any new or revised rulemakings or policy changes that the Board of Directors believes should be implemented as a result of the process.
Notice of agreements; consultation
At least 90 calendar days before the Board of Directors participates in a process of setting financial standards as a part of any foreign or multinational entity, the Board of Directors shall—
issue a notice of agreement to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate;
make such notice available to the public, including on the website of the Office of the Comptroller of the Currency; and
consult with the committees described under paragraph (1) with respect to the nature of the agreement and any anticipated effects such agreement will have on the economy.
Definition
For purposes of this section, the term process shall include any official proceeding or meeting on financial regulation of a recognized international organization with authority to set financial standards on a global or regional level, including the Financial Stability Board, the Basel Committee on Banking Supervision (or a similar organization), and the International Association of Insurance Supervisors (or a similar organization).
; and
in the table of contents for such chapter, by adding at the end the following new item:
5156B. International processes.
.
Securities and Exchange Commission requirements
Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is amended by adding at the end the following new subsection:
International processes
Notice of process; consultation
At least 30 calendar days before the Commission participates in a process of setting financial standards as a part of any foreign or multinational entity, the Commission shall—
issue a notice of the process, including the subject matter, scope, and goals of the process, to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate;
make such notice available to the public, including on the website of the Commission; and
solicit public comment, and consult with the committees described under subparagraph (A), with respect to the subject matter, scope, and goals of the process.
Public reports on process
After the end of any process described under paragraph (1), the Commission shall issue a public report on the topics that were discussed at the process and any new or revised rulemakings or policy changes that the Commission believes should be implemented as a result of the process.
Notice of agreements; consultation
At least 90 calendar days before the Commission participates in a process of setting financial standards as a part of any foreign or multinational entity, the Commission shall—
issue a notice of agreement to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate;
make such notice available to the public, including on the website of the Commission; and
consult with the committees described under subparagraph (A) with respect to the nature of the agreement and any anticipated effects such agreement will have on the economy.
Definition
For purposes of this subsection, the term process shall include any official proceeding or meeting on financial regulation of a recognized international organization with authority to set financial standards on a global or regional level, including the Financial Stability Board, the Basel Committee on Banking Supervision (or a similar organization), and the International Association of Insurance Supervisors (or a similar organization).
.
Commodity Futures Trading Commission Requirements
Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is amended by adding at the end the following:
International processes
Notice of process; consultation
At least 30 calendar days before the Commission participates in a process of setting financial standards as a part of any foreign or multinational entity, the Commission shall—
issue a notice of the process, including the subject matter, scope, and goals of the process, to—
the Committees on Financial Services and Agriculture of the House of Representatives; and
the Committees on Banking, Housing, and Urban Affairs and Agriculture, Nutrition, and Forestry of the Senate;
make such notice available to the public, including on the website of the Commission; and
solicit public comment, and consult with the committees described under subparagraph (A), with respect to the subject matter, scope, and goals of the process.
Public reports on process
After the end of any process described under paragraph (1), the Commission shall issue a public report on the topics that were discussed during the process and any new or revised rulemakings or policy changes that the Commission believes should be implemented as a result of the process.
Notice of agreements; consultation
At least 90 calendar days before the Commission participates in a process of setting financial standards as a part of any foreign or multinational entity, the Commission shall—
issue a notice of agreement to—
the Committees on Financial Services and Agriculture of the House of Representatives; and
the Committees on Banking, Housing, and Urban Affairs and Agriculture, Nutrition, and Forestry of the Senate;
make such notice available to the public, including on the website of the Commission; and
consult with the committees described under subparagraph (A) with respect to the nature of the agreement and any anticipated effects such agreement will have on the economy.
Definition
For purposes of this subsection, the term process
shall include any official proceeding or meeting on financial regulation of a recognized international organization with authority to set financial standards on a global or regional level, including the Financial Stability Board, the Basel Committee on Banking Supervision (or a similar organization), and the International Association of Insurance Supervisors (or a similar organization).
.
