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H.R. 10: Financial CHOICE Act of 2017

The text of the bill below is as of Jun 13, 2017 (Referred to Senate Committee).

Source: GPO

IIB

115th CONGRESS

1st Session

H. R. 10

IN THE SENATE OF THE UNITED STATES

June 12, 2017

Received

June 13, 2017

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs

AN ACT

To create hope and opportunity for investors, consumers, 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.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Financial CHOICE Act of 2017.

(b)

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Directed rulemaking repeals.

Title I—Ending Too Big to Fail and Bank Bailouts

Subtitle A—Repeal of the Orderly Liquidation Authority

Sec. 111. Repeal of the orderly liquidation authority.

Subtitle B—Financial Institution Bankruptcy

Sec. 121. General provisions relating to covered financial corporations.

Sec. 122. Liquidation, reorganization, or recapitalization of a covered financial corporation.

Sec. 123. Amendments to title 28, United States Code.

Subtitle C—Ending Government Guarantees

Sec. 131. Repeal of obligation guarantee program.

Sec. 132. Repeal of systemic risk determination in resolutions.

Sec. 133. Restrictions on use of the Exchange Stabilization Fund.

Subtitle D—Eliminating Financial Market Utility Designations

Sec. 141. Repeal of title VIII.

Subtitle E—Reform of the Financial Stability Act of 2010

Sec. 151. Repeal and modification of provisions of the Financial Stability Act of 2010.

Sec. 152. Operational risk capital requirements for banking organizations.

Title II—Demanding Accountability from Wall Street

Subtitle A—SEC Penalties Modernization

Sec. 211. Enhancement of civil penalties for securities laws violations.

Sec. 212. Updated civil money penalties of Public Company Accounting Oversight Board.

Sec. 213. Updated civil money penalty for controlling persons in connection with insider trading.

Sec. 214. Update of certain other penalties.

Sec. 215. Monetary sanctions to be used for the relief of victims.

Sec. 216. GAO report on use of civil money penalty authority by Commission.

Subtitle B—FIRREA Penalties Modernization

Sec. 221. Increase of civil and criminal penalties originally established in the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

Title III—Demanding Accountability from Financial Regulators and Devolving Power Away from Washington

Subtitle A—Cost-Benefit Analyses

Sec. 311. Definitions.

Sec. 312. Required regulatory analysis.

Sec. 313. Rule of construction.

Sec. 314. Public availability of data and regulatory analysis.

Sec. 315. Five-year regulatory impact analysis.

Sec. 316. Retrospective review of existing rules.

Sec. 317. Judicial review.

Sec. 318. Chief Economists Council.

Sec. 319. Conforming amendments.

Sec. 320. Other regulatory entities.

Sec. 321. Avoidance of duplicative or unnecessary analyses.

Subtitle B—Congressional Review of Federal Financial Agency Rulemaking

Sec. 331. Congressional review.

Sec. 332. Congressional approval procedure for major rules.

Sec. 333. Congressional disapproval procedure for nonmajor rules.

Sec. 334. Definitions.

Sec. 335. Judicial review.

Sec. 336. Effective date of certain rules.

Sec. 337. Budgetary effects of rules subject to section 332 of the Financial CHOICE Act of 2017.

Sec. 338. Nonapplicability to monetary policy.

Subtitle C—Judicial Review of Agency Actions

Sec. 341. Scope of judicial review of agency actions.

Subtitle D—Leadership of Financial Regulators

Sec. 351. Federal Deposit Insurance Corporation.

Sec. 352. Federal Housing Finance Agency.

Subtitle E—Congressional Oversight of Appropriations

Sec. 361. Bringing the Federal Deposit Insurance Corporation into the appropriations process.

Sec. 362. Bringing the Federal Housing Finance Agency into the appropriations process.

Sec. 363. Bringing the examination and supervision functions of the National Credit Union Administration into the appropriations process.

Sec. 364. Bringing the Office of the Comptroller of the Currency into the appropriations process.

Sec. 365. Bringing the non-monetary policy related functions of the Board of Governors of the Federal Reserve System into the appropriations process.

Subtitle F—International Processes

Sec. 371. Requirements for international processes.

Subtitle G—Unfunded Mandates Reform

Sec. 381. Definitions.

Sec. 382. Application of the Unfunded Mandates Reform Act.

Subtitle H—Enforcement Coordination

Sec. 391. Policies to minimize duplication of enforcement efforts.

Subtitle I—Penalties for Unauthorized Disclosures

Sec. 392. Criminal penalty for unauthorized disclosures.

Subtitle J—Stop Settlement Slush Funds

Sec. 393. Limitation on donations made pursuant to settlement agreements to which certain departments or agencies are a party.

Title IV—Unleashing Opportunities for Small Businesses, Innovators, and Job Creators by Facilitating Capital Formation

Subtitle A—Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification

Sec. 401. Registration exemption for merger and acquisition brokers.

Sec. 402. Effective date.

Subtitle B—Encouraging Employee Ownership

Sec. 406. Increased threshold for disclosures relating to compensatory benefit plans.

Subtitle C—Small Company Disclosure Simplification

Sec. 411. Exemption from XBRL requirements for emerging growth companies and other smaller companies.

Sec. 412. Analysis by the SEC.

Sec. 413. Report to Congress.

Sec. 414. Definitions.

Subtitle D—Securities and Exchange Commission Overpayment Credit

Sec. 416. Refunding or crediting overpayment of section 31 fees.

Subtitle E—Fair Access to Investment Research

Sec. 421. Safe harbor for investment fund research.

Subtitle F—Accelerating Access to Capital

Sec. 426. Expanded eligibility for use of Form S–3.

Subtitle G—Enhancing the RAISE Act

Sec. 431. Certain accredited investor transactions.

Subtitle H—Small Business Credit Availability

Sec. 436. Business development company ownership of securities of investment advisers and certain financial companies.

Sec. 437. Expanding access to capital for business development companies.

Sec. 438. Parity for business development companies regarding offering and proxy rules.

Subtitle I—Fostering Innovation

Sec. 441. Temporary exemption for low-revenue issuers.

Subtitle J—Small Business Capital Formation Enhancement

Sec. 446. Annual review of government-business forum on capital formation.

Subtitle K—Helping Angels Lead Our Startups

Sec. 451. Definition of angel investor group.

Sec. 452. Clarification of general solicitation.

Subtitle L—Main Street Growth

Sec. 456. Venture exchanges.

Subtitle M—Micro Offering Safe Harbor

Sec. 461. Exemptions for micro-offerings.

Subtitle N—Private Placement Improvement

Sec. 466. Revisions to SEC Regulation D.

Subtitle O—Supporting America’s Innovators

Sec. 471. Investor limitation for qualifying venture capital funds.

Subtitle P—Fix Crowdfunding

Sec. 476. Crowdfunding exemption.

Sec. 477. Exclusion of crowdfunding investors from shareholder cap.

Sec. 478. Preemption of State law.

Sec. 479. Treatment of funding portals.

Subtitle Q—Corporate Governance Reform and Transparency

Sec. 481. Definitions.

Sec. 482. Registration of proxy advisory firms.

Sec. 483. Commission annual report.

Subtitle R—Senior Safe

Sec. 491. Immunity.

Sec. 492. Training required.

Sec. 493. Relationship to State law.

Subtitle S—National Securities Exchange Regulatory Parity

Sec. 496. Application of exemption.

Subtitle T—Private Company Flexibility and Growth

Sec. 497. Shareholder threshold for registration.

Subtitle U—Small Company Capital Formation Enhancements

Sec. 498. JOBS Act-related exemption.

Subtitle V—Encouraging Public Offerings

Sec. 499. Expanding testing the waters and confidential submissions.

Subtitle X—Modernized Offering and Proxy Rules for Closed-End Funds

Sec. 499A. Parity for closed-end companies regarding offering and proxy rules.

Title V—Regulatory Relief for Main Street and Community Financial Institutions

Subtitle A—Preserving Access to Manufactured Housing

Sec. 501. Mortgage originator definition.

Sec. 502. High-Cost mortgage definition.

Subtitle B—Mortgage Choice

Sec. 506. Definition of points and fees.

Subtitle C—Financial Institution Customer Protection

Sec. 511. Requirements for deposit account termination requests and orders.

Sec. 512. Amendments to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

Subtitle D—Portfolio Lending and Mortgage Access

Sec. 516. Safe harbor for certain loans held on portfolio.

Subtitle E—Application of the Expedited Funds Availability Act

Sec. 521. Application of the Expedited Funds Availability Act.

Subtitle F—Small Bank Holding Company Policy Statement

Sec. 526. Changes required to small bank holding company policy statement on assessment of financial and managerial factors.

Subtitle G—Community Institution Mortgage Relief

Sec. 531. Community financial institution mortgage relief.

Subtitle H—Financial Institutions Examination Fairness and Reform

Sec. 536. Timeliness of examination reports.

Subtitle I—National Credit Union Administration Budget Transparency

Sec. 541. Budget transparency for the NCUA.

Subtitle J—Taking Account of Institutions with Low Operation Risk

Sec. 546. Regulations appropriate to business models.

Subtitle K—Federal Savings Association Charter Flexibility

Sec. 551. Option for Federal savings associations to operate as a covered savings association.

Subtitle L—SAFE Transitional Licensing

Sec. 556. Eliminating barriers to jobs for loan originators.

Subtitle M—Right to Lend

Sec. 561. Small business loan data collection requirement.

Subtitle N—Community Bank Reporting Relief

Sec. 566. Short form call report.

Subtitle O—Homeowner Information Privacy Protection

Sec. 571. Study regarding privacy of information collected under the Home Mortgage Disclosure Act of 1975.

Subtitle P—Home Mortgage Disclosure Adjustment

Sec. 576. Depository institutions subject to maintenance of records and disclosure requirements.

Subtitle Q—Protecting Consumers’ Access to Credit

Sec. 581. Rate of interest after transfer of loan.

Subtitle R—NCUA Overhead Transparency

Sec. 586. Fund transparency.

Subtitle S—Housing Opportunities Made Easier

Sec. 591. Clarification of donated services to non-profits.

Subtitle T—Protection of consumer information by consumer reporting agencies

Sec. 596. Sense of Congress related to protection of consumer information by consumer reporting agencies.

Subtitle U—Legitimate Financial Transactions Report

Sec. 597. Treasury report on legitimate financial transactions.

Subtitle V—Dividend Waiver Authority for Mutual Holding Companies

Sec. 598. Dividend waiver authority for mutual holding companies.

Title VI—Regulatory Relief for Strongly Capitalized, Well Managed Banking Organizations

Sec. 601. Capital election.

Sec. 602. Regulatory relief.

Sec. 603. Contingent capital study.

Sec. 604. Study on altering the current prompt corrective action rules.

Sec. 605. Definitions.

Title VII—Empowering Americans to Achieve Financial Independence

Subtitle A—Separation of Powers and Liberty Enhancements

Sec. 711. Consumer Law Enforcement Agency.

Sec. 712. Bringing the Agency into the regular appropriations process.

Sec. 713. Consumer Law Enforcement Agency Inspector General Reform.

Sec. 714. Private parties authorized to compel the Agency to seek sanctions by filing civil actions; Adjudications deemed actions.

Sec. 715. Civil investigative demands to be appealed to courts.

Sec. 716. Agency dual mandate and economic analysis.

Sec. 717. No deference to Agency interpretation.

Subtitle B—Administrative Enhancements

Sec. 721. Advisory opinions.

Sec. 722. Reform of Consumer Financial Civil Penalty Fund.

Sec. 723. Agency pay fairness.

Sec. 724. Elimination of market monitoring functions.

Sec. 725. Reforms to mandatory functional units.

Sec. 726. Repeal of mandatory advisory board.

Sec. 727. Elimination of supervision authority.

Sec. 728. Transfer of old OTS building from OCC to GSA.

Sec. 729. Limitation on Agency authority.

Subtitle C—Policy Enhancements

Sec. 731. Consumer right to financial privacy.

Sec. 732. Repeal of Council authority to set aside Agency rules and requirement of safety and soundness considerations when issuing rules.

Sec. 733. Removal of authority to regulate small-dollar credit.

Sec. 734. Reforming indirect auto financing guidance.

Sec. 735. Removal of Agency UDAAP authority.

Sec. 736. Preservation of UDAP authority for Federal banking regulators.

Sec. 737. Repeal of authority to restrict arbitration.

Title VIII—Capital Markets Improvements

Subtitle A—SEC Reform, Restructuring, and Accountability

Sec. 801. Authorization of appropriations.

Sec. 802. Report on unobligated appropriations.

Sec. 803. SEC Reserve Fund abolished.

Sec. 804. Fees to offset appropriations.

Sec. 805. Commission Federal construction funding prohibition.

Sec. 806. Implementation of recommendations.

Sec. 807. Office of Credit Ratings to report to the Division of Trading and Markets.

Sec. 808. Office of Municipal Securities to report to the Division of Trading and Markets.

Sec. 809. Independence of Commission Ombudsman.

Sec. 810. Investor Advisory Committee improvements.

Sec. 811. Duties of Investor Advocate.

Sec. 812. Elimination of exemption of Small Business Capital Formation Advisory Committee from Federal Advisory Committee Act.

Sec. 813. Internal risk controls.

Sec. 814. Applicability of notice and comment requirements of the Administrative Procedure Act to guidance voted on by the Commission.

Sec. 815. Limitation on pilot programs.

Sec. 816. Procedure for obtaining certain intellectual property.

Sec. 817. Process for closing investigations.

Sec. 818. Enforcement Ombudsman.

Sec. 819. Adequate notice.

Sec. 820. Advisory committee on Commission’s enforcement policies and practices.

Sec. 821. Process to permit recipient of Wells notification to appear before Commission staff in-person.

Sec. 822. Publication of enforcement manual.

Sec. 823. Private parties authorized to compel the Securities and Exchange Commission to seek sanctions by filing civil actions.

Sec. 824. Certain findings required to approve civil money penalties against issuers.

Sec. 825. Repeal of authority of the Commission to prohibit persons from serving as officers or directors.

Sec. 826. Subpoena duration and renewal.

Sec. 827. Elimination of automatic disqualifications.

Sec. 828. Denial of award to culpable whistleblowers.

Sec. 829. Clarification of authority to impose sanctions on persons associated with a broker or dealer.

Sec. 830. Complaint and burden of proof requirements for certain actions for breach of fiduciary duty.

Sec. 831. Congressional access to information held by the Public Company Accounting Oversight Board.

Sec. 832. Abolishing Investor Advisory Group.

Sec. 833. Repeal of requirement for Public Company Accounting Oversight Board to use certain funds for merit scholarship program.

Sec. 834. Reallocation of fines for violations of rules of municipal securities rulemaking board.

Subtitle B—Eliminating Excessive Government Intrusion in the Capital Markets

Sec. 841. Repeal of Department of Labor fiduciary rule and requirements prior to rulemaking relating to standards of conduct for brokers and dealers.

Sec. 842. Exemption from risk retention requirements for nonresidential mortgage.

Sec. 843. Frequency of shareholder approval of executive compensation.

Sec. 844. Shareholder Proposals.

Sec. 845. Prohibition on requiring a single ballot.

Sec. 846. Requirement for municipal advisor for issuers of municipal securities.

Sec. 847. Small issuer exemption from internal control evaluation.

Sec. 848. Streamlining of applications for an exemption from the Investment Company Act of 1940.

Sec. 849. Restriction on recovery of erroneously awarded compensation.

Sec. 850. Exemptive authority for certain provisions relating to registration of nationally recognized statistical rating organizations.

Sec. 851. Risk-based examinations of Nationally Recognized Statistical Rating Organizations.

Sec. 852. Transparency of credit rating methodologies.

Sec. 853. Repeal of certain attestation requirements relating to credit ratings.

Sec. 854. Look-back review by NRSRO.

Sec. 855. Approval of credit rating procedures and methodologies.

Sec. 856. Exception for providing certain material information relating to a credit rating.

Sec. 857. Repeals.

Sec. 858. Exemption of and reporting by private equity fund advisers.

Sec. 859. Records and reports of private funds.

Sec. 860. Definition of accredited investor.

Sec. 861. Repeal of certain provisions requiring a study and report to Congress.

Sec. 862. Repeal.

Subtitle C—Harmonization of Derivatives Rules

Sec. 871. Commissions review and harmonization of rules relating to the regulation of over-the-counter swaps markets.

Sec. 872. Treatment of transactions between affiliates.

Title IX—Repeal of the Volcker Rule and Other Provisions

Sec. 901. Repeals.

Title X—Fed Oversight Reform and Modernization

Sec. 1001. Requirements for policy rules of the Federal Open Market Committee.

Sec. 1002. Federal Open Market Committee blackout period.

Sec. 1003. Public transcripts of FOMC meetings.

Sec. 1004. Membership of Federal Open Market Committee.

Sec. 1005. Frequency of testimony of the Chairman of the Board of Governors of the Federal Reserve System to Congress.

Sec. 1006. Vice Chairman for Supervision report requirement.