Fed Oversight Reform and Modernization
Requirements for policy rules of the Federal Open Market Committee
The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended by inserting after section 2B the following new section:
Directive Policy Rules of the Federal Open Market Committee
Definitions
In this section the following definitions shall apply:
Appropriate congressional committees
The term appropriate congressional committees means the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate.
Directive Policy Rule
The term Directive Policy Rule means a policy rule developed by the Federal Open Market Committee that meets the requirements of subsection (c) and that provides the basis for the Open Market Operations Directive.
GDP
The term GDP means the gross domestic product of the United States as computed and published by the Department of Commerce.
Intermediate Policy Input
The term Intermediate Policy Input—
may include any variable determined by the Federal Open Market Committee as a necessary input to guide open-market operations;
shall include an estimate of, and the method of calculation for, the current rate of inflation or current inflation expectations; and
shall include, specifying whether the variable or estimate is historical, current, or a forecast and the method of calculation, at least one of—
an estimate of real GDP, nominal GDP, or potential GDP;
an estimate of the monetary aggregate compiled by the Board of Governors of the Federal Reserve System and Federal reserve banks; or
an interactive variable or a net estimate composed of the estimates described in clauses (i) and (ii).
Legislative day
The term legislative day means a day on which either House of Congress is in session.
Open Market Operations Directive
The term Open Market Operations Directive means an order to achieve a specified Policy Instrument Target provided to the Federal Reserve Bank of New York by the Federal Open Market Committee pursuant to powers authorized under section 14 of this Act that guide open-market operations.
Policy Instrument
The term Policy Instrument means—
the nominal Federal funds rate;
the nominal rate of interest paid on nonborrowed reserves; or
the discount window primary credit interest rate most recently published on the Federal Reserve Statistical Release on selected interest rates (daily or weekly), commonly referred to as the H.15 release.
Policy Instrument Target
The term Policy Instrument Target means the target for the Policy Instrument specified in the Open Market Operations Directive.
Reference Policy Rule
The term Reference Policy Rule means a calculation of the nominal Federal funds rate as equal to the sum of the following:
The rate of inflation over the previous four quarters.
One-half of the percentage deviation of the real GDP from an estimate of potential GDP.
One-half of the difference between the rate of inflation over the previous four quarters and two percent.
Two percent.
Submitting a Directive Policy Rule
Not later than 48 hours after the end of a meeting of the Federal Open Market Committee, the Chairman of the Federal Open Market Committee shall submit to the appropriate congressional committees and the Comptroller General of the United States a Directive Policy Rule and a statement that identifies the members of the Federal Open Market Committee who voted in favor of the Rule.
Requirements for a Directive Policy Rule
A Directive Policy Rule shall—
identify the Policy Instrument the Directive Policy Rule is designed to target;
describe the strategy or rule of the Federal Open Market Committee for the systematic quantitative adjustment of the Policy Instrument Target to respond to a change in the Intermediate Policy Inputs;
include a function that comprehensively models the interactive relationship between the Intermediate Policy Inputs;
include the coefficients of the Directive Policy Rule that generate the current Policy Instrument Target and a range of predicted future values for the Policy Instrument Target if changes occur in any Intermediate Policy Input;
describe the procedure for adjusting the supply of bank reserves to achieve the Policy Instrument Target;
include a statement as to whether the Directive Policy Rule substantially conforms to the Reference Policy Rule and, if applicable—
an explanation of the extent to which it departs from the Reference Policy Rule;
a detailed justification for that departure; and
a description of the circumstances under which the Directive Policy Rule may be amended in the future;
include a certification that such Rule is expected to support the economy in achieving stable prices and maximum natural employment over the long term;
include a calculation that describes with mathematical precision the expected annual inflation rate over a 5-year period; and
include a plan to use the most accurate data, subject to all historical revisions, for inputs into the Directive Policy Rule and the Reference Policy Rule.
GAO report
The Comptroller General of the United States shall compare the Directive Policy Rule submitted under subsection (b) with the rule that was most recently submitted to determine whether the Directive Policy Rule has materially changed. If the Directive Policy Rule has materially changed, the Comptroller General shall, not later than 7 days after each meeting of the Federal Open Market Committee, prepare and submit a compliance report to the appropriate congressional committees specifying whether the Directive Policy Rule submitted after that meeting and the Federal Open Market Committee are in compliance with this section.
Changing market conditions
Rule of construction
Nothing in this Act shall be construed to require that the plans with respect to the systematic quantitative adjustment of the Policy Instrument Target described under subsection (c)(2) be implemented if the Federal Open Market Committee determines that such plans cannot or should not be achieved due to changing market conditions.
GAO approval of update
Upon determining that plans described in paragraph (1) cannot or should not be achieved, the Federal Open Market Committee shall submit an explanation for that determination and an updated version of the Directive Policy Rule to the Comptroller General of the United States and the appropriate congressional committees not later than 48 hours after making the determination. The Comptroller General shall, not later than 48 hours after receiving such updated version, prepare and submit to the appropriate congressional committees a compliance report determining whether such updated version and the Federal Open Market Committee are in compliance with this section.
Directive Policy Rule and Federal Open Market Committee not in compliance
In general
If the Comptroller General of the United States determines that the Directive Policy Rule and the Federal Open Market Committee are not in compliance with this section in the report submitted pursuant to subsection (d), or that the updated version of the Directive Policy Rule and the Federal Open Market Committee are not in compliance with this section in the report submitted pursuant to subsection (e)(2), the Chairman of the Board of Governors of the Federal Reserve System shall, if requested by the chairman of either of the appropriate congressional committees, not later than 7 legislative days after such request, testify before such committee as to why the Directive Policy Rule, the updated version, or the Federal Open Market Committee is not in compliance.
GAO audit
Notwithstanding subsection (b) of section 714 of title 31, United States Code, upon submitting a report of noncompliance pursuant to subsection (d) or subsection (e)(2) and after the period of 7 legislative days described in paragraph (1), the Comptroller General shall audit the conduct of monetary policy by the Board of Governors of the Federal Reserve System and the Federal Open Market Committee upon request of the appropriate congressional committee. Such committee may specify the parameters of such audit.
Congressional hearings
The Chairman of the Board of Governors of the Federal Reserve System shall, if requested by the chairman of either of the appropriate congressional committees and not later than 7 legislative days after such request, appear before such committee to explain any change to the Directive Policy Rule.
.
Federal Open Market Committee blackout period
Section 12A of the Federal Reserve Act (12 U.S.C. 263) is amended by adding at the end the following new subsection:
Blackout period
In general
During a blackout period, the only public communications that may be made by members and staff of the Committee with respect to macroeconomic or financial developments or about current or prospective monetary policy issues are the following:
The dissemination of published data, surveys, and reports that have been cleared for publication by the Board of Governors of the Federal Reserve System.
Answers to technical questions specific to a data release.
Communications with respect to the prudential or supervisory functions of the Board of Governors.
Blackout period defined
For purposes of this subsection, and with respect to a meeting of the Committee described under subsection (a), the term blackout period means the time period that—
begins immediately after midnight on the day that is one week prior to the date on which such meeting takes place; and
ends at midnight on the day after the date on which such meeting takes place.
Exemption for Chairman of the Board of Governors
Nothing in this section shall prohibit the Chairman of the Board of Governors of the Federal Reserve System from participating in or issuing public communications.
.
Membership of Federal Open Market Committee
Section 12A(a) of the Federal Reserve Act (12 U.S.C. 263(a)) is amended—
in the first sentence, by striking five
and inserting six
;
in the second sentence, by striking One by the board of directors
and all that follows through the period at the end and inserting the following: One by the boards of directors of the Federal Reserve Banks of New York and Boston; one by the boards of directors of the Federal Reserve Banks of Philadelphia and Cleveland; one by the boards of directors of the Federal Reserve Banks of Richmond and Atlanta; one by the boards of directors of the Federal Reserve Banks of Chicago and St. Louis; one by the boards of directors of the Federal Reserve Banks of Minneapolis and Kansas City; and one by the boards of directors of the Federal Reserve Banks of Dallas and San Francisco.