Sec. 1007. Salaries, financial disclosures, and office staff of the Board of Governors of the Federal Reserve System.

Sec. 1008. Amendments to powers of the Board of Governors of the Federal Reserve System.

Sec. 1009. Interest rates on balances maintained at a Federal Reserve bank by depository institutions established by Federal Open Market Committee.

Sec. 1010. Audit reform and transparency for the Board of Governors of the Federal Reserve System.

Sec. 1011. Establishment of a Centennial Monetary Commission.

Title XI—Improving Insurance Coordination through an Independent Advocate

Sec. 1101. Repeal of the Federal Insurance Office; Creation of the Office of the Independent Insurance Advocate.

Sec. 1102. Treatment of covered agreements.

Title XII—Technical corrections

Sec. 1201. Table of contents; Definitional corrections.

Sec. 1202. Antitrust savings clause corrections.

Sec. 1203. Title I corrections.

Sec. 1204. Title III corrections.

Sec. 1205. Title IV correction.

Sec. 1206. Title VI corrections.

Sec. 1207. Title VII corrections.

Sec. 1208. Title IX corrections.

Sec. 1209. Title X corrections.

Sec. 1210. Title XII correction.

Sec. 1211. Title XIV correction.

Sec. 1212. Technical corrections to other statutes.

2.

Directed rulemaking repeals

With respect to any directed rulemaking required by a provision of law repealed by this Act, to the extent any rule was issued or revised pursuant to such directed rulemaking, such rule or revision shall have no force or effect.

I

Ending Too Big to Fail and Bank Bailouts

A

Repeal of the Orderly Liquidation Authority

111.

Repeal of the orderly liquidation authority

(a)

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.

(b)

Conforming amendments

(1)

Dodd-Frank Wall Street Reform and Consumer Protection Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act is amended—

(A)

in the table of contents for such Act, by striking all items relating to title II;

(B)

in section 165(d)—

(i)

in paragraph (1), by striking , the Council, and the Corporation and inserting and the Council;

(ii)

in paragraph (2), by striking , the Council, and the Corporation and inserting and the Council;

(iii)

in paragraph (3), by striking and the Corporation;

(iv)

in paragraph (4)—

(I)

by striking and the Corporation jointly determine and inserting determines;

(II)

by striking their and inserting its;

(III)

in subparagraph (A), by striking and the Corporation; and

(IV)

in subparagraph (B), by striking and the Corporation;

(v)

in paragraph (5)—

(I)

in subparagraph (A), by striking and the Corporation may jointly and inserting may; and

(II)

in subparagraph (B)—

(aa)

by striking and the Corporation each place such term appears;

(bb)

by striking may jointly and inserting may;

(cc)

by striking have jointly and inserting has;

(vi)

in paragraph (6), by striking , a receiver appointed under title II,; and

(vii)

by amending paragraph (8) to read as follows:

(8)

Rules

Not later than 12 months after enactment of this paragraph, the Board of Governors shall issue final rules implementing this section.

; and

(C)

in section 716(g), by striking or a covered financial company under title II.

(2)

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.

(3)

Federal Reserve Act

Section 13(3) of the Federal Reserve Act is amended—

(A)

in subparagraph (B)—

(i)

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

(ii)

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

(B)

by striking subparagraph (E).

B

Financial Institution Bankruptcy

121.

General provisions relating to covered financial corporations

(a)

Definition

Section 101 of title 11, United States Code, is amended by inserting the following after paragraph (9):

(9A)

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)

a bank holding company, as defined in section 2(a) of the Bank Holding Company Act of 1956; or

(B)

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—

(i)

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

(ii)

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.

.

(b)

Applicability of chapters

Section 103 of title 11, United States Code, is amended by adding at the end the following:

(l)

Subchapter V of chapter 11 of this title applies only in a case under chapter 11 concerning a covered financial corporation.

.

(c)

Who may be a debtor

Section 109 of title 11, United States Code, is amended—

(1)

in subsection (b)—

(A)

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

(B)

in paragraph (3)(B), by striking the period at the end and inserting ; or; and

(C)

by adding at the end the following:

(4)

a covered financial corporation.

; and

(2)

in subsection (d)—

(A)

by striking and before an uninsured State member bank;

(B)

by striking or before a corporation; and

(C)

by inserting , or a covered financial corporation after Federal Deposit Insurance Corporation Improvement Act of 1991.

(d)

Conversion to chapter 7

Section 1112 of title 11, United States Code, is amended by adding at the end the following:

(g)

Notwithstanding section 109(b), the court may convert a case under subchapter V to a case under chapter 7 if—

(1)

a transfer approved under section 1185 has been consummated;

(2)

the court has ordered the appointment of a special trustee under section 1186; and

(3)

the court finds, after notice and a hearing, that conversion is in the best interest of the creditors and the estate.

.

(e)
(1)

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.

(2)

Section 1129(a) of title 11, United States Code, is amended by inserting after paragraph (16) the following:

(17)

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.

(18)

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.

.

(f)

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.

122.

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 (and conforming the table of contents for such chapter accordingly):

V

Liquidation, Reorganization, or Recapitalization of a Covered Financial Corporation

1181.

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.

1182.

Definitions for this subchapter

In this subchapter, the following definitions shall apply:

(1)

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

(2)

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).

(3)

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).

(4)

The term contractual right means a contractual right of a kind defined in section 555, 556, 559, 560, or 561.

(5)

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.

(6)

The term special trustee means the trustee of a trust formed under section 1186(a)(1).

1183.

Commencement of a case concerning a covered financial corporation

(a)

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.

(b)

The commencement of a case under subsection (a) constitutes an order for relief under this subchapter.

(c)

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 such a petition or a transfer under section 1185 or section 1186, whether prior to or after commencement of the case.

(d)

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.

1184.

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.

1185.

Special transfer of property of the estate

(a)

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.

(b)

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—

(1)

the debtor;

(2)

the holders of the 20 largest secured claims against the debtor;

(3)

the holders of the 20 largest unsecured claims against the debtor;

(4)

counterparties to any debt, executory contract, unexpired lease, and qualified financial contract requested to be transferred under this section;

(5)

the Board;

(6)

the Federal Deposit Insurance Corporation;

(7)

the Secretary of the Treasury and the Office of the Comptroller of the Currency of the Treasury;

(8)

the Commodity Futures Trading Commission;

(9)

the Securities and Exchange Commission;

(10)

the United States trustee or bankruptcy administrator; and

(11)

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.

(c)

The court may not order a transfer under this section unless the court determines, based upon a preponderance of the evidence, that—

(1)

the transfer under this section is necessary to prevent serious adverse effects on financial stability in the United States;

(2)

the transfer does not provide for the assumption of any capital structure debt by the bridge company;

(3)

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—

(A)
(i)

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

(ii)

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

(B)

such property is being transferred to the bridge company in accordance with the provisions of section 363;

(4)

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;

(5)

the transfer does not provide for the transfer of the equity of the debtor;

(6)

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;

(7)

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;

(8)

after giving effect to the transfer, adequate provision has been made for the fees, costs, and expenses of the estate and special trustee; and

(9)

the bridge company will have governing documents, and initial directors and senior officers, that are in the best interest of creditors and the estate.

(d)

Immediately before a transfer under this section, the bridge company that is the recipient of the transfer shall—

(1)

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

(2)

have equity securities that are property of the estate, which may be sold or distributed in accordance with this title.

1186.

Special trustee

(a)
(1)

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.

(2)

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.

(b)

The trust agreement governing the trust shall provide—

(1)

for the payment of the fees, costs, expenses, and indemnities of the special trustee from the assets of the debtor’s estate;

(2)

that the special trustee provide—

(A)

quarterly reporting to the estate, which shall be filed with the court; and

(B)

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;

(3)

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—

(A)

any change in a director or senior officer of the bridge company;

(B)

any modification to the governing documents of the bridge company; and

(C)

any material corporate action of the bridge company, including—

(i)

recapitalization;

(ii)

a material borrowing;

(iii)

termination of an intercompany debt or guarantee;

(iv)

a transfer of a substantial portion of the assets of the bridge company; or

(v)

the issuance or sale of any securities of the bridge company;

(4)

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;

(5)

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;

(6)

the process and guidelines for the replacement of the special trustee; and

(7)

that the property held in trust by the special trustee is subject to distribution in accordance with subsection (c).

(c)
(1)

The special trustee shall distribute the assets held in trust—

(A)

if the court confirms a plan in the case, in accordance with the plan on the effective date of the plan; or

(B)

if the case is converted to a case under chapter 7, as ordered by the court.

(2)

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.

(d)

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.

1187.

Temporary and supplemental automatic stay; assumed debt

(a)
(1)

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)

a default by the debtor under any such debt, contract, lease, or agreement; or

(B)

a provision in such debt, contract, lease, or agreement, or in applicable nonbankruptcy law, that is conditioned on—

(i)

the insolvency or financial condition of the debtor at any time before the closing of the case;

(ii)

the commencement of a case under this title concerning the debtor;

(iii)

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

(iv)

a credit rating agency rating, or absence or withdrawal of a credit rating agency rating—

(I)

of the debtor at any time after the commencement of the case;

(II)

of an affiliate during the period from the commencement of the case until 48 hours after such order is entered;

(III)

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—

(aa)

the bridge company; or

(bb)

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

(IV)

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—

(aa)

the bridge company; or

(bb)

the affiliate, if all of the direct or indirect interests in the affiliate that are property of the estate are transferred under section 1185.

(2)

A debt, contract, lease, or agreement described in this paragraph is—

(A)

any debt (other than capital structure debt), executory contract, or unexpired lease of the debtor (other than a qualified financial contract);

(B)

any agreement under which the debtor issued or is obligated for debt (other than capital structure debt);

(C)

any debt, executory contract, or unexpired lease of an affiliate (other than a qualified financial contract); or

(D)

any agreement under which an affiliate issued or is obligated for debt.

(3)

The stay under this subsection terminates—

(A)

for the benefit of the debtor, upon the earliest of—

(i)

48 hours after the commencement of the case;

(ii)

assumption of the debt, contract, lease, or agreement by the bridge company under an order authorizing a transfer under section 1185;

(iii)

a final order of the court denying the request for a transfer under section 1185; or

(iv)

the time the case is dismissed; and

(B)

for the benefit of an affiliate, upon the earliest of—

(i)

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;

(ii)

a final order by the court denying the request for a transfer under section 1185;

(iii)

48 hours after the commencement of the case if the court has not ordered a transfer under section 1185; or

(iv)

the time the case is dismissed.

(4)

Subsections (d), (e), (f), and (g) of section 362 apply to a stay under this subsection.

(b)

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—

(1)

prohibits, restricts, or conditions the assignment of the debt, contract, lease, or agreement; or

(2)

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—

(A)

the assignment of the debt, contract, lease, or agreement; or

(B)

a change in control of any party to the debt, contract, lease, or agreement.

(c)
(1)

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—

(A)

of the kind described in subsection (a)(1)(B) as applied to the debtor;

(B)

that prohibits, restricts, or conditions the assignment of the debt, contract, lease, or agreement; or

(C)

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—

(i)

the assignment of the debt, contract, lease, or agreement; or

(ii)

a change in control of any party to the debt, contract, lease, or agreement.

(2)

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—

(A)

shall cure the default;

(B)

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

(C)

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).

1188.

Treatment of qualified financial contracts and affiliate contracts

(a)

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—

(1)

to cause the modification, liquidation, termination, or acceleration of a qualified financial contract of the debtor or an affiliate;

(2)

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

(3)

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.

(b)
(1)

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.

(2)

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.

(c)

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—

(1)

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;

(2)

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;

(3)

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

(4)

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.

(d)

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.

(e)

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—

(1)

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);

(2)

the bridge company assumes—

(A)

any guarantee or other credit enhancement issued by the debtor relating to the agreement of the affiliate; and

(B)

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

(3)

any property of the estate that directly serves as collateral for the guarantee or credit enhancement is transferred to the bridge company.

1189.

Licenses, permits, and registrations

(a)

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—

(1)

the insolvency or financial condition of the debtor at any time before the closing of the case;

(2)

the commencement of a case under this title concerning the debtor;

(3)

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

(4)

a transfer under section 1185.

(b)

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.

1190.

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.

1191.

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.

1192.

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.

.

123.

Amendments to title 28, United States Code

(a)

Amendment to chapter 13

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

(a)
(1)

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.

(2)

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.

(3)

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.

(b)

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.

(c)

In this section, the term covered financial corporation has the meaning given that term in section 101(9A) of title 11.

.

(b)

Amendment to section 1334 of title 28

Section 1334 of title 28, United States Code, is amended by adding at the end the following:

(f)

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.

.

(c)

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.

.

C

Ending Government Guarantees

131.

Repeal of obligation guarantee program

(a)

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:

(1)

Section 1104.

(2)

Section 1105.

(3)

Section 1106.

(b)

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.

132.

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.

133.

Restrictions on use of the Exchange Stabilization Fund

(a)

In general

Section 5302 of title 31, United States Code, is amended by adding at the end the following:

(e)

Amounts in the fund may not be used for the establishment of a guaranty program for any nongovernmental entity.

.

(b)

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.

D

Eliminating Financial Market Utility Designations

141.

Repeal of title VIII

(a)

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.

(b)

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.

E

Reform of the Financial Stability Act of 2010

151.

Repeal and modification of provisions of the Financial Stability Act of 2010

(a)

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:

(1)

Subtitle B.

(2)

Section 113.

(3)

Section 114.

(4)

Section 115.

(5)

Section 116.

(6)

Section 117.

(7)

Section 119.

(8)

Section 120.

(9)

Section 121.

(10)

Section 161.

(11)

Section 162.

(12)

Section 164.

(13)

Section 166.

(14)

Section 167.

(15)

Section 168.

(16)

Section 170.

(17)

Section 172.

(18)

Section 174.

(19)

Section 175.

(b)

Additional modifications

The Financial Stability Act of 2010 (12 U.S.C. 5311 et seq.) is amended—

(1)

in section 102(a), by striking paragraph (5);

(2)

in section 111—

(A)

in subsection (b)—

(i)

in paragraph (1)—

(I)

by striking who shall each and inserting who shall, except as provided below, each; and

(II)

by striking subparagraphs (B) through (J) and inserting the following:

(B)

each member of the Board of Governors, who shall collectively have 1 vote on the Council;

(C)

the Comptroller of the Currency;

(D)

the Director of the Consumer Law Enforcement Agency;

(E)

each member of the Commission, who shall collectively have 1 vote on the Council;

(F)

each member of the Corporation, who shall collectively have 1 vote on the Council;

(G)

each member of the Commodity Futures Trading Commission, who shall collectively have 1 vote on the Council;

(H)

the Director of the Federal Housing Finance Agency;

(I)

each member of the National Credit Union Administration Board, who shall collectively have 1 vote on the Council; and

(J)

the Independent Insurance Advocate.

;

(ii)

in paragraph (2)—

(I)

by striking subparagraphs (A) and (B); and

(II)

by redesignating subparagraphs (C), (D), and (E) as subparagraphs (A), (B), and (C), respectively; and

(iii)

by adding at the end the following:

(4)

Voting by multi-person entity

(A)

Voting within the entity

An entity described under subparagraph (B), (E), (F), (G), or (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.

(B)

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.

;

(B)

in subsection (c)(1), by striking The independent member of the Council shall serve for a term of 6 years, and each nonvoting member described in subparagraphs (C), (D), and (E) of and inserting Each nonvoting members described under;

(C)

in subsection (e), by adding at the end the following:

(3)

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.

(4)

Congressional oversight

All public meetings of the Council shall be open to the attendance by members of the authorization and oversight committees of the House of Representatives and the Senate.

(5)

Transcription requirement for non-public meetings

The Council shall create and preserve transcripts for all non-public meetings of the Council.

(6)

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 authorization and oversight committees of the House of Representatives and the Senate.

;

(D)

by striking subsection (g) (relating to the nonapplicability of FACA);

(E)

by inserting after subsection (f) the following:

(g)

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).

(h)

Confidential congressional briefings

The Chairperson shall at regular times but not less than annually provide confidential briefings to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate, which may in the discretion of the Chairman of the respective committee be attended by any combination of the committee’s members or staff.

; and

(F)

by redesignating subsections (h) through (j) as subsections (i) through (k), respectively;

(3)

in section 112—

(A)

in subsection (a)(2)—

(i)

in subparagraph (A), by striking the Federal Insurance Office and, if necessary to assess risks to the United States financial system, direct the Office of Financial Research to and inserting and, if necessary to assess risks to the United States financial system,;

(ii)

by striking subparagraphs (B), (H), (I), and (J);

(iii)

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;

(iv)

in subparagraph (J), as so redesignated—

(I)

in clause (iii), by adding and at the end;

(II)

by striking clauses (iv) and (v); and

(III)

by redesignating clause (vi) as clause (iv); and

(B)

in subsection (d)—

(i)

in paragraph (1), by striking the Office of Financial Research, member agencies, and the Federal Insurance Office and inserting member agencies;

(ii)

in paragraph (2), by striking the Office of Financial Research, any member agency, and the Federal Insurance Office, and inserting member agencies;

(iii)

in paragraph (3)—

(I)

by striking , acting through the Office of Financial Research, each place it appears; and

(II)

in subparagraph (B), by striking the Office of Financial Research or; and

(iv)

in paragraph (5)(A), by striking , the Office of Financial Research,;

(4)

by amending section 118 to read as follows:

118.