; and
by inserting after the second sentence the following: In odd numbered calendar years, one representative shall be elected from each of the Federal Reserve Banks of Boston, Philadelphia, Richmond, Chicago, Minneapolis, and Dallas. In even-numbered calendar years, one representative shall be elected from each of the Federal Reserve Banks of New York, Cleveland, Atlanta, St. Louis, Kansas City, and San Francisco.
.
Frequency of testimony of the Chairman of the Board of Governors of the Federal Reserve System to Congress
In general
Section 2B of the Federal Reserve Act (12 U.S.C. 225b) is amended—
by striking semi-annual
each place it appears and inserting quarterly
; and
in subsection (a)(2)—
by inserting and October 20
after July 20
each place it appears; and
by inserting and May 20
after February 20
each place it appears.
Conforming amendment
Paragraph (12) of section 10 of the Federal Reserve Act (12 U.S.C. 247b(12)) is amended by striking semi-annual
and inserting quarterly
.
Vice Chairman for Supervision report requirement
Paragraph (12) of section 10 of the Federal Reserve Act (12 U.S.C. 247(b)) is amended—
by redesignating such paragraph as paragraph (11); and
in such paragraph, by adding at the end the following: In each such appearance, the Vice Chairman for Supervision shall provide written testimony that includes the status of all pending and anticipated rulemakings that are being made by the Board of Governors of the Federal Reserve System. If, at the time of any appearance described in this paragraph, the position of Vice Chairman for Supervision is vacant, the Vice Chairman for the Board of Governors of the Federal Reserve System (who has the responsibility to serve in the absence of the Chairman) shall appear instead and provide the required written testimony. If, at the time of any appearance described in this paragraph, both Vice Chairman positions are vacant, the Chairman of the Board of Governors of the Federal Reserve System shall appear instead and provide the required written testimony.
.
Salaries, financial disclosures, and office staff of the Board of Governors of the Federal Reserve System
In general
Section 11 of the Federal Reserve Act (12 U.S.C. 248) is amended—
by redesignating the second subsection (s) (relating to Assessments, Fees, and Other Charges for Certain Companies
) as subsection (t); and
by adding at the end the following new subsections:
Ethics standards for members and employees
Prohibited and restricted financial interests and transactions
The members and employees of the Board of Governors of the Federal Reserve System shall be subject to the provisions under section 4401.102 of title 5, Code of Federal Regulations, to the same extent as such provisions apply to an employee of the Securities and Exchange Commission.
Treatment of brokerage accounts and availability of account statements
The members and employees of the Board of Governors of the Federal Reserve System shall—
disclose all brokerage accounts that they maintain, as well as those in which they control trading or have a financial interest (including managed accounts, trust accounts, investment club accounts, and the accounts of spouses or minor children who live with the member or employee); and
with respect to any securities account that the member or employee is required to disclose to the Board of Governors, authorize their brokers and dealers to send duplicate account statements directly to Board of Governors.
Prohibitions related to outside employment and activities
The members and employees of the Board of Governors of the Federal Reserve System shall be subject to the prohibitions related to outside employment and activities described under section 4401.103(c) of title 5, Code of Federal Regulations, to the same extent as such prohibitions apply to an employee of the Securities and Exchange Commission.
Additional ethics standards
The members and employees of the Board of Governors of the Federal Reserve System shall be subject to—
the employee responsibilities and conduct regulations of the Office of Personnel Management under part 735 of title 5, Code of Federal Regulations;
the canons of ethics contained in subpart C of part 200 of title 17, Code of Federal Regulations, to the same extent as such subpart applies to the employees of the Securities and Exchange Commission; and
the regulations concerning the conduct of members and employees and former members and employees contained in subpart M of part 200 of title 17, Code of Federal Regulations, to the same extent as such subpart applies to the employees of the Securities and Exchange Commission.
Disclosure of staff salaries and financial information
The Board of Governors of the Federal Reserve System shall make publicly available, on the website of the Board of Governors, a searchable database that contains the names of all members, officers, and employees of the Board of Governors who receive an annual salary in excess of the annual rate of basic pay for GS–15 of the General Schedule, and—
the yearly salary information for such individuals, along with any nonsalary compensation received by such individuals; and
any financial disclosures required to be made by such individuals.
.