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.

;

(5)

in section 163—

(A)

by striking subsection (a);

(B)

by redesignating subsection (b) as subsection (a); and

(C)

in subsection (a), as so redesignated—

(i)

by striking or a nonbank financial company supervised by the Board of Governors each place such term appears;

(ii)

in paragraph (4), by striking In addition and inserting the following:

(A)

In general

In addition

; and

(iii)

by adding at the end the following:

(B)

Exception for qualifying banking organization

Subparagraph (A) shall not apply to a proposed acquisition by a qualifying banking organization, as defined under section 605 of the Financial CHOICE Act of 2017.

; and

(6)

in section 165—

(A)

by striking nonbank financial companies supervised by the Board of Governors and each place such term appears;

(B)

by striking nonbank financial company supervised by the Board of Governors and each place such term appears;

(C)

in subsection (a), by amending paragraph (2) to read as follows:

(2)

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.

;

(D)

in subsection (b)—

(i)

in paragraph (1)(B)(iv), by striking , on its own or pursuant to a recommendation made by the Council in accordance with section 115,;

(ii)

in paragraph (2)—

(I)

by striking foreign nonbank financial company supervised by the Board of Governors or;

(II)

by striking shall— and all that follows through give due and inserting shall give due;

(III)

in subparagraph (A), by striking ; and and inserting a period; and

(IV)

by striking subparagraph (B);

(iii)

in paragraph (3)—

(I)

in subparagraph (A)—

(aa)

by striking clause (i);

(bb)

by redesignating clauses (ii), (iii), and (iv) as clauses (i), (ii), and (iii), respectively; and

(cc)

in clause (iii), as so redesignated, by adding and at the end;

(II)

by striking subparagraphs (B) and (C); and

(III)

by redesignating subparagraph (D) as subparagraph (B); and

(iv)

in paragraph (4), by striking a nonbank financial company supervised by the Board of Governors or;

(E)

in subsection (c)—

(i)

in paragraph (1), by striking under section 115(c); and

(ii)

in paragraph (2)—

(I)

by amending subparagraph (A) to read as follows:

(A)

any recommendations of the Council;

; and

(II)

in subparagraph (D), by striking nonbank financial company supervised by the Board of Governors or;

(F)

in subsection (d)—

(i)

by striking a nonbank financial company supervised by the Board of Governors or each place such term appears;

(ii)

in paragraph (1), by striking periodically and inserting not more often than every 2 years;

(iii)

in paragraph (3)—

(I)

by striking The Board and inserting the following:

(A)

In general

The Board

;

(II)

by striking shall review and inserting the following:

shall—

(i)

review

;

(III)

by striking the period and inserting ; and; and

(IV)

by adding at the end the following:

(ii)

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.

(B)

Disclosure of assessment framework

The Board of Governors shall publicly disclose, including on the website of the Board of Governors, 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.

.

(iv)

in paragraph (6), by striking nonbank financial company supervised by the Board, any bank holding company, and inserting bank holding company;

(G)

in subsection (e)—

(i)

in paragraph (1), by striking a nonbank financial company supervised by the Board of Governors or;

(ii)

in paragraph (3), by striking the nonbank financial company supervised by the Board of Governors or each place such term appears; and

(iii)

in paragraph (4), by striking a nonbank financial company supervised by the Board of Governors or;

(H)

in subsection (g)(1), by striking and any nonbank financial company supervised by the Board of Governors;

(I)

in subsection (h)—

(i)

by striking paragraph (1);

(ii)

by redesignating paragraphs (2), (3), and (4) as paragraphs (1), (2), and (3), respectively;

(iii)

in paragraph (1), as so redesignated, by striking paragraph (3) each place such term appears and inserting paragraph (2); and

(iv)

in paragraph (2), as so redesignated—

(I)

in subparagraph (A), by striking the nonbank financial company supervised by the Board of Governors or bank holding company described in subsection (a), as applicable and inserting a bank holding company described in subsection (a); and

(II)

in subparagraph (B), by striking the nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a), as applicable and inserting a bank holding company described in subsection (a);

(J)

in subsection (i)—

(i)

in paragraph (1)—

(I)

in subparagraph (A), by striking , in coordination with the appropriate primary financial regulatory agencies and the Federal Insurance Office,;

(II)

in subparagraph (B)—

(aa)

by amending clause (i) to read as follows:

(i)

shall—

(I)

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 the Board of Governors shall not carry out any such evaluation until 60 days after such regulations are issued; and

(II)

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;

;

(bb)

in clause (ii), by striking and nonbank financial companies;

(cc)

in clause (iv), by striking and at the end;

(dd)

in clause (v), by striking the period and inserting the following: , including any results of a resubmitted test;; and

(ee)

by adding at the end the following:

(vi)

shall, in establishing the severely adverse condition under clause (i), provide detailed consideration of the model’s effects on financial stability and the cost and availability of credit;

(vii)

shall, in developing the models and methodologies and providing them for notice and comment under this subparagraph, publish a process to test the models and methodologies for their potential to magnify systemic and institutional risks instead of facilitating increased resiliency;

(viii)

shall design and publish a process to test and document the sensitivity and uncertainty associated with the model system’s data quality, specifications, and assumptions; and

(ix)

shall communicate the range and sources of uncertainty surrounding the models and methodologies.

; and

(III)

by adding at the end the following:

(C)

CCAR requirements

(i)

Parameters and consequences applicable to CCAR

The requirements of subparagraph (B) shall apply to CCAR.

(ii)

Two-year limitation

The Board of Governors may not subject a company to CCAR more than once every two years.

(iii)

Mid-cycle resubmission

If a company receives a quantitative objection to, or otherwise desires to amend the company’s capital plan, the company may file a new streamlined plan at any time after a capital planning exercise has been completed and before a subsequent capital planning exercise.

(iv)

Limitation on qualitative capital planning objections

In carrying out CCAR, the Board of Governors may not object to a company’s capital plan on the basis of qualitative deficiencies in the company’s capital planning process.

(v)

Company inquiries

The Board of Governors shall establish and publish procedures for responding to inquiries from companies subject to CCAR, including establishing the time frame in which such responses will be made, and make such procedures publicly available.

(vi)

CCAR defined

For purposes of this subparagraph and subparagraph (E), the term CCAR means the Comprehensive Capital Analysis and Review established by the Board of Governors.

; and

(ii)

in paragraph (2)—

(I)

in subparagraph (A)—

(aa)

by striking a bank holding company and inserting bank holding company;

(bb)

by striking semiannual and inserting annual;

(cc)

by striking All other financial companies and inserting All other bank holding companies; and

(dd)

by striking and are regulated by a primary Federal financial regulatory agency;

(II)

in subparagraph (B)—

(aa)

by striking and to its primary financial regulatory agency; and

(bb)

by striking primary financial regulatory agency the second time it appears and inserting Board of Governors; and

(III)

in subparagraph (C)—

(aa)

by striking Each Federal primary financial regulatory agency, in coordination with the Board of Governors and the Federal Insurance Office, and inserting The Board of Governors; and

(bb)

by striking consistent and comparable.

(K)

in subsection (j)—

(i)

in paragraph (1), by striking or a nonbank financial company supervised by the Board of Governors; and

(ii)

in paragraph (2), by striking the factors described in subsections (a) and (b) of section 113 and any other and inserting any;

(L)

in subsection (k)(1), by striking or nonbank financial company supervised by the Board of Governors; and

(M)

by adding at the end the following:

(l)

Exemption for qualifying banking organizations

This section shall not apply to a proposed acquisition by a qualifying banking organization, as defined under section 605 of the Financial CHOICE Act of 2017.

.

(c)

Treatment of other resolution plan requirements

(1)

In general

With respect to an appropriate Federal banking agency that requires a banking organization to submit to the agency a resolution plan not described under section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act—

(A)

the agency shall comply with the requirements of paragraphs (3) and (4) of such section 165(d);

(B)

the agency may not require the submission of such a resolution plan more often than every 2 years; and

(C)

paragraphs (6) and (7) of such section 165(d) shall apply to such a resolution plan.

(2)

Definitions

For purposes of this subsection, the terms appropriate Federal banking agency and banking organization have the meaning given those terms, respectively, under section 105.

(d)

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—

(1)

by striking Upon receiving and inserting the following:

(A)

In general

Upon receiving

;

(2)

by striking Notwithstanding any other provision and inserting the following:

(B)

Immediate action

(i)

In general

Notwithstanding any other provision

; and

(3)

by adding at the end the following:

(ii)

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).

.

(e)

Concentration limits applied only to banking organizations

Section 14 of the Bank Holding Company Act of 1956 (12 U.S.C. 1852) is amended—

(1)

by striking financial company each place such term appears and inserting banking organization;

(2)

in subsection (a)—

(A)

by amending paragraph (2) to read as follows:

(2)

the term banking organization means—

(A)

an insured depository institution;

(B)

a bank holding company;

(C)

a savings and loan holding company;

(D)

a company that controls an insured depository institution; and

(E)

a foreign bank or company that is treated as a bank holding company for purposes of this Act; and

;

(B)

in paragraph (3)—

(i)

in subparagraph (A)(ii), by adding and at the end;

(ii)

in subparagraph (B)(ii), by striking ; and and inserting a period; and

(iii)

by striking subparagraph (C); and

(3)

in subsection (b), by striking financial companies and inserting banking organizations.

(f)

Conforming amendment

Section 3502(5) of title 44, United States Code, is amended by striking the Office of Financial Research,.

(g)

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.

152.

Operational risk capital requirements for banking organizations

(a)

In general

An appropriate Federal banking agency may not establish an operational risk capital requirement for banking organizations, unless such requirement—

(1)

is based on the risks posed by a banking organization’s current activities and businesses;

(2)

is appropriately sensitive to the risks posed by such current activities and businesses;

(3)

is determined under a forward-looking assessment of potential losses that may arise out of a banking organization’s current activities and businesses, which is not solely based on a banking organization’s historical losses; and

(4)

permits adjustments based on qualifying operational risk mitigants.

(b)

Definitions

For purposes of this section, the terms appropriate Federal banking agency and banking organization have the meaning given those terms, respectively, under section 605.

II

Demanding Accountability from Wall Street

A

SEC Penalties Modernization

211.

Enhancement of civil penalties for securities laws violations

(a)

Updated civil money penalties

(1)

Securities Act of 1933

(A)

Money penalties in administrative actions

Section 8A(g)(2) of the Securities Act of 1933 (15 U.S.C. 77h–1(g)(2)) is amended—

(i)

in subparagraph (A)—

(I)

by striking $7,500 and inserting $10,000; and

(II)

by striking $75,000 and inserting $100,000;

(ii)

in subparagraph (B)—

(I)

by striking $75,000 and inserting $100,000; and

(II)

by striking $375,000 and inserting $500,000; and

(iii)

by striking subparagraph (C) and inserting the following:

(C)

Third tier

(i)

In general

Notwithstanding subparagraphs (A) and (B), the amount of penalty for each such act or omission shall not exceed the amount specified in clause (ii) if—

(I)

the act or omission described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and

(II)

such act or omission directly or indirectly resulted in—

(aa)

substantial losses or created a significant risk of substantial losses to other persons; or

(bb)

substantial pecuniary gain to the person who committed the act or omission.

(ii)

Maximum amount of penalty

The amount referred to in clause (i) is the greatest of—

(I)

$300,000 for a natural person or $1,450,000 for any other person;

(II)

3 times the gross amount of pecuniary gain to the person who committed the act or omission; or

(III)

the amount of losses incurred by victims as a result of the act or omission.

.

(B)

Money penalties in civil actions

Section 20(d)(2) of the Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is amended—

(i)

in subparagraph (A)—

(I)

by striking $5,000 and inserting $10,000; and

(II)

by striking $50,000 and inserting $100,000;

(ii)

in subparagraph (B)—

(I)

by striking $50,000 and inserting $100,000; and

(II)

by striking $250,000 and inserting $500,000; and

(iii)

by striking subparagraph (C) and inserting the following:

(C)

Third tier

(i)

In general

Notwithstanding subparagraphs (A) and (B), the amount of penalty for each such violation shall not exceed the amount specified in clause (ii) if—

(I)

the violation described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and

(II)

such violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons.

(ii)

Maximum amount of penalty

The amount referred to in clause (i) is the greatest of—

(I)

$300,000 for a natural person or $1,450,000 for any other person;

(II)

3 times the gross amount of pecuniary gain to such defendant as a result of the violation; or

(III)

the amount of losses incurred by victims as a result of the violation.

.

(2)

Securities Exchange Act of 1934

(A)

Money penalties in civil actions

Section 21(d)(3)(B) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended—

(i)

in clause (i)—

(I)

by striking $5,000 and inserting $10,000; and

(II)

by striking $50,000 and inserting $100,000;

(ii)

in clause (ii)—

(I)

by striking $50,000 and inserting $100,000; and

(II)

by striking $250,000 and inserting $500,000; and

(iii)

by striking clause (iii) and inserting the following:

(iii)

Third tier

(I)

In general

Notwithstanding clauses (i) and (ii), the amount of penalty for each such violation shall not exceed the amount specified in subclause (II) if—

(aa)

the violation described in subparagraph (A) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and

(bb)

such violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons.

(II)

Maximum amount of penalty

The amount referred to in subclause (I) is the greatest of—

(aa)

$300,000 for a natural person or $1,450,000 for any other person;

(bb)

3 times the gross amount of pecuniary gain to such defendant as a result of the violation; or

(cc)

the amount of losses incurred by victims as a result of the violation.

.

(B)

Money penalties in administrative actions

Section 21B(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78u–2(b)) is amended—

(i)

in paragraph (1)—

(I)

by striking $5,000 and inserting $10,000; and

(II)

by striking $50,000 and inserting $100,000;

(ii)

in paragraph (2)—

(I)

by striking $50,000 and inserting $100,000; and

(II)

by striking $250,000 and inserting $500,000; and

(iii)

by striking paragraph (3) and inserting the following:

(3)

Third tier

(A)

In general

Notwithstanding paragraphs (1) and (2), the amount of penalty for each such act or omission shall not exceed the amount specified in subparagraph (B) if—

(i)

the act or omission described in subsection (a) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and

(ii)

such act or omission directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons or resulted in substantial pecuniary gain to the person who committed the act or omission.

(B)

Maximum amount of penalty

The amount referred to in subparagraph (A) is the greatest of—

(i)

$300,000 for a natural person or $1,450,000 for any other person;

(ii)

3 times the gross amount of pecuniary gain to the person who committed the act or omission; or

(iii)

the amount of losses incurred by victims as a result of the act or omission.

.

(3)

Investment Company Act of 1940

(A)

Money penalties in administrative actions

Section 9(d)(2) of the Investment Company Act of 1940 (15 U.S.C. 80a–9(d)(2)) is amended—

(i)

in subparagraph (A)—

(I)

by striking $5,000 and inserting $10,000; and

(II)

by striking $50,000 and inserting $100,000;

(ii)

in subparagraph (B)—

(I)

by striking $50,000 and inserting $100,000; and

(II)

by striking $250,000 and inserting $500,000; and

(iii)

by striking subparagraph (C) and inserting the following:

(C)

Third tier

(i)

In general

Notwithstanding subparagraphs (A) and (B), the amount of penalty for each such act or omission shall not exceed the amount specified in clause (ii) if—

(I)

the act or omission described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and

(II)

such act or omission directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons or resulted in substantial pecuniary gain to the person who committed the act or omission.

(ii)

Maximum amount of penalty

The amount referred to in clause (i) is the greatest of—

(I)

$300,000 for a natural person or $1,450,000 for any other person;

(II)

3 times the gross amount of pecuniary gain to the person who committed the act or omission; or

(III)

the amount of losses incurred by victims as a result of the act or omission.

.

(B)

Money penalties in civil actions

Section 42(e)(2) of the Investment Company Act of 1940 (15 U.S.C. 80a–41(e)(2)) is amended—

(i)

in subparagraph (A)—

(I)

by striking $5,000 and inserting $10,000; and

(II)

by striking $50,000 and inserting $100,000;

(ii)

in subparagraph (B)—

(I)

by striking $50,000 and inserting $100,000; and

(II)

by striking $250,000 and inserting $500,000; and

(iii)

by striking subparagraph (C) and inserting the following:

(C)

Third tier

(i)

In general

Notwithstanding subparagraphs (A) and (B), the amount of penalty for each such violation shall not exceed the amount specified in clause (ii) if—

(I)

the violation described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and

(II)

such violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons.

(ii)

Maximum amount of penalty

The amount referred to in clause (i) is the greatest of—

(I)

$300,000 for a natural person or $1,450,000 for any other person;

(II)

3 times the gross amount of pecuniary gain to such defendant as a result of the violation; or

(III)

the amount of losses incurred by victims as a result of the violation.