Office staff for each member of the Board of Governors
Subsection (l) of section 11 of the Federal Reserve Act (12 U.S.C. 248) is amended by adding at the end the following: Each member of the Board of Governors of the Federal Reserve System may employ, at a minimum, 2 individuals, with such individuals selected by such member and the salaries of such individuals set by such member. A member may employ additional individuals as determined necessary by the Board of Governors.
.
Amendments to powers of the Board of Governors of the Federal Reserve System
In general
Section 13(3) of the Federal Reserve Act (12 U.S.C. 343(3)), as amended by section 221, is further amended—
in subparagraph (A)—
by inserting that pose a threat to the financial stability of the United States
after unusual and exigent circumstances
; and
by inserting and by the affirmative vote of not less than nine presidents of the Federal reserve banks
after five members
;
in subparagraph (B)—
in clause (i), by inserting at the end the following:
Federal reserve banks may not accept equity securities issued by the recipient of any loan or other financial assistance under this paragraph as collateral. Not later than 6 months after the date of enactment of this sentence, the Board shall, by rule, establish—
a method for determining the sufficiency of the collateral required under this paragraph;
acceptable classes of collateral;
the amount of any discount of such value that the Federal reserve banks will apply for purposes of calculating the sufficiency of collateral under this paragraph; and
a method for obtaining independent appraisals of the value of collateral the Federal reserve banks receive.
; and
in clause (ii)—
by striking the second sentence; and
by inserting after the first sentence the following: A borrower shall not be eligible to borrow from any emergency lending program or facility unless the Board and all federal banking regulators with jurisdiction over the borrower certify that, at the time the borrower initially borrows under the program or facility, the borrower is not insolvent.
;
by inserting financial institution
before participant
each place such term appears;
in subparagraph (D)(i), by inserting financial institution
before participants
; and
by adding at the end the following new subparagraphs:
Penalty rate
In general
Not later than 6 months after the date of enactment of this subparagraph, the Board shall, with respect to a recipient of any loan or other financial assistance under this paragraph, establish by rule a minimum interest rate on the principal amount of any loan or other financial assistance.
Minimum interest rate defined
In this subparagraph, the term minimum interest rate shall mean the sum of—
the average of the secondary discount rate of all Federal Reserve banks over the most recent 90-day period; and
the average of the difference between a distressed corporate bond yield index (as defined by rule of the Board) and a bond yield index of debt issued by the United States (as defined by rule of the Board) over the most recent 90-day period.
Financial institution participant defined
For purposes of this paragraph, the term financial institution participant—
means a company that is predominantly engaged in financial activities (as defined in section 102(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5311(a))); and
does not include an agency described in subparagraph (W) of section 5312(a)(2) of title 31, United States Code, or an entity controlled or sponsored by such an agency.
.
Conforming amendment
Section 11(r)(2)(A) of such Act is amended—
in clause (ii)(IV), by striking ; and
and inserting a semicolon;
in clause (iii), by striking the period at the end and inserting ; and
; and
by adding at the end the following new clause:
the available members secure the affirmative vote of not less than nine presidents of the Federal reserve banks.
.
Interest rates on balances maintained at a Federal Reserve bank by depository institutions established by Federal Open Market Committee
Subparagraph (A) of section 19(b)(12) of the Federal Reserve Act (12 U.S.C. 461(b)(12)(A)) is amended by inserting established by the Federal Open Market Committee
after rate or rates
.
Audit reform and transparency for the Board of Governors of the Federal Reserve System
In general
Notwithstanding section 714 of title 31, United States Code, or any other provision of law, the Comptroller General of the United States shall annually complete an audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) of such section 714 within 12 months after the date of the enactment of this Act.
Report
In general
Not later than 90 days after each audit required pursuant to subsection (a) is completed, the Comptroller General—
shall submit to Congress a report on such audit; and
shall make such report available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each subcommittee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests the report.
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.
Repeal of certain limitations
Subsection (b) of section 714 of title 31, United States Code, is amended by striking the second sentence.