.

(4)

Investment Advisers Act of 1940

(A)

Money penalties in administrative actions

Section 203(i)(2) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3(i)(2)) is amended—

(i)

in subparagraph (A)—

(I)

by striking $5,000 and inserting $10,000; and

(II)

by striking $50,000 and inserting $100,000;

(ii)

in subparagraph (B)—

(I)

by striking $50,000 and inserting $100,000; and

(II)

by striking $250,000 and inserting $500,000; and

(iii)

by striking subparagraph (C) and inserting the following:

(C)

Third tier

(i)

In general

Notwithstanding subparagraphs (A) and (B), the amount of penalty for each such act or omission shall not exceed the amount specified in clause (ii) if—

(I)

the act or omission described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and

(II)

such act or omission directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons or resulted in substantial pecuniary gain to the person who committed the act or omission.

(ii)

Maximum amount of penalty

The amount referred to in clause (i) is the greatest of—

(I)

$300,000 for a natural person or $1,450,000 for any other person;

(II)

3 times the gross amount of pecuniary gain to the person who committed the act or omission; or

(III)

the amount of losses incurred by victims as a result of the act or omission.

.

(B)

Money penalties in civil actions

Section 209(e)(2) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–9(e)(2)) is amended—

(i)

in subparagraph (A)—

(I)

by striking $5,000 and inserting $10,000; and

(II)

by striking $50,000 and inserting $100,000;

(ii)

in subparagraph (B)—

(I)

by striking $50,000 and inserting $100,000; and

(II)

by striking $250,000 and inserting $500,000; and

(iii)

by striking subparagraph (C) and inserting the following:

(C)

Third tier

(i)

In general

Notwithstanding subparagraphs (A) and (B), the amount of penalty for each such violation shall not exceed the amount specified in clause (ii) if—

(I)

the violation described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and

(II)

such violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons.

(ii)

Maximum amount of penalty

The amount referred to in clause (i) is the greatest of—

(I)

$300,000 for a natural person or $1,450,000 for any other person;

(II)

3 times the gross amount of pecuniary gain to such defendant as a result of the violation; or

(III)

the amount of losses incurred by victims as a result of the violation.

.

(b)

Penalties for recidivists

(1)

Securities Act of 1933

(A)

Money penalties in administrative actions

Section 8A(g)(2) of the Securities Act of 1933 (15 U.S.C. 77h–1(g)(2)) is amended by adding at the end the following:

(D)

Fourth tier

Notwithstanding subparagraphs (A), (B), and (C), the maximum amount of penalty for each such act or omission shall be 3 times the otherwise applicable amount in such subparagraphs if, within the 5-year period preceding such act or omission, the person who committed the act or omission was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that person.

.

(B)

Money penalties in civil actions

Section 20(d)(2) of the Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is amended by adding at the end the following:

(D)

Fourth tier

Notwithstanding subparagraphs (A), (B), and (C), the maximum amount of penalty for each such violation shall be 3 times the otherwise applicable amount in such subparagraphs if, within the 5-year period preceding such violation, the defendant was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that defendant.

.

(2)

Securities Exchange Act of 1934

(A)

Money penalties in civil actions

Section 21(d)(3)(B) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended by adding at the end the following:

(iv)

Fourth tier

Notwithstanding clauses (i), (ii), and (iii), the maximum amount of penalty for each such violation shall be 3 times the otherwise applicable amount in such clauses if, within the 5-year period preceding such violation, the defendant was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that defendant.

.

(B)

Money penalties in administrative actions

Section 21B(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78u–2(b)) is amended by adding at the end the following:

(4)

Fourth tier

Notwithstanding paragraphs (1), (2), and (3), the maximum amount of penalty for each such act or omission shall be 3 times the otherwise applicable amount in such paragraphs if, within the 5-year period preceding such act or omission, the person who committed the act or omission was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that person.

.

(3)

Investment Company Act of 1940

(A)

Money penalties in administrative actions

Section 9(d)(2) of the Investment Company Act of 1940 (15 U.S.C. 80a–9(d)(2)) is amended by adding at the end the following:

(D)

Fourth tier

Notwithstanding subparagraphs (A), (B), and (C), the maximum amount of penalty for each such act or omission shall be 3 times the otherwise applicable amount in such subparagraphs if, within the 5-year period preceding such act or omission, the person who committed the act or omission was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that person.

.

(B)

Money penalties in civil actions

Section 42(e)(2) of the Investment Company Act of 1940 (15 U.S.C. 80a–41(e)(2)) is amended by adding at the end the following:

(D)

Fourth tier

Notwithstanding subparagraphs (A), (B), and (C), the maximum amount of penalty for each such violation shall be 3 times the otherwise applicable amount in such subparagraphs if, within the 5-year period preceding such violation, the defendant was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that defendant.

.

(4)

Investment Advisers Act of 1940

(A)

Money penalties in administrative actions

Section 203(i)(2) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3(i)(2)) is amended by adding at the end the following:

(D)

Fourth tier

Notwithstanding subparagraphs (A), (B), and (C), the maximum amount of penalty for each such act or omission shall be 3 times the otherwise applicable amount in such subparagraphs if, within the 5-year period preceding such act or omission, the person who committed the act or omission was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that person.

.

(B)

Money penalties in civil actions

Section 209(e)(2) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–9(e)(2)) is amended by adding at the end the following:

(D)

Fourth tier

Notwithstanding subparagraphs (A), (B), and (C), the maximum amount of penalty for each such violation shall be 3 times the otherwise applicable amount in such subparagraphs if, within the 5-year period preceding such violation, the defendant was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any Commission action alleging fraud by that defendant.

.

(c)

Violations of injunctions and bars

(1)

Securities Act of 1933

Section 20(d) of the Securities Act of 1933 (15 U.S.C. 77t(d)) is amended—

(A)

in paragraph (1), by inserting after the rules or regulations thereunder, the following: a Federal court injunction or a bar obtained or entered by the Commission under this title,; and

(B)

by striking paragraph (4) and inserting the following:

(4)

Special provisions relating to a violation of an injunction or certain orders

(A)

In general

Each separate violation of an injunction or order described in subparagraph (B) shall be a separate offense, except that in the case of a violation through a continuing failure to comply with such injunction or order, each day of the failure to comply with the injunction or order shall be deemed a separate offense.

(B)

Injunctions and orders

Subparagraph (A) shall apply with respect to any action to enforce—

(i)

a Federal court injunction obtained pursuant to this title;

(ii)

an order entered or obtained by the Commission pursuant to this title that bars, suspends, places limitations on the activities or functions of, or prohibits the activities of, a person; or

(iii)

a cease-and-desist order entered by the Commission pursuant to section 8A.

.

(2)

Securities Exchange Act of 1934

Section 21(d)(3) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(d)(3)) is amended—

(A)

in subparagraph (A), by inserting after the rules or regulations thereunder, the following: a Federal court injunction or a bar obtained or entered by the Commission under this title,; and

(B)

by striking subparagraph (D) and inserting the following:

(D)

Special provisions relating to a violation of an injunction or certain orders

(i)

In general

Each separate violation of an injunction or order described in clause (ii) shall be a separate offense, except that in the case of a violation through a continuing failure to comply with such injunction or order, each day of the failure to comply with the injunction or order shall be deemed a separate offense.

(ii)

Injunctions and orders

Clause (i) shall apply with respect to an action to enforce—

(I)

a Federal court injunction obtained pursuant to this title;

(II)

an order entered or obtained by the Commission pursuant to this title that bars, suspends, places limitations on the activities or functions of, or prohibits the activities of, a person; or

(III)

a cease-and-desist order entered by the Commission pursuant to section 21C.

.

(3)

Investment Company Act of 1940

Section 42(e) of the Investment Company Act of 1940 (15 U.S.C. 80a–41(e)) is amended—

(A)

in paragraph (1), by inserting after the rules or regulations thereunder, the following: a Federal court injunction or a bar obtained or entered by the Commission under this title,; and

(B)

by striking paragraph (4) and inserting the following:

(4)

Special provisions relating to a violation of an injunction or certain orders

(A)

In general

Each separate violation of an injunction or order described in subparagraph (B) shall be a separate offense, except that in the case of a violation through a continuing failure to comply with such injunction or order, each day of the failure to comply with the injunction or order shall be deemed a separate offense.

(B)

Injunctions and orders

Subparagraph (A) shall apply with respect to any action to enforce—

(i)

a Federal court injunction obtained pursuant to this title;

(ii)

an order entered or obtained by the Commission pursuant to this title that bars, suspends, places limitations on the activities or functions of, or prohibits the activities of, a person; or

(iii)

a cease-and-desist order entered by the Commission pursuant to section 9(f).

.

(4)

Investment Advisers Act of 1940

Section 209(e) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–9(e)) is amended—

(A)

in paragraph (1), by inserting after the rules or regulations thereunder, the following: a Federal court injunction or a bar obtained or entered by the Commission under this title,; and

(B)

by striking paragraph (4) and inserting the following:

(4)

Special provisions relating to a violation of an injunction or certain orders

(A)

In general

Each separate violation of an injunction or order described in subparagraph (B) shall be a separate offense, except that in the case of a violation through a continuing failure to comply with such injunction or order, each day of the failure to comply with the injunction or order shall be deemed a separate offense.

(B)

Injunctions and orders

Subparagraph (A) shall apply with respect to any action to enforce—

(i)

a Federal court injunction obtained pursuant to this title;

(ii)

an order entered or obtained by the Commission pursuant to this title that bars, suspends, places limitations on the activities or functions of, or prohibits the activities of, a person; or

(iii)

a cease-and-desist order entered by the Commission pursuant to section 203(k).

.

(d)

Effective date

The amendments made by this section shall apply with respect to conduct that occurs after the date of the enactment of this Act.

212.

Updated civil money penalties of Public Company Accounting Oversight Board

(a)

In general

Section 105(c)(4)(D) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(c)(4)(D)) is amended—

(1)

in clause (i)—

(A)

by striking $100,000 and inserting $200,000; and

(B)

by striking $2,000,000 and inserting $4,000,000; and

(2)

in clause (ii)—

(A)

by striking $750,000 and inserting $1,500,000; and

(B)

by striking $15,000,000 and inserting $22,000,000.

(b)

Effective date

The amendments made by this section shall apply with respect to conduct that occurs after the date of the enactment of this Act.

213.

Updated civil money penalty for controlling persons in connection with insider trading

(a)

In general

Section 21A(a)(3) of the Securities Exchange Act of 1934 (15 U.S.C. 78u–1(a)(3)) is amended by striking $1,000,000 and inserting $2,500,000.

(b)

Effective date

The amendment made by this section shall apply with respect to conduct that occurs after the date of the enactment of this Act.

214.

Update of certain other penalties

(a)

In general

Section 32 of the Securities Exchange Act of 1934 (15 U.S.C. 78ff) is amended—

(1)

in subsection (a), by striking $5,000,000 and inserting $7,000,000; and

(2)

in subsection (c)—

(A)

in paragraph (1)—

(i)

in subparagraph (A), by striking $2,000,000 and inserting $4,000,000; and

(ii)

in subparagraph (B), by striking $10,000 and inserting $50,000; and

(B)

in paragraph (2)—

(i)

in subparagraph (A), by striking $100,000 and inserting $250,000; and

(ii)

in subparagraph (B), by striking $10,000 and inserting $50,000.

(b)

Effective date

The amendments made by this section shall apply with respect to conduct that occurs after the date of the enactment of this Act.

215.

Monetary sanctions to be used for the relief of victims

(a)

In general

Section 308(a) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(a)) is amended to read as follows:

(a)

Monetary sanctions to be used for the relief of victims

(1)

In general

If, in any judicial or administrative action brought by the Commission under the securities laws, the Commission obtains a monetary sanction (as defined in section 21F(a) of the Securities Exchange Act of 1934) against any person for a violation of such laws, or such person agrees, in settlement of any such action, to such monetary sanction, the amount of such monetary sanction shall, on the motion or at the direction of the Commission, be added to and become part of a disgorgement fund or other fund established for the benefit of the victims of such violation.

(2)

Definition of victim

In this subsection, the term victim has the meaning given the term crime victim in section 3771(e) of title 18, United States Code.

.

(b)

Monetary sanction defined

Section 21F(a)(4)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78u–6(a)(4)(A)) is amended by striking ordered and inserting required.

(c)

Effective date

The amendments made by this section apply with respect to any monetary sanction ordered or required to be paid before or after the date of enactment of this Act.

216.

GAO report on use of civil money penalty authority by Commission

(a)

In general

Not later than 2 years after the date of the enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a report on the use by the Commission of the authority to impose or obtain civil money penalties for violations of the securities laws during the period beginning on June 1, 2010, and ending on the date of the enactment of this Act.

(b)

Matters required To be included

The matters covered by the report required by subsection (a) shall include the following:

(1)

The types of violations for which civil money penalties were imposed or obtained.

(2)

The types of persons on whom civil money penalties were imposed or from whom such penalties were obtained.

(3)

The number and dollar amount of civil money penalties imposed or obtained, disaggregated as follows:

(A)

Penalties imposed in administrative actions and penalties obtained in judicial actions.

(B)

Penalties imposed on or obtained from issuers (individual and aggregate filers) and penalties imposed on or obtained from other persons.

(C)

Penalties permitted to be retained for use by the Commission and penalties deposited in the general fund of the Treasury of the United States.

(4)

For penalties imposed on or obtained from issuers:

(A)

Whether the violations involved resulted in direct economic benefit to the issuers.

(B)

The impact of the penalties on the shareholders of the issuers.

(c)

Definitions

In this section, the terms Commission, issuer, and securities laws have the meanings given such terms in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).

B

FIRREA Penalties Modernization

221.

Increase of civil and criminal penalties originally established in the Financial Institutions Reform, Recovery, and Enforcement Act of 1989

(a)

Amendments to FIRREA

Section 951(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833a(b)) is amended—

(1)

in paragraph (1), by striking $1,000,000 and inserting $1,500,000; and

(2)

in paragraph (2), by striking $1,000,000 per day or $5,000,000 and inserting $1,500,000 per day or $7,500,000.

(b)

Amendments to the Home Owners’ Loan Act

The Home Owners’ Loan Act (12 U.S.C. 1461 et seq.) is amended—

(1)

in section 5(v)(6), by striking $1,000,000 and inserting $1,500,000; and

(2)

in section 10—

(A)

in subsection (r)(3), by striking $1,000,000 and inserting $1,500,000; and

(B)

in subsection (i)(1)(B), by striking $1,000,000 and inserting $1,500,000.

(c)

Amendments to the Federal Deposit Insurance Act

The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended—

(1)

in section 7—

(A)

in subsection (a)(1), by striking $1,000,000 and inserting $1,500,000; and

(B)

in subsection (j)(16)(D), by striking $1,000,000 each place such term appears and inserting $1,500,000;

(2)

in section 8—

(A)

in subsection (i)(2)(D), by striking $1,000,000 each place such term appears and inserting $1,500,000; and

(B)

in subsection (j), by striking $1,000,000 and inserting $1,500,000; and

(3)

in section 19(b), by striking $1,000,000 and inserting $1,500,000.

(d)

Amendments to the Federal Credit Union Act

The Federal Credit Union Act (12 U.S.C. 1751 et seq.) is amended—

(1)

in section 202(a)(3), by striking $1,000,000 and inserting $1,500,000;

(2)

in section 205(d)(3), by striking $1,000,000 and inserting $1,500,000; and

(3)

in section 206—

(A)

in subsection (k)(2)(D), by striking $1,000,000 each place such term appears and inserting $1,500,000; and

(B)

in subsection (l), by striking $1,000,000 and inserting $1,500,000.

(e)

Amendments to the Revised Statutes of the United States

Title LXII of the Revised Statutes of the United States is amended—

(1)

in section 5213(c), by striking $1,000,000 and inserting $1,500,000; and

(2)

in section 5239(b)(4), by striking $1,000,000 each place such term appears and inserting $1,500,000.

(f)

Amendments to the Federal Reserve Act

The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended—

(1)

in the 6th undesignated paragraph of section 9, by striking $1,000,000 and inserting $1,500,000;

(2)

in section 19(l)(4), by striking $1,000,000 each place such term appears and inserting $1,500,000; and

(3)

in section 29(d), by striking $1,000,000 each place such term appears and inserting $1,500,000.

(g)

Amendments to the Bank Holding Company Act Amendments of 1970

Section 106(b)(2)(F)(iv) of the Bank Holding Company Act Amendments of 1970 (12 U.S.C. 1978(b)(2)(F)(iv)) is amended by striking $1,000,000 each place such term appears and inserting $1,500,000.

(h)

Amendments to the Bank Holding Company Act of 1956

Section 8 of the Bank Holding Company Act of 1956 (12 U.S.C. 1847) is amended—

(1)

in subsection (a)(2), by striking $1,000,000 and inserting $1,500,000; and

(2)

in subsection (d)(3), by striking $1,000,000 and inserting $1,500,000.