Technical and conforming amendments
In general
Section 714 of title 31, United States Code, is amended—
in subsection (d)(3), by striking or (f)
each place such term appears;
in subsection (e), by striking the third undesignated paragraph of section 13
and inserting section 13(3)
; and
by striking subsection (f).
Federal Reserve Act
Subsection (s) (relating to Federal Reserve Transparency and Release of Information
) of section 11 of the Federal Reserve Act (12 U.S.C. 248) is amended—
in paragraph (4)(A), by striking has the same meaning as in section 714(f)(1)(A) of title 31, United States Code
and inserting means a program or facility, including any special purpose vehicle or other entity established by or on behalf of the Board of Governors of the Federal Reserve System or a Federal reserve bank, authorized by the Board of Governors under section 13(3), that is not subject to audit under section 714(e) of title 31, United States Code
;
in paragraph (6), by striking or in section 714(f)(3)(C) of title 31, United States Code, the information described in paragraph (1) and information concerning the transactions described in section 714(f) of such title,
and inserting the information described in paragraph (1)
; and
in paragraph (7), by striking and section 13(3)(C), section 714(f)(3)(C) of title 31, United States Code, and
and inserting , section 13(3)(C), and
.
Establishment of a Centennial Monetary Commission
Findings
Congress finds the following:
The Constitution endows Congress with the power to coin money, regulate the value thereof
.
Following the financial crisis known as the Panic of 1907, Congress established the National Monetary Commission to provide recommendations for the reform of the financial and monetary systems of the United States.
Incorporating several of the recommendations of the National Monetary Commission, Congress created the Federal Reserve System in 1913. As currently organized, the Federal Reserve System consists of the Board of Governors in Washington, District of Columbia, and the Federal Reserve Banks organized into 12 districts around the United States. The stockholders of the 12 Federal Reserve Banks include national and certain State-chartered commercial banks, which operate on a fractional reserve basis.
Originally, Congress gave the Federal Reserve System a monetary mandate to provide an elastic currency, within the context of a gold standard, in response to seasonal fluctuations in the demand for currency.
Congress also gave the Federal Reserve System a financial stability mandate to serve as the lender of last resort to solvent but illiquid banks during a financial crisis.
In 1977, Congress changed the monetary mandate of the Federal Reserve System to a dual mandate for maximum employment and stable prices.
Empirical studies and historical evidence, both within the United States and in other countries, demonstrate that price stability is desirable because both inflation and deflation damage the economy.
The economic challenge of recent years—most notably the bursting of the housing bubble, the financial crisis of 2008, and the ensuing anemic recovery—have occurred at great cost in terms of lost jobs and output.
Policymakers are reexamining the structure and functioning of financial institutions and markets to determine what, if any, changes need to be made to place the financial system on a stronger, more sustainable path going forward.
The Federal Reserve System has taken extraordinary actions in response to the recent economic challenges.
The Federal Open Market Committee has engaged in multiple rounds of quantitative easing, providing unprecedented liquidity to financial markets, while committing to holding short-term interest rates low for a seemingly indefinite period, and pursuing a policy of credit allocation by purchasing Federal agency debt and mortgage-backed securities.
In the wake of the recent extraordinary actions of the Federal Reserve System, Congress—consistent with its constitutional responsibilities and as it has done periodically throughout the history of the United States—has once again renewed its examination of monetary policy.
Central in such examination has been a renewed look at what is the most proper mandate for the Federal Reserve System to conduct monetary policy in the 21st century.
Establishment of a Centennial Monetary Commission
There is established a commission to be known as the Centennial Monetary Commission
(in this section referred to as the Commission
).
Study and report on monetary policy
Study
The Commission shall—
examine how United States monetary policy since the creation of the Board of Governors of the Federal Reserve System in 1913 has affected the performance of the United States economy in terms of output, employment, prices, and financial stability over time;
evaluate various operational regimes under which the Board of Governors of the Federal Reserve System and the Federal Open Market Committee may conduct monetary policy in terms achieving the maximum sustainable level of output and employment and price stability over the long term, including—
discretion in determining monetary policy without an operational regime;
price level targeting;
inflation rate targeting;
nominal gross domestic product targeting (both level and growth rate);
the use of monetary policy rules; and
the gold standard;