(i)

Amendments to title 18, United States Code

Title 18, United States Code, is amended—

(1)

in section 215(a) of chapter 11, by striking $1,000,000 and inserting $1,500,000;

(2)

in chapter 31—

(A)

in section 656, by striking $1,000,000 and inserting $1,500,000; and

(B)

in section 657, by striking $1,000,000 and inserting $1,500,000;

(3)

in chapter 47—

(A)

in section 1005, by striking $1,000,000 and inserting $1,500,000;

(B)

in section 1006, by striking $1,000,000 and inserting $1,500,000;

(C)

in section 1007, by striking $1,000,000 and inserting $1,500,000; and

(D)

in section 1014, by striking $1,000,000 and inserting $1,500,000; and

(4)

in chapter 63—

(A)

in section 1341, by striking $1,000,000 and inserting $1,500,000;

(B)

in section 1343, by striking $1,000,000 and inserting $1,500,000; and

(C)

in section 1344, by striking $1,000,000 and inserting $1,500,000.

III

Demanding Accountability from Financial Regulators and Devolving Power Away from Washington

A

Cost-Benefit Analyses

311.

Definitions

As used in this subtitle—

(1)

the term agency means the Board of Governors of the Federal Reserve System, the Consumer Law Enforcement Agency, 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;

(2)

the term chief economist means—

(A)

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;

(B)

with respect to the Consumer Law Enforcement Agency, the Head of the Office of Economic Analysis, or an employee of the agency with comparable authority;

(C)

with respect to the Commodity Futures Trading Commission, the Chief Economist, or an employee of the agency with comparable authority;

(D)

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;

(E)

with respect to the Federal Housing Finance Agency, the Chief Economist, or an employee of the agency with comparable authority;

(F)

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;

(G)

with respect to the National Credit Union Administration, the Chief Economist, or an employee of the agency with comparable authority; and

(H)

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;

(3)

the term Council means the Chief Economists Council established under section 318; and

(4)

the term regulation

(A)

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

(B)

does not include—

(i)

a regulation issued in accordance with the formal rulemaking provisions of section 556 or 557 of title 5, United States Code;

(ii)

a regulation that is limited to agency organization, management, or personnel matters;

(iii)

a regulation promulgated pursuant to statutory authority that expressly prohibits compliance with this provision;

(iv)

a regulation that is certified by the agency to be an emergency action, if such certification is published in the Federal Register;

(v)

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;

(vi)

a regulation filed with the Securities and Exchange Commission by the Public Company Accounting Oversight Board, the Municipal Securities Rulemaking Board, or any national securities association registered under section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o–3(a)) for which the board or association has itself conducted the cost-benefit analysis and otherwise complied with the requirements of section 312; or

(vii)

a regulation filed with the Securities and Exchange Commission by a national securities association registered under section 15A(k) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–3(k)).

312.

Required regulatory analysis

(a)

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—

(1)

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;

(2)

an explanation of why the private market or State, local, or tribal authorities cannot adequately address the identified market failure or other problem;

(3)

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;

(4)

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—

(A)

compliance costs;

(B)

effects on economic activity, net job creation (excluding jobs related to ensuring compliance with the regulation), efficiency, competition, and capital formation;

(C)

regulatory administrative costs; and

(D)

costs imposed by the regulation on State, local, or tribal governments or other regulatory authorities;

(5)

if quantified benefits do not outweigh quantitative costs, a justification for the regulation;

(6)

an identification and assessment of all available alternatives to the regulation, including modification of an existing regulation or statute, together with—

(A)

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

(B)

if the regulation is not a pilot program, an explanation of why a pilot program is not appropriate;

(7)

if the regulation specifies the behavior or manner of compliance, an explanation of why the agency did not instead specify performance objectives;

(8)

an assessment of how the burden imposed by the regulation will be distributed among market participants, including whether consumers, investors, small businesses, or independent financial firms and advisors will be disproportionately burdened;

(9)

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;

(10)

a description of any studies, surveys, or other data relied upon in preparing the analysis;

(11)

an assessment of the degree to which the key assumptions underlying the analysis are subject to uncertainty; and

(12)

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.

(b)

Requirements for notices of final rulemaking

(1)

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—

(A)

has issued a notice of proposed rulemaking for the relevant regulation;

(B)

has conducted and includes in the notice of final rulemaking an analysis that contains, at a minimum, the elements required under subsection (a); and

(C)

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 315.

(2)

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.

(3)

Comment period

An agency shall not publish a notice of final rulemaking with respect to a regulation, unless the agency—

(A)

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

(B)

includes in the notice of final rulemaking an explanation of why the agency was not able to provide a 90-day comment period.

(4)

Prohibited Rules

(A)

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).

(B)

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.

(C)

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—

(i)

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 312(b)(4)(A) of the Financial CHOICE Act of 2017, 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

(ii)

submission or publication date means—

(I)

the date on which the analysis under paragraph (1)(B) is submitted to Congress under paragraph (4)(B); or

(II)

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.

313.

Rule of construction

Provided that an agency has first issued an advanced notice of proposed rulemaking in connection with a regulation, the agency is not required to comply with section 3506(c)(2) of title 44, United States Code, with respect to any information collection request—

(1)

that identifies the advanced notice of proposed rulemaking in such request;

(2)

that informs the person from whom the information is obtained or solicited that the provision of such information is voluntary;

(3)

that is necessary to comply with section 312; and

(4)

with respect to which the information collected will not be used for purposes other than compliance with this title.

314.

Public availability of data and regulatory analysis

(a)

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 312 so that the analytical results of the agency are capable of being substantially reproduced, subject to an acceptable degree of imprecision or error.

(b)

Confidentiality

The agency shall comply with subsection (a) in a manner that preserves the nonpublic nature of confidential information, including confidential trade secrets, confidential commercial or financial information, and confidential information about positions, transactions, or business practices.

315.

Five-year regulatory impact analysis

(a)

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.

(b)

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 312(b)(1)(C).

(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.

(d)

Confidentiality

The agency shall comply with subsection (c) in a manner that preserves the nonpublic nature of confidential information, including confidential trade secrets, confidential commercial or financial information, and confidential information about positions, transactions, or business practices.

(e)

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. Notwithstanding the previous sentence, the Commodity Futures Trading Commission shall only submit its report to the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee on Agriculture of the House of Representatives.

316.

Retrospective review of existing rules

(a)

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. Notwithstanding the previous sentence, the Commodity Futures Trading Commission shall only submit its plan to the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee on Agriculture of the House of Representatives.

(b)

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. Notwithstanding the previous sentence, the Commodity Futures Trading Commission shall only submit its plan to the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee on Agriculture of the House of Representatives.

317.

Judicial review

(a)

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 312.

(b)

Stay

The court may stay the effective date of the regulation or any provision thereof.

(c)

Relief

If the court finds that an agency has not complied with the requirements of section 312, 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.

318.

Chief Economists Council

(a)

Establishment

There is established the Chief Economists Council.

(b)

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.

(c)

Meetings

The Council shall meet at the call of the Chairperson, but not less frequently than quarterly.

(d)

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, and make publicly available on the Council’s website, a report on—

(1)

the benefits and costs of regulations adopted by the agencies during the past 12 months;

(2)

the regulatory actions planned by the agencies for the upcoming 12 months;

(3)

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);

(4)

the training and qualifications of the persons who prepared the cost-benefit analyses of each agency during the past 12 months;

(5)

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

(6)

recommendations for legislative or regulatory action to enhance the efficiency and effectiveness of financial regulation in the United States.

319.

Conforming amendments

Section 15(a) of the Commodity Exchange Act (7 U.S.C. 19(a)) is amended—

(1)

by striking paragraph (1);

(2)

in paragraph (2), by striking (2) and all that follows through light of— and inserting the following:

(1)

Considerations

Before promulgating a regulation under this chapter or issuing an order (except as provided in paragraph (2)), the Commission shall take into consideration—

;

(3)

in paragraph (1), as so redesignated—

(A)

in subparagraph (B), by striking futures and inserting the relevant;

(B)

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

(C)

in subparagraph (D), by striking ; and and inserting a period; and

(D)

by striking subparagraph (E); and

(4)

by redesignating paragraph (3) as paragraph (2).

320.

Other regulatory entities

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, and make publicly available on the Commission’s website 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)), other than subsection (k) of such section 15A, to the requirements of this subtitle, other than direct representation on the Council.

321.

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.

B

Congressional Review of Federal Financial Agency Rulemaking

331.

Congressional review

(a)
(1)
(A)

Before a rule may take effect, an 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—

(i)

a copy of the rule;

(ii)

a concise general statement relating to the rule;

(iii)

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 334(2);

(iv)

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

(v)

the proposed effective date of the rule.

(B)

On the date of the submission of the report under subparagraph (A), the agency shall submit to the Comptroller General and make available to each House of Congress—

(i)

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;

(ii)

the agency’s actions pursuant to sections 603, 604, 605, 607, and 609 of title 5, United States Code;

(iii)

the agency’s actions pursuant to sections 202, 203, 204, and 205 of the Unfunded Mandates Reform Act of 1995 and subtitle G; and

(iv)

any other relevant information or requirements under any other Act and any relevant Executive orders.

(C)

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.

(2)
(A)

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 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.

(B)

Agencies shall cooperate with the Comptroller General by providing information relevant to the Comptroller General’s report under subparagraph (A).

(3)

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 332 or as provided for in the rule following enactment of a joint resolution of approval described in section 332, whichever is later.

(4)

A nonmajor rule shall take effect as provided by section 333 after submission to Congress under paragraph (1).

(5)

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.

(b)
(1)

A major rule shall not take effect unless the Congress enacts a joint resolution of approval described under section 332.

(2)

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.

(c)
(1)

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.

(2)

Paragraph (1) applies to a determination made by the President by Executive order that the major rule should take effect because such rule is—

(A)

necessary because of an imminent threat to health or safety or other emergency;

(B)

necessary for the enforcement of criminal laws;

(C)

necessary for national security; or

(D)

issued pursuant to any statute implementing an international trade agreement.

(3)

An exercise by the President of the authority under this subsection shall have no effect on the procedures under section 332.

(d)
(1)

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—

(A)

in the case of the Senate, 60 session days; or

(B)

in the case of the House of Representatives, 60 legislative days,

before the date the Congress is scheduled to adjourn a session of Congress through the date on which the same or succeeding Congress first convenes its next session, sections 332 and 333 shall apply to such rule in the succeeding session of Congress.
(2)
(A)

In applying sections 332 and 333 for purposes of such additional review, a rule described under paragraph (1) shall be treated as though—

(i)

such rule were published in the Federal Register on—

(I)

in the case of the Senate, the 15th session day; or

(II)

in the case of the House of Representatives, the 15th legislative day,

after the succeeding session of Congress first convenes; and
(ii)

a report on such rule were submitted to Congress under subsection (a)(1) on such date.

(B)

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.

(3)

A rule described under paragraph (1) shall take effect as otherwise provided by law (including other subsections of this section).

332.

Congressional approval procedure for major rules

(a)
(1)

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 331(a)(1)(A)(iii) that—

(A)

bears no preamble;

(B)

bears the following title (with blanks filled as appropriate): Approving the rule submitted by ___ relating to ___.;

(C)

includes after its resolving clause only the following (with blanks filled as appropriate): That Congress approves the rule submitted by ___ relating to ___.; and

(D)

is introduced pursuant to paragraph (2).

(2)

After a House of Congress receives a report classifying a rule as major pursuant to section 331(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)—

(A)

in the case of the House of Representatives, within 3 legislative days; and

(B)

in the case of the Senate, within 3 session days.

(3)

A joint resolution described in paragraph (1) shall not be subject to amendment at any stage of proceeding.

(b)

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.

(c)

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.

(d)
(1)

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.

(2)

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.

(3)

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.

(4)

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.

(e)

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.

(f)
(1)

If, before passing a joint resolution described in subsection (a), one House receives from the other a joint resolution having the same text, then—

(A)

the joint resolution of the other House shall not be referred to a committee; and

(B)

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.

(2)

This subsection shall not apply to the House of Representatives if the joint resolution received from the Senate is a revenue measure.

(g)

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 331(b)(2), then such vote shall be taken on that day.

(h)

This section and section 333 are enacted by Congress—

(1)

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

(2)

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.

333.

Congressional disapproval procedure for nonmajor rules

(a)

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 331(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).

(b)

A joint resolution described in subsection (a) shall be referred to the committees in each House of Congress with jurisdiction.

(c)

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.

(d)
(1)

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.

(2)

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.

(3)

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.

(4)

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.

(e)

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—

(1)

after the expiration of the 60 session days beginning with the applicable submission or publication date; or

(2)

if the report under section 331(a)(1)(A) was submitted during the period referred to in section 331(d)(1), after the expiration of the 60 session days beginning on the 15th session day after the succeeding session of Congress first convenes.

(f)

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:

(1)

The joint resolution of the other House shall not be referred to a committee.

(2)

With respect to a joint resolution described in subsection (a) of the House receiving the joint resolution—

(A)

the procedure in that House shall be the same as if no joint resolution had been received from the other House; but

(B)

the vote on final passage shall be on the joint resolution of the other House.

334.

Definitions

For purposes of this subtitle:

(1)

The term agency has the meaning given such term under section 311.

(2)

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—

(A)

an annual cost on the economy of $100,000,000 or more, adjusted annually for inflation;

(B)

a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or

(C)

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.

(3)

The term nonmajor rule means any rule that is not a major rule.

(4)

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—

(A)

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;

(B)

any rule relating to agency management or personnel; or

(C)

any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties.

(5)

The term submission date or publication date, except as otherwise provided in this subtitle, means—

(A)

in the case of a major rule, the date on which the Congress receives the report submitted under section 331(a)(1)(A); and

(B)

in the case of a nonmajor rule, the later of—

(i)

the date on which the Congress receives the report submitted under section 331(a)(1)(A); and

(ii)

the date on which the nonmajor rule is published in the Federal Register, if so published.

335.

Judicial review

(a)

No determination, finding, action, or omission under this subtitle shall be subject to judicial review.

(b)

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.

(c)

The enactment of a joint resolution of approval under section 332 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.

336.

Effective date of certain rules

Notwithstanding section 331—

(1)

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

(2)

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,

shall take effect at such time as the Federal financial agency promulgating the rule determines.
337.

Budgetary effects of rules subject to section 332 of the Financial CHOICE Act of 2017

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:

(E)

Budgetary effects of rules subject to section 332 of the Financial CHOICE Act of 2017

Any rules subject to the congressional approval procedure set forth in section 332 of the Financial CHOICE Act of 2017 affecting budget authority, outlays, or receipts shall be assumed to be effective unless it is not approved in accordance with such section.

.

338.

Nonapplicability to monetary policy

Nothing in this subtitle shall apply to rules that concern monetary policy proposed or implemented by the Board of Governors of the Federal Reserve System or the Federal Open Market Committee.

C

Judicial Review of Agency Actions

341.

Scope of judicial review of agency actions

(a)

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. If the reviewing court determines that a statutory or regulatory provision relevant to its decision contains a gap or ambiguity, the court shall not interpret that gap or ambiguity as an implicit delegation to the agency of legislative rule making authority and shall not rely on such gap or ambiguity as a justification either for interpreting agency authority expansively or for deferring to the agency's interpretation on the question of law. 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.

(b)

Agency defined

For purposes of this section, the term agency has the meaning given such term under section 311.

(c)

Effective date

Subsection (a) shall take effect after the end of the 2-year period beginning on the date of the enactment of this Act.

D

Leadership of Financial Regulators

351.

Federal Deposit Insurance Corporation

Section 2 of the Federal Deposit Insurance Act (12 U.S.C. 1812) is amended—

(1)

in subsection (a)(1), by striking 5 members and all that follows through 3 of whom and inserting the following: 5 members, who;

(2)

by amending subsection (d) to read as follows:

(d)

Vacancy

Any vacancy on the Board of Directors shall be filled in the manner in which the original appointment was made.

; and

(3)

in subsection (f)—

(A)

by striking paragraph (2); and

(B)

by redesignating paragraph (3) as paragraph (2).

352.

Federal Housing Finance Agency

Section 1312(b)(2) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4512) is amended by striking for cause.

E

Congressional Oversight of Appropriations

361.

Bringing the Federal Deposit Insurance Corporation into the appropriations process

(a)

In general

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

(1)

by striking (a) The and inserting the following:

(a)

Powers

(1)

In general

The

;

(2)

by inserting , subject to paragraph (2), after The Board of Directors of the Corporation; and

(3)

by adding at the end the following new paragraph:

(2)

Appropriations requirement

Except as provided under paragraph (3), the Corporation may, only to the extent as provided in advance by appropriations Acts, cover the costs incurred in carrying out the provisions of this Act, including with respect to the administrative costs of the Corporation and the costs of the examination and supervision of insured depository institutions.

(3)

Exception for certain programs

Paragraph (2) shall not apply to the Corporation’s Insurance Business Line Programs and Receivership Management Business Line Programs, as in existence on the date of enactment of this paragraph, and the proportion of the administrative costs of the Corporation related to such programs.

.

(b)

Examination fees

Section 10(e)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1820(e)(1)) is amended by striking to meet the expenses of the Corporation in carrying out such examinations and inserting and may be expended by the Board only to the extent as provided in advance by appropriations Acts to cover the costs incurred in carrying out such examinations.

(c)

Offset of additional fees

The Federal Deposit Insurance Corporation shall reduce the amount of insurance premiums charged by the Corporation under the Federal Deposit Insurance Act in an amount equal to any additional fees charged by the Corporation by reason of the amendments made by this section.

(d)

Effective date

The amendments made by this section shall apply with respect to expenses paid and fees collected on or after October 1, 2017.

362.

Bringing the Federal Housing Finance Agency into the appropriations process

(a)

In general

Section 1316 of the Housing and Community Development Act of 1992 (12 U.S.C. 4516) is amended—

(1)

by amending subsection (a) to read as follows:

(a)

Appropriations requirement

(1)

Recovery of costs of annual appropriation

The Agency shall collect assessments and other fees that are designed to recover the costs to the Government of the annual appropriation to the Agency by Congress.

(2)

Offsetting collections

Assessments and other fees described under paragraph (1) for any fiscal year—

(A)

shall be deposited and credited as offsetting collections to the account providing appropriations to the Agency; and

(B)

shall not be collected for any fiscal year except to the extent provided in advance in appropriation Acts.

; and

(2)

by striking subsection (f).

(b)

Effective date

The amendments made by this section shall apply with respect to expenses paid and assessments and other fees collected on or after October 1, 2017.

363.

Bringing the examination and supervision functions of the National Credit Union Administration into the appropriations process

(a)

Operating fees

Section 105(d) of the Federal Credit Union Act (12 U.S.C. 1755(d)) is amended—

(1)

by striking All and inserting (1) All;

(2)

by striking for the account of the Administration and may be expended by the Board to defray the expenses incurred in carrying out the provisions of this Act including the examination and supervision of Federal credit unions and inserting and may be expended by the Board only to the extent as provided in advance by appropriations Acts, to cover the costs incurred in carrying out the provisions of this Act with respect to the costs of the examination and supervision of Federal credit unions and the proportion of the administrative costs of the Board related to the examination and supervision of Federal credit unions; and

(3)

by adding at the end the following:

(2)
(A)

The Board may only use amounts in the NCUA Operating Fund to the extent as provided in advance by appropriations Acts, including to pay for the costs incurred by the Board in carrying out the examination and supervision of Federal credit unions and the proportion of the administrative costs of the Board related to the examination and supervision of Federal credit unions.

(B)

Subparagraph (A) shall not apply to the Board’s activities carried out pursuant to title II.

.

(b)

Staff funding

Section 120(j)(3) of the Federal Credit Union Act (12 U.S.C. 1766(j)(3)) is amended—

(1)

by inserting related to the examination and supervision of Federal credit unions under this Act and the proportion of the administrative costs of the Board related to the examination and supervision of Federal credit unions under this Act before shall be paid; and

(2)

by striking insured credit unions under this Act and inserting Federal credit unions under this title, only to the extent as provided in advance by appropriations Acts.

(c)

Use of deposit funds

Section 202(c)(1)(B)(iv) of the Federal Credit Union Act (12 U.S.C. 1782(c)(1)(B)(iv)) is amended—

(1)

by striking The and inserting To the extent provided for in advance by appropriations Acts, the; and

(2)

by adding at the end the following new sentence: This clause shall not apply to the Board’s activities carried out pursuant to this title..

(d)

Effective date

The amendments made by this section shall apply with respect to expenses paid and fees collected on or after October 1, 2017.

364.

Bringing the Office of the Comptroller of the Currency into the appropriations process

(a)

In general

Section 5240A of the Revised Statutes of the United States (12 U.S.C. 16) is amended—

(1)

by striking Sec. 5240A. The Comptroller of the Currency may collect an assessment, fee, or other charge from any entity described in section 3(q)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)(1)), as the Comptroller determines is necessary or appropriate to carry out the responsibilities of the Office of the Comptroller of the Currency. In establishing the amount of an assessment, fee, or charge collected from an entity under this section, and inserting the following:

5240A.

Collection of fees; appropriations requirement

(a)

In general

In establishing the amount of an assessment, fee, or charge collected from an entity under subsection (b),

;

(2)

by striking Funds derived and all that follows through the end of the section; and

(3)

by adding at the end the following:

(b)

Appropriations requirement

(1)

Recovery of costs of annual appropriation

The Comptroller of the Currency shall impose and collect assessments, fees, or other charges that are designed to recover the costs to the Government of the annual appropriation to the Office of the Comptroller of the Currency by Congress.

(2)

Offsetting collections

Assessments and other fees described under paragraph (1) for any fiscal year—

(A)

shall be deposited and credited as offsetting collections to the account providing appropriations to the Office of the Comptroller of the Currency; and

(B)

shall not be collected for any fiscal year except to the extent provided in advance in appropriation Acts.

.

(b)

Conforming amendment

Section 5240 (12 U.S.C. 481 et seq.) of the Revised Statutes of the United States is amended by striking the fourth undesignated paragraph.

(c)

Effective Date

The amendments made by this section shall apply with respect to expenses paid and fees collected on or after October 1, 2017.

365.

Bringing the non-monetary policy related functions of the Board of Governors of the Federal Reserve System into the appropriations process

(a)

In general

The Federal Reserve Act is amended by inserting after section 11B the following:

11C.

Appropriations requirement for non-monetary policy related administrative costs

(a)

Appropriations requirement

(1)

Recovery of costs of annual appropriation

The Board of Governors of the Federal Reserve System and the Federal reserve banks shall collect assessments and other fees, as provided under this Act, that are designed to recover the costs to the Government of the annual appropriation to the Board of Governors of the Federal Reserve System by Congress. 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.

(2)

Offsetting collections

Assessments and other fees described under paragraph (1) for any fiscal year—

(A)

shall be deposited and credited as offsetting collections to the account providing appropriations to the Board of Governors of the Federal Reserve System; and

(B)

shall not be collected for any fiscal year except to the extent provided in advance in appropriation Acts.

(3)

Limitation

This subsection shall only apply to the non-monetary policy related administrative costs of the Board of Governors of the Federal Reserve System.

(b)

Definitions

For purposes of this section:

(1)

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.

(2)

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 includes—

(A)

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;

(B)

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

(C)

support, overhead, and pension expenses related to the items described under subparagraphs (A) and (B).

.

(b)

Effective date

The amendments made by this section shall apply with respect to expenses paid and fees collected on or after October 1, 2017.

F

International Processes

371.

Requirements for international processes

(a)

Board of Governors requirements

Section 11 of the Federal Reserve Act (12 U.S.C. 248), as amended by section 1007(a), is further amended by adding at the end the following new subsection:

(w)

International processes

(1)

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—

(A)

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;

(B)

make such notice available to the public, including on the website of the Board of Governors; and

(C)

solicit public comment, and consult with the committees described under subparagraph (A), with respect to the subject matter, scope, and goals of the process.

(2)

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 and make the report available on the website of the Board of Governors.

(3)

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—

(A)

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;

(B)

make such notice available to the public, including on the website of the Board of Governors; and

(C)

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.

(4)

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).

.

(b)

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:

51.

International processes

(a)

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—

(1)

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;

(2)

make such notice available to the public, including on the website of the Corporation; and

(3)

solicit public comment, and consult with the committees described under paragraph (1), with respect to the subject matter, scope, and goals of the process.

(b)

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 and make the report available on the website of the Corporation.

(c)

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—

(1)

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;

(2)

make such notice available to the public, including on the website of the Corporation; and

(3)

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.

(d)

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).

.

(c)

Treasury requirements

Section 325 of title 31, United States Code, is amended by adding at the end the following new subsection:

(d)

International processes

(1)

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—

(A)

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;

(B)

make such notice available to the public, including on the website of the Department of the Treasury; and

(C)

solicit public comment, and consult with the committees described under subparagraph (A), with respect to the subject matter, scope, and goals of the process.

(2)

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 and make the report available on the website of the Department of the Treasury.

(3)

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—

(A)

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;

(B)

make such notice available to the public, including on the website of the Department of the Treasury; and

(C)

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.

(4)

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).

.

(d)

OCC requirements

Chapter one of title LXII of the Revised Statutes of the United States (12 U.S.C. 21 et seq.) is amended—

(1)

by adding at the end the following new section:

5156B.

International processes

(a)

Notice of process; consultation

At least 30 calendar days before the Comptroller of the Currency participates in a process of setting financial standards as a part of any foreign or multinational entity, the Comptroller of the Currency shall—

(1)

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;

(2)

make such notice available to the public, including on the website of the Office of the Comptroller of the Currency; and

(3)

solicit public comment, and consult with the committees described under paragraph (1), with respect to the subject matter, scope, and goals of the process.

(b)

Public reports on process

After the end of any process described under subsection (a), the Comptroller of the Currency 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 Comptroller of the Currency believes should be implemented as a result of the process.

(c)

Notice of agreements; consultation

At least 90 calendar days before the Comptroller of the Currency participates in a process of setting financial standards as a part of any foreign or multinational entity, the Comptroller of the Currency shall—

(1)

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;

(2)

make such notice available to the public, including on the website of the Office of the Comptroller of the Currency; and

(3)

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.

(d)

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

(2)

in the table of contents for such chapter, by adding at the end the following new item:

5156B. International processes.

.

(e)

Securities and Exchange Commission requirements

Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d), as amended by section 818(a), is further amended by adding at the end the following new subsection:

(k)

International processes

(1)

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—

(A)

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;

(B)

make such notice available to the public, including on the website of the Commission; and

(C)

solicit public comment, and consult with the committees described under subparagraph (A), with respect to the subject matter, scope, and goals of the process.

(2)

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 and make the report available on the website of the Commission.

(3)

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—

(A)

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;

(B)

make such notice available to the public, including on the website of the Commission; and

(C)

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.

(4)

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).

.

(f)

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:

(k)

International processes

(1)

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—

(A)

issue a notice of the process, including the subject matter, scope, and goals of the process, to—

(i)

the Committee on Agriculture of the House of Representatives; and

(ii)

the Committee on Agriculture, Nutrition, and Forestry of the Senate;

(B)

make such notice available to the public, including on the website of the Commission; and

(C)

solicit public comment, and consult with the committees described under subparagraph (A), with respect to the subject matter, scope, and goals of the process.

(2)

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 and make the report available on the website of the Commission.

(3)

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—

(A)

issue a notice of agreement to—

(i)

the Committee on Agriculture of the House of Representatives; and

(ii)

the Committee on Agriculture, Nutrition, and Forestry of the Senate;

(B)

make such notice available to the public, including on the website of the Commission; and

(C)

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.

(4)

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).

.

G

Unfunded Mandates Reform

381.

Definitions

For purposes of this subtitle:

(1)

Agency

The term agency has the meaning given such term under section 311.

(2)

Direct costs

The term direct costs has the meaning given such term under section 421(3) of the Congressional Budget and Impoundment Control Act of 1974 (2 U.S.C. 658(3)), except that—

(A)

in the case of a Federal intergovernmental mandate, the term means the aggregate estimated amounts that all State, local, and Tribal governments would incur or be required to spend or would be prohibited from raising in revenues in order to comply with the Federal intergovernmental mandate; and

(B)

in the case of a Federal private sector mandate, the term means the aggregate estimated amounts that the private sector will be required to spend or could forgo in profits, including costs passed on to consumers or other entities taking into account, to the extent practicable, behavioral changes, in order to comply with the Federal private sector mandate.

(3)

Other definitions

Except as provided under paragraphs (1) and (2), the definitions under section 421 of the Congressional Budget and Impoundment Control Act of 1974 shall apply to this subtitle.

382.

Application of the Unfunded Mandates Reform Act

(a)

In general

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1501 et seq.) shall apply to the Board of Governors of the Federal Reserve System, the Consumer Law Enforcement Agency, 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.

(b)

Statements to Accompany Significant Regulatory Actions

(1)

In general

Unless otherwise expressly prohibited by law, before promulgating any general notice of proposed rulemaking or any final rule, or within six months after promulgating any final rule that was not preceded by a general notice of proposed rulemaking, if the proposed rulemaking or final rule includes a Federal mandate that may result in an annual effect on State, local, or Tribal governments, or to the private sector, in the aggregate of $100,000,000 or more in any 1 year, the agency shall prepare a written statement containing the following:

(A)

The text of the draft proposed rulemaking or final rule, together with the information required under subsections (a) and (b)(1) of section 312, as applicable, including an explanation of the manner in which the proposed rulemaking or final rule is consistent with the statutory requirement and avoids undue interference with State, local, and Tribal governments in the exercise of their governmental functions.

(B)

Estimates by the agency, if and to the extent that the agency determines that accurate estimates are reasonably feasible, of—

(i)

the future compliance costs of the Federal mandate; and

(ii)

any disproportionate budgetary effects of the Federal mandate upon any particular regions of the nation or particular State, local, or Tribal governments, urban or rural or other types of communities, or particular segments of the private sector.

(C)
(i)

A detailed description of the extent of the agency’s prior consultation with the private sector and elected representatives (under subsection (c) and section 204 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1534) of the affected State, local, and tribal governments.

(ii)

A detailed summary of the comments and concerns that were presented by the private sector and State, local, or Tribal governments either orally or in writing to the agency.

(iii)

A detailed summary of the agency’s evaluation of those comments and concerns.

(D)

A detailed summary of how the agency complied with section 312, as applicable.

(2)

Prevention of duplicative requirements

If an agency is required to prepare a written statement under both paragraph (1) and section 202(a) of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532(a)), the agency shall prepare only one written statement that consolidates and meets the requirements of such paragraph and such section.

(c)

State, local, and Tribal government and private sector input

(1)

In general

Each agency shall, to the extent permitted in law, develop an effective process to permit impacted parties within the private sector (including small businesses) to provide meaningful and timely input in the development of regulatory proposals containing significant Federal mandates.

(2)

Prevention of duplicative processes

If an agency is required to develop a process under both paragraph (1) and section 204(a) of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1534(a)), the agency shall develop only one process that consolidates and meets the requirements of such paragraph and such section.

(3)

Guidelines

For appropriate implementation of this subsection and of section 204 of the Unfunded Mandates Reform Act, consistent with applicable laws and regulations, the following guidelines shall be followed: —

(A)

Consultations shall take place as early as possible, before issuance of a notice of proposed rulemaking, continue through the final rule stage, and be integrated explicitly into the rulemaking process.

(B)

Agencies shall consult with a wide variety of State, local, and Tribal officials and impacted parties within the private sector (including small businesses). Geographic, political, and other factors that may differentiate varying points of view should be considered.

(C)

Agencies should estimate benefits and costs to assist with these consultations. The scope of the consultation should reflect the cost and significance of the Federal mandate being considered.

(D)

Agencies shall, to the extent practicable—

(i)

seek out the views of State, local, and Tribal governments, and impacted parties within the private sector (including small businesses), on costs, benefits, and risks; and

(ii)

solicit ideas about alternative methods of compliance and potential flexibilities, and input on whether the Federal regulation will harmonize with and not duplicate similar laws in other levels of government.

(E)

Consultations shall address the cumulative impact of regulations on the affected entities.

(F)

Agencies may accept electronic submissions of comments by relevant parties but may not use those comments as the sole method of satisfying the guidelines in this subsection.

(d)

Office of Information and Regulatory Affairs responsibilities

(1)

In general

The Administrator of the Office of Information and Regulatory Affairs shall provide meaningful guidance and oversight so that each agency’s regulations for which a written statement is required under subsection (b) and section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532) are consistent with the principles and requirements of this title, as well as other applicable laws, and do not conflict with the policies or actions of another Federal agency (as the term “agency” is defined under section 551 of title 5, United States Code). If the Administrator determines that an agency’s regulations for which a written statement is required under subsection (b) and section 202 of the Unfunded Mandates Reform Act of 1995 do not comply with such principles and requirements, are not consistent with other applicable laws, or conflict with the policies or actions of another Federal agency (as the term “agency” is defined under section 551 of title 5, United States Code), the Administrator shall identify areas of noncompliance, notify the agency, and request that the agency comply before the agency finalizes the regulation concerned.

(2)

Annual statements to Congress on agency compliance

The Administrator of the Office of Information and Regulatory Affairs shall submit to the Director of the Office of Management and Budget for inclusion in the annual report required by section 208 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1538) a written report detailing compliance by each agency with the requirements of this title that relate to regulations for which a written statement is required by subsection (b) and section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532), including activities undertaken at the request of the Administrator to improve compliance, during the preceding reporting period. The report shall also contain an appendix detailing compliance by each agency with subsection (c) and section 204 of the Unfunded Mandates Reform Act.

(e)

Expanded judicial review

(1)

Agency statements on significant regulatory actions

(A)

In general

Compliance or noncompliance by any agency with the provisions of subsection (b) and sections 202, 203(a)(1) and (2), and 205 of the Unfunded Mandates Reform Act of 1995 shall be subject to judicial review in accordance with this subsection.

(B)

Limited review of agency compliance or noncompliance

(i)

Scope of review under Title 5

Agency compliance or noncompliance with the provisions of subsection (b) and sections 202, 203(a)(1) and (2), and 205 of the Unfunded Mandates Reform Act of 1995 shall be subject to judicial review under section 706(1) of title 5, United States Code, and as provided under clause (ii).

(ii)

Court may compel preparation of written statement

If an agency fails to prepare the written statement (including the preparation of the estimates, analyses, statements, or descriptions) under subsection (b) and section 202 of the Unfunded Mandates Reform Act, prepare a written plan under paragraphs (1) and (2) of section 203 of the Unfunded Mandates Reform Act, or comply with section 205 of the Unfunded Mandates Reform Act, a court may compel the agency to prepare such written statement, prepare such written plan, or comply with such section.

(C)

Review of agency rules

In any judicial review under any other Federal law of an agency rule for which compliance with this subtitle is required, the inadequacy or failure to prepare required material, or to comply with provisions of subsection (b) and sections 202, 203(a)(1) and (2), and 205 of the Unfunded Mandates Reform Act of 1995 may be used as a basis for staying, enjoining, invalidating or otherwise affecting such agency rule.

(D)

Certain information as part of record

Any information generated under subsection (b) and sections 202, 203(a)(1) and (2), and 205 of the Unfunded Mandates Reform Act of 1995 that is part of the rulemaking record for judicial review under the provisions of any other Federal law may be considered as part of the record for judicial review conducted under such other provisions of Federal law.

(E)

Application of other Federal law

For any petition under subparagraph (B) the provisions of such other Federal law shall control all other matters, such as exhaustion of administrative remedies, the time for and manner of seeking review and venue, except that if such other Federal law does not provide a limitation on the time for filing a petition for judicial review that is less than 180 days, such limitation shall be 180 days after a final rule is promulgated by the appropriate agency.

(F)

Effective date

This paragraph shall apply to any agency rule for which a general notice of proposed rulemaking is promulgated on or after the date of the enactment of this Act.

(2)

Judicial review and rule of construction

Except as provided in paragraph (1)—

(A)

any estimate, analysis, statement, description, or report prepared under this subtitle, any compliance or noncompliance with the provisions of this subtitle, and any determination concerning the applicability of the provisions of this subtitle shall not be subject to judicial review; and

(B)

no provision of this subtitle shall be construed to create any right or benefit, substantive or procedural, enforceable by any person in any administrative or judicial action.

H

Enforcement Coordination

391.

Policies to minimize duplication of enforcement efforts

(a)

In general

Each agency (as defined under section 311) shall, not later than the end of the 90-day period beginning on the date of the enactment of this Act, implement policies and procedures—

(1)

to minimize duplication of efforts with other Federal or State authorities when bringing an administrative or judicial action against an individual or entity;

(2)

to establish when joint investigations, administrative actions, or judicial actions or the coordination of law enforcement activities are necessary and appropriate and in the public interest; and

(3)

to, in the course of a joint investigation, administrative action, or judicial action, establish a lead agency to avoid duplication of efforts and unnecessary burdens and to ensure consistent enforcement, as necessary and appropriate and in the public interest.

(b)

Rule of construction

Nothing in this section may be construed to preempt State law or mandate coordination by a State authority.

I

Penalties for Unauthorized Disclosures

392.

Criminal penalty for unauthorized disclosures

Section 165 of the Financial Stability Act of 2010 (12 U.S.C. 5365), as amended by section 151(b)(6)(M), is further amended by adding at the end the following:

(m)

Criminal penalty for unauthorized disclosures

(1)

In general

Any officer or employee of a Federal department or agency, who by virtue of such officer or employee’s employment or official position, has possession of, or access to, agency records which contain individually identifiable information submitted pursuant to the requirements of this section, the disclosure of which is prohibited by Federal statute, rule, or regulation, and who knowing that disclosure of the specific material is so prohibited, willfully discloses the material in any manner to any person or agency not entitled to receive it, shall be guilty of a misdemeanor and fined not more than $5,000.

(2)

Obtaining records under false pretenses

Any person who knowingly and willfully requests or obtains information described under paragraph (1) from a Federal department or agency under false pretenses shall be guilty of a misdemeanor and fined not more than $5,000.

(3)

Treatment of determinations

For purposes of this subsection, a determination made under subsection (d) or (i) based on individually identifiable information submitted pursuant to the requirements of this section shall be deemed individually identifiable information, the disclosure of which is prohibited by Federal statute.

.

J

Stop Settlement Slush Funds

393.

Limitation on donations made pursuant to settlement agreements to which certain departments or agencies are a party

(a)

Limitation on required donations

No settlement to which a department or agency is a party may direct or provide for a payment to any person who is not a victim of the alleged wrongdoing.

(b)

Penalty

Any Executive branch official or agent thereof who enters into or enforces a settlement in violation of subsection (a), shall be subject to the same penalties that would apply in the case of a violation of section 3302 of title 31, United States Code.

(c)

Effective date

Subsections (a) and (b) apply only in the case of a settlement agreement concluded on or after the date of enactment of this Act.

(d)

Definitions

(1)

The term department or agency

(A)

has the meaning given the term agency under section 311; and

(B)

means the Department of Housing and Urban Development, the Department of Justice, and the Rural Housing Service of the Department of Agriculture.

(2)

The term settlement agreement means a settlement agreement resolving a civil action or potential civil action, a plea agreement, a deferred prosecution agreement, or a non-prosecution agreement.

(3)

The term payment means a payment or loan.

(4)

The term payment to any person who is not a victim means any payment other than a payment—

(A)

to a person who is party to the lawsuit or settlement;

(B)

that provides restitution for or otherwise directly remedies actual harm (including to the environment) directly and proximately caused by the party making the payment as a result of that party’s alleged wrongdoing;

(C)

that constitutes payment for services rendered in connection with the case; or

(D)

made pursuant to section 3663 of title 18, United States Code.

IV

Unleashing Opportunities for Small Businesses, Innovators, and Job Creators by Facilitating Capital Formation

A

Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification

401.

Registration exemption for merger and acquisition brokers

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

(13)

Registration exemption for merger and acquisition brokers

(A)

In general

Except as provided in subparagraph (B), an M&A broker shall be exempt from registration under this section.

(B)

Excluded activities

An M&A broker is not exempt from registration under this paragraph if such broker does any of the following:

(i)

Directly or indirectly, in connection with the transfer of ownership of an eligible privately held company, receives, holds, transmits, or has custody of the funds or securities to be exchanged by the parties to the transaction.

(ii)

Engages on behalf of an issuer in a public offering of any class of securities that is registered, or is required to be registered, with the Commission under section 12 or with respect to which the issuer files, or is required to file, periodic information, documents, and reports under subsection (d).

(iii)

Engages on behalf of any party in a transaction involving a public shell company.

(C)

Disqualifications

An M&A broker is not exempt from registration under this paragraph if such broker is subject to—

(i)

suspension or revocation of registration under paragraph (4);

(ii)

a statutory disqualification described in section 3(a)(39);

(iii)

a disqualification under the rules adopted by the Commission under section 926 of the Investor Protection and Securities Reform Act of 2010 (15 U.S.C. 77d note); or

(iv)

a final order described in paragraph (4)(H).

(D)

Rule of construction

Nothing in this paragraph shall be construed to limit any other authority of the Commission to exempt any person, or any class of persons, from any provision of this title, or from any provision of any rule or regulation thereunder.

(E)

Definitions

In this paragraph:

(i)

Control

The term control means the power, directly or indirectly, to direct the management or policies of a company, whether through ownership of securities, by contract, or otherwise. There is a presumption of control for any person who—

(I)

is a director, general partner, member or manager of a limited liability company, or officer exercising executive responsibility (or has similar status or functions);

(II)

has the right to vote 20 percent or more of a class of voting securities or the power to sell or direct the sale of 20 percent or more of a class of voting securities; or

(III)

in the case of a partnership or limited liability company, has the right to receive upon dissolution, or has contributed, 20 percent or more of the capital.

(ii)

Eligible privately held company

The term eligible privately held company means a privately held company that meets both of the following conditions:

(I)

The company does not have any class of securities registered, or required to be registered, with the Commission under section 12 or with respect to which the company files, or is required to file, periodic information, documents, and reports under subsection (d).

(II)

In the fiscal year ending immediately before the fiscal year in which the services of the M&A broker are initially engaged with respect to the securities transaction, the company meets either or both of the following conditions (determined in accordance with the historical financial accounting records of the company):

(aa)

The earnings of the company before interest, taxes, depreciation, and amortization are less than $25,000,000.

(bb)

The gross revenues of the company are less than $250,000,000.

(iii)

M&A broker

The term M&A broker means a broker, and any person associated with a broker, engaged in the business of effecting securities transactions solely in connection with the transfer of ownership of an eligible privately held company, regardless of whether the broker acts on behalf of a seller or buyer, through the purchase, sale, exchange, issuance, repurchase, or redemption of, or a business combination involving, securities or assets of the eligible privately held company, if the broker reasonably believes that—

(I)

upon consummation of the transaction, any person acquiring securities or assets of the eligible privately held company, acting alone or in concert, will control and, directly or indirectly, will be active in the management of the eligible privately held company or the business conducted with the assets of the eligible privately held company; and

(II)

if any person is offered securities in exchange for securities or assets of the eligible privately held company, such person will, prior to becoming legally bound to consummate the transaction, receive or have reasonable access to the most recent fiscal year-end financial statements of the issuer of the securities as customarily prepared by the management of the issuer in the normal course of operations and, if the financial statements of the issuer are audited, reviewed, or compiled, any related statement by the independent accountant, a balance sheet dated not more than 120 days before the date of the offer, and information pertaining to the management, business, results of operations for the period covered by the foregoing financial statements, and material loss contingencies of the issuer.

(iv)

Public shell company

The term public shell company is a company that at the time of a transaction with an eligible privately held company—

(I)

has any class of securities registered, or required to be registered, with the Commission under section 12 or that is required to file reports pursuant to subsection (d);

(II)

has no or nominal operations; and

(III)

has—

(aa)

no or nominal assets;

(bb)

assets consisting solely of cash and cash equivalents; or

(cc)

assets consisting of any amount of cash and cash equivalents and nominal other assets.

(F)

Inflation adjustment

(i)

In general

On the date that is 5 years after the date of the enactment of this paragraph, and every 5 years thereafter, each dollar amount in subparagraph (E)(ii)(II) shall be adjusted by—

(I)

dividing the annual value of the Employment Cost Index For Wages and Salaries, Private Industry Workers (or any successor index), as published by the Bureau of Labor Statistics, for the calendar year preceding the calendar year in which the adjustment is being made by the annual value of such index (or successor) for the calendar year ending December 31, 2012; and

(II)

multiplying such dollar amount by the quotient obtained under subclause (I).

(ii)

Rounding

Each dollar amount determined under clause (i) shall be rounded to the nearest multiple of $100,000.

.

402.

Effective date

This subtitle and any amendment made by this subtitle shall take effect on the date that is 90 days after the date of the enactment of this Act.

B

Encouraging Employee Ownership

406.

Increased threshold for disclosures relating to compensatory benefit plans

Not later than 60 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise section 230.701(e) of title 17, Code of Federal Regulations, so as to increase from $5,000,000 to $20,000,000 the aggregate sales price or amount of securities sold during any consecutive 12-month period in excess of which the issuer is required under such section to deliver an additional disclosure to investors. The Commission shall index for inflation such aggregate sales price or amount every 5 years to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, rounding to the nearest $1,000,000.

C

Small Company Disclosure Simplification

411.

Exemption from XBRL requirements for emerging growth companies and other smaller companies

(a)

Exemption for emerging growth companies

Emerging growth companies are exempted from the requirements to use Extensible Business Reporting Language (XBRL) for financial statements and other periodic reporting required to be filed with the Commission under the securities laws. Such companies may elect to use XBRL for such reporting.

(b)

Exemption for other smaller companies

Issuers with total annual gross revenues of less than $250,000,000 are exempt from the requirements to use XBRL for financial statements and other periodic reporting required to be filed with the Commission under the securities laws. Such issuers may elect to use XBRL for such reporting. An exemption under this subsection shall continue in effect until—

(1)

the date that is five years after the date of enactment of this Act; or

(2)

the date that is two years after a determination by the Commission, by order after conducting the analysis required by section 3, that the benefits of such requirements to such issuers outweigh the costs, but no earlier than three years after enactment of this Act.

(c)

Modifications to regulations

Not later than 60 days after the date of enactment of this Act, the Commission shall revise its regulations under parts 229, 230, 232, 239, 240, and 249 of title 17, Code of Federal Regulations, to reflect the exemptions set forth in subsections (a) and (b).

412.

Analysis by the SEC

The Commission shall conduct an analysis of the costs and benefits to issuers described in section 411(b) of the requirements to use XBRL for financial statements and other periodic reporting required to be filed with the Commission under the securities laws. Such analysis shall include an assessment of—

(1)

how such costs and benefits may differ from the costs and benefits identified by the Commission in the order relating to interactive data to improve financial reporting (dated January 30, 2009; 74 Fed. Reg. 6776) because of the size of such issuers;

(2)

the effects on efficiency, competition, capital formation, and financing and on analyst coverage of such issuers (including any such effects resulting from use of XBRL by investors);

(3)

the costs to such issuers of—

(A)

submitting data to the Commission in XBRL;

(B)

posting data on the website of the issuer in XBRL;

(C)

software necessary to prepare, submit, or post data in XBRL; and

(D)

any additional consulting services or filing agent services;

(4)

the benefits to the Commission in terms of improved ability to monitor securities markets, assess the potential outcomes of regulatory alternatives, and enhance investor participation in corporate governance and promote capital formation; and

(5)

the effectiveness of standards in the United States for interactive filing data relative to the standards of international counterparts.

413.

Report to Congress

Not later than one year after the date of enactment of this Act, the Commission shall provide the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a report regarding—

(1)

the progress in implementing XBRL reporting within the Commission;

(2)

the use of XBRL data by Commission officials;

(3)

the use of XBRL data by investors;

(4)

the results of the analysis required by section 412; and

(5)

any additional information the Commission considers relevant for increasing transparency, decreasing costs, and increasing efficiency of regulatory filings with the Commission.

414.

Definitions

As used in this subtitle, the terms Commission, emerging growth company, issuer, and securities laws have the meanings given such terms in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c).

D

Securities and Exchange Commission Overpayment Credit

416.

Refunding or crediting overpayment of section 31 fees

(a)

In general

Section 31 of the Securities Exchange Act of 1934 (15 U.S.C. 78ee) is amended by adding at the end the following:

(n)

Overpayment

If a national securities exchange or national securities association pays to the Commission an amount in excess of fees and assessments due under this section and informs the Commission of such amount paid in excess within 10 years of the date of the payment, the Commission shall offset future fees and assessments due by such exchange or association in an amount equal to such excess amount.

.

(b)

Applicability

The amendment made by this section shall apply to any fees and assessments paid before, on, or after the date of enactment of this section.

E

Fair Access to Investment Research

421.

Safe harbor for investment fund research

(a)

Expansion of the safe harbor

Not later than the end of the 45-day period beginning on the date of enactment of this Act, the Securities and Exchange Commission shall propose, and not later than the end of the 120-day period beginning on such date, the Commission shall adopt, upon such terms, conditions, or requirements as the Commission may determine necessary or appropriate in the public interest, for the protection of investors, and for the promotion of capital formation, revisions to section 230.139 of title 17, Code of Federal Regulations, to provide that a covered investment fund research report that is published or distributed by a broker or dealer—

(1)

shall be deemed, for purposes of sections 2(a)(10) and 5(c) of the Securities Act of 1933 (15 U.S.C. 77b(a)(10), 77e(c)), not to constitute an offer for sale or an offer to sell a security that is the subject of an offering pursuant to a registration statement that is effective, even if the broker or dealer is participating or will participate in the registered offering of the covered investment fund’s securities; and

(2)

shall be deemed to satisfy the conditions of subsection (a)(1) or (a)(2) of section 230.139 of title 17, Code of Federal Regulations, or any successor provisions, for purposes of the Commission’s rules and regulations under the Federal securities laws and the rules of any self-regulatory organization.

(b)

Implementation of safe harbor

In implementing the safe harbor pursuant to subsection (a), the Commission shall—

(1)

not, in the case of a covered investment fund with a class of securities in substantially continuous distribution, condition the safe harbor on whether the broker’s or dealer’s publication or distribution of a covered investment fund research report constitutes such broker’s or dealer’s initiation or reinitiation of research coverage on such covered investment fund or its securities;

(2)

not—

(A)

require the covered investment fund to have been registered as an investment company under the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) or subject to the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o(d)) for any period exceeding the period of time referenced under paragraph (a)(1)(i)(A)(1) of section 230.139 of title 17, Code of Federal Regulations; or

(B)

impose a minimum float provision exceeding that referenced in paragraph (a)(1)(i)(A)(1)(i) of section 230.139 of title 17, Code of Federal Regulations;

(3)

provide that a self-regulatory organization may not maintain or enforce any rule that would—

(A)

prohibit the ability of a member to publish or distribute a covered investment fund research report solely because the member is also participating in a registered offering or other distribution of any securities of such covered investment fund; or

(B)

prohibit the ability of a member to participate in a registered offering or other distribution of securities of a covered investment fund solely because the member has published or distributed a covered investment fund research report about such covered investment fund or its securities; and

(4)

provide that a covered investment fund research report shall not be subject to section 24(b) of the Investment Company Act of 1940 (15 U.S.C. 80a–24(b)) or the rules and regulations thereunder, except that such report may still be subject to such section and the rules and regulations thereunder to the extent that it is otherwise not subject to the content standards in the rules of any self-regulatory organization related to research reports, including those contained in the rules governing communications with the public regarding investment companies or substantially similar standards.

(c)

Rules of construction

Nothing in this Act shall be construed as in any way limiting—

(1)

the applicability of the antifraud or antimanipulation provisions of the Federal securities laws and rules adopted thereunder to a covered investment fund research report, including section 17 of the Securities Act of 1933 (15 U.S.C. 77q), section 34(b) of the Investment Company Act of 1940 (15 U.S.C. 80a–33), and sections 9 and 10 of the Securities Exchange Act of 1934 (15 U.S.C. 78i, 78j); or

(2)

the authority of any self-regulatory organization to examine or supervise a member’s practices in connection with such member’s publication or distribution of a covered investment fund research report for compliance with applicable provisions of the Federal securities laws or self-regulatory organization rules related to research reports, including those contained in rules governing communications with the public.

(d)

Interim effectiveness of safe harbor

(1)

In general

From and after the 120-day period beginning on the date of enactment of this Act, if the Commission has not adopted revisions to section 230.139 of title 17, Code of Federal Regulations, as required by subsection (a), and until such time as the Commission has done so, a broker or dealer distributing or publishing a covered investment fund research report after such date shall be able to rely on the provisions of section 230.139 of title 17, Code of Federal Regulations, and the broker or dealer’s publication of such report shall be deemed to satisfy the conditions of subsection (a)(1) or (a)(2) of section 230.139 of title 17, Code of Federal Regulations, if the covered investment fund that is the subject of such report satisfies the reporting history requirements (without regard to Form S–3 or Form F–3 eligibility) and minimum float provisions of such subsections for purposes of the Commission’s rules and regulations under the Federal securities laws and the rules of any self-regulatory organization, as if revised and implemented in accordance with subsections (a) and (b).

(2)

Status of covered investment fund

After such period and until the Commission has adopted revisions to section 230.139 and FINRA has revised rule 2210, for purposes of subsection (c)(7)(O) of such rule, a covered investment fund shall be deemed to be a security that is listed on a national securities exchange and that is not subject to section 24(b) of the Investment Company Act of 1940 (15 U.S.C. 80a–24(b)). Communications concerning only covered investment funds that fall within the scope of such section shall not be required to be filed with FINRA.

(e)

Definitions

For purposes of this section:

(1)

The term covered investment fund research report means a research report published or distributed by a broker or dealer about a covered investment fund or any securities issued by the covered investment fund, but not including a research report to the extent that it is published or distributed by the covered investment fund or any affiliate of the covered investment fund.

(2)

The term covered investment fund means—

(A)

an investment company registered under, or that has filed an election to be treated as a business development company under, the Investment Company Act of 1940 and that has filed a registration statement under the Securities Act of 1933 for the public offering of a class of its securities, which registration statement has been declared effective by the Commission; and

(B)

a trust or other person—

(i)

issuing securities in an offering registered under the Securities Act of 1933 and which class of securities is listed for trading on a national securities exchange;

(ii)

the assets of which consist primarily of commodities, currencies, or derivative instruments that reference commodities or currencies, or interests in the foregoing; and

(iii)

that provides in its registration statement under the Securities Act of 1933 that a class of its securities are purchased or redeemed, subject to conditions or limitations, for a ratable share of its assets.

(3)

The term FINRA means the Financial Industry Regulatory Authority.

(4)

The term research report has the meaning given that term under section 2(a)(3) of the Securities Act of 1933 (15 U.S.C. 77b(a)(3)), except that such term shall not include an oral communication.

(5)

The term self-regulatory organization has the meaning given to that term under section 3(a)(26) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(26)).

F

Accelerating Access to Capital

426.

Expanded eligibility for use of Form S–3

Not later than 45 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise Form S–3—

(1)

so as to permit securities to be registered pursuant to General Instruction I.B.1. of such form provided that either—

(A)

the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant is $75,000,000 or more; or

(B)

the registrant has at least one class of common equity securities listed and registered on a national securities exchange; and

(2)

so as to remove the requirement of paragraph (c) from General Instruction I.B.6. of such form.

G

Enhancing the RAISE Act

431.

Certain accredited investor transactions

Section 4 of the Securities Act of 1933 (15 U.S.C. 77d) is amended—

(1)

by amending subsection (d) to read as follows:

(d)
(1)

The transactions referred to in subsection (a)(7) are transactions where—

(A)

each purchaser is an accredited investor, as that term is defined in section 230.501(a) of title 17, Code of Federal Regulations (or any successor thereto); and

(B)

if any securities sold in reliance on subsection (a)(7) are offered by means of any general solicitation or general advertising, all such sales are made through a platform available only to accredited investors.

(2)

Securities sold in reliance on subsection (a)(7) shall be deemed to have been acquired in a transaction not involving any public offering.

(3)

The exemption provided by this subsection shall not be available for a transaction where the seller is—

(A)

an issuer, its subsidiaries or parent;

(B)

an underwriter acting on behalf of the issuer, its subsidiaries or parent, which receives compensation from the issuer with respect to such sale; or

(C)

a dealer.

(4)

A transaction meeting the requirements of this subsection shall be deemed not to be a distribution for purposes of section 2(a)(11).

; and

(2)

by striking subsection (e).

H

Small Business Credit Availability

436.

Business development company ownership of securities of investment advisers and certain financial companies

(a)

In general

Section 60 of the Investment Company Act of 1940 (15 U.S.C. 80a–59) is amended—

(1)

by striking Notwithstanding and inserting (a) Notwithstanding;

(2)

by striking except that the Commission shall not and inserting the following:

except that—

(1)

section 12 shall not apply to the purchasing, otherwise acquiring, or holding by a business development company of any security issued by, or any other interest in the business of, any person who is an investment adviser registered under title II of this Act, who is an investment adviser to an investment company, or who is an eligible portfolio company; and

(2)

the Commission shall not

;

(3)

by adding at the end the following:

(b)

Nothing in this section shall prevent the Commission from issuing rules to address potential conflicts of interest between business development companies and investment advisers.

.

(b)

Definition of eligible portfolio company

Section 2(a)(46)(B) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)(46)(B)) is amended by inserting before the semicolon the following: (unless it is described in paragraph (2), (3), (4), (5), (6), or (9) of such section).

(c)

Investment threshold

Section 55(a) of the Investment Company Act of 1940 is amended by inserting before the colon the following: , provided that no more than 50 percent of its total assets are assets described in section 3(c).

437.

Expanding access to capital for business development companies

(a)

In general

Section 61(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–60(a)) is amended—

(1)

by redesignating paragraphs (2) through (4) as paragraphs (3) through (5), respectively;

(2)

by striking paragraph (1) and inserting the following:

(1)

Except as provided in paragraph (2), the asset coverage requirements of subparagraphs (A) and (B) of section 18(a)(1) (and any related rule promulgated under this Act) applicable to business development companies shall be 200 percent.

(2)

The asset coverage requirements of subparagraphs (A) and (B) of section 18(a)(1) and of subparagraphs (A) and (B) of section 18(a)(2) (and any related rule promulgated under this Act) applicable to a business development company shall be 150 percent if—

(A)

within five business days of the approval of the adoption of the asset coverage requirements described in clause (ii), the business development company discloses such approval and the date of its effectiveness in a Form 8–K filed with the Commission and in a notice on its website and discloses in its periodic filings made under section 13 of the Securities and Exchange Act of 1934 (15 U.S.C. 78m)—

(i)

the aggregate value of the senior securities issued by such company and the asset coverage percentage as of the date of such company’s most recent financial statements; and

(ii)

that such company has adopted the asset coverage requirements of this subparagraph and the effective date of such requirements;

(B)

with respect to a business development company that issues equity securities that are registered on a national securities exchange, the periodic filings of the company under section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m) include disclosures reasonably designed to ensure that shareholders are informed of—

(i)

the amount of indebtedness and asset coverage ratio of the company, determined as of the date of the financial statements of the company dated on or most recently before the date of such filing; and

(ii)

the principal risk factors associated with such indebtedness, to the extent such risk is incurred by the company; and

(C)
(i)

the application of this paragraph to the company is approved by the required majority (as defined in section 57(o)) of the directors of or general partners of such company who are not interested persons of the business development company, which application shall become effective on the date that is 1 year after the date of the approval, and, with respect to a business development company that issues equity securities that are not registered on a national securities exchange, the company extends, to each person who is a shareholder as of the date of the approval, an offer to repurchase the equity securities held by such person as of such approval date, with 25 percent of such securities to be repurchased in each of the four quarters following such approval date; or

(ii)

the company obtains, at a special or annual meeting of shareholders or partners at which a quorum is present, the approval of more than 50 percent of the votes cast of the application of this paragraph to the company, which application shall become effective on the date immediately after the date of the approval.

;

(3)

in paragraph (3) (as redesignated), by inserting or which is a stock after indebtedness;

(4)

in subparagraph (A) of paragraph (4) (as redesignated)—

(A)

in the matter preceding clause (i), by striking voting; and

(B)

by amending clause (iii) to read as follows:

(iii)

the exercise or conversion price at the date of issuance of such warrants, options, or rights is not less than—

(I)

the market value of the securities issuable upon the exercise of such warrants, options, or rights at the date of issuance of such warrants, options, or rights; or

(II)

if no such market value exists, the net asset value of the securities issuable upon the exercise of such warrants, options, or rights at the date of issuance of such warrants, options, or rights; and

; and

(5)

by adding at the end the following:

(6)
(A)

Except as provided in subparagraph (B), the following shall not apply to a business development company:

(i)

Subparagraphs (C) and (D) of section 18(a)(2).

(ii)

Subparagraph (E) of section 18(a)(2), to the extent such subparagraph requires any priority over any other class of stock as to distribution of assets upon liquidation.

(iii)

With respect to a senior security which is a stock, subsections (c) and (i) of section 18.

(B)

Subparagraph (A) shall not apply with respect to preferred stock issued to a person who is not known by the company to be a qualified institutional buyer (as defined in section 3(a) of the Securities Exchange Act of 1934).

.

(b)

Conforming amendments

The Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) is amended—

(1)

in section 57—

(A)

in subsection (j)(1), by striking section 61(a)(3)(B) and inserting section 61(a)(4)(B); and

(B)

in subsection (n)(2), by striking section 61(a)(3)(B) and inserting section 61(a)(4)(B); and

(2)

in section 63(3), by striking section 61(a)(3) and inserting section 61(a)(4).

438.

Parity for business development companies regarding offering and proxy rules

(a)

Revision to rules

Not later than 1 year after the date of enactment of this Act, the Securities and Exchange Commission shall revise any rules to the extent necessary to allow a business development company that has filed an election pursuant to section 54 of the Investment Company Act of 1940 (15 U.S.C. 80a–53) to use the securities offering and proxy rules that are available to other issuers that are required to file reports under section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m; 78o(d)). Any action that the Commission takes pursuant to this subsection shall include the following:

(1)

The Commission shall revise rule 405 under the Securities Act of 1933 (17 CFR 230.405)—

(A)

to remove the exclusion of a business development company from the definition of a well-known seasoned issuer provided by that rule; and

(B)

to add registration statements filed on Form N–2 to the definition of automatic shelf registration statement provided by that rule.

(2)

The Commission shall revise rules 168 and 169 under the Securities Act of 1933 (17 CFR 230.168 and 230.169) to remove the exclusion of a business development company from an issuer that can use the exemptions provided by those rules.

(3)

The Commission shall revise rules 163 and 163A under the Securities Act of 1933 (17 CFR 230.163 and 230.163A) to remove a business development company from the list of issuers that are ineligible to use the exemptions provided by those rules.

(4)

The Commission shall revise rule 134 under the Securities Act of 1933 (17 CFR 230.134) to remove the exclusion of a business development company from that rule.

(5)

The Commission shall revise rules 138 and 139 under the Securities Act of 1933 (17 CFR 230.138 and 230.139) to specifically include a business development company as an issuer to which those rules apply.

(6)

The Commission shall revise rule 164 under the Securities Act of 1933 (17 CFR 230.164) to remove a business development company from the list of issuers that are excluded from that rule.

(7)

The Commission shall revise rule 433 under the Securities Act of 1933 (17 CFR 230.433) to specifically include a business development company that is a well-known seasoned issuer as an issuer to which that rule applies.

(8)

The Commission shall revise rule 415 under the Securities Act of 1933 (17 CFR 230.415)—

(A)

to state that the registration for securities provided by that rule includes securities registered by a business development company on Form N–2; and

(B)

to provide an exception for a business development company from the requirement that a Form N–2 registrant must furnish the undertakings required by item 34.4 of Form N–2.

(9)

The Commission shall revise rule 497 under the Securities Act of 1933 (17 CFR 230.497) to include a process for a business development company to file a form of prospectus that is parallel to the process for filing a form of prospectus under rule 424(b).

(10)

The Commission shall revise rules 172 and 173 under the Securities Act of 1933 (17 CFR 230.172 and 230.173) to remove the exclusion of an offering of a business development company from those rules.

(11)

The Commission shall revise rule 418 under the Securities Act of 1933 (17 CFR 230.418) to provide that a business development company that would otherwise meet the eligibility requirements of General Instruction I.A of Form S–3 shall be exempt from paragraph (a)(3) of that rule.

(12)

The Commission shall revise rule 14a–101 under the Securities Exchange Act of 1934 (17 CFR 240.14a–101) to provide that a business development company that would otherwise meet the requirements of General Instruction I.A of Form S–3 shall be deemed to meet the requirements of Form S–3 for purposes of Schedule 14A.

(13)

The Commission shall revise rule 103 under Regulation FD (17 CFR 243.103) to provide that paragraph (a) of that rule applies for purposes of Form N–2.

(b)

Revision to form N–2

Not later than 1 year after the date of enactment of this Act, the Commission shall revise Form N–2—

(1)

to include an item or instruction that is similar to item 12 on Form S–3 to provide that a business development company that would otherwise meet the requirements of Form S–3 shall incorporate by reference its reports and documents filed under the Securities Exchange Act of 1934 into its registration statement filed on Form N–2; and

(2)

to include an item or instruction that is similar to the instruction regarding automatic shelf offerings by well-known seasoned issuers on Form S–3 to provide that a business development company that is a well-known seasoned issuer may file automatic shelf offerings on Form N–2.

(c)

Treatment if revisions not completed in timely manner

If the Commission fails to complete the revisions required by subsections (a) and (b) by the time required by such subsections, a business development company shall be entitled to treat such revisions as having been completed in accordance with the actions required to be taken by the Commission by such subsections until such time as such revisions are completed by the Commission.

(d)

Rule of construction

Any reference in this section to a rule or form means such rule or form or any successor rule or form.

I

Fostering Innovation

441.

Temporary exemption for low-revenue issuers

Section 404 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262) is amended by adding at the end the following:

(d)

Temporary exemption for low-Revenue issuers

(1)

Low-revenue exemption

Subsection (b) shall not apply with respect to an audit report prepared for an issuer that—

(A)

ceased to be an emerging growth company on the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under the Securities Act of 1933;

(B)

had average annual gross revenues of less than $50,000,000 as of its most recently completed fiscal year; and

(C)

is not a large accelerated filer.

(2)

Expiration of temporary exemption

An issuer ceases to be eligible for the exemption described under paragraph (1) at the earliest of—

(A)

the last day of the fiscal year of the issuer following the tenth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under the Securities Act of 1933;

(B)

the last day of the fiscal year of the issuer during which the average annual gross revenues of the issuer exceed $50,000,000; or

(C)

the date on which the issuer becomes a large accelerated filer.

(3)

Definitions

For purposes of this subsection:

(A)

Average annual gross revenues

The term average annual gross revenues means the total gross revenues of an issuer over its most recently completed three fiscal years divided by three.

(B)

Emerging growth company

The term emerging growth company has the meaning given such term under section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c).

(C)

Large accelerated filer

The term large accelerated filer has the meaning given that term under section 240.12b–2 of title 17, Code of Federal Regulations, or any successor thereto.

.

J

Small Business Capital Formation Enhancement

446.

Annual review of government-business forum on capital formation

Section 503 of the Small Business Investment Incentive Act of 1980 (15 U.S.C. 80c–1) is amended by adding at the end the following:

(e)

The Commission shall—

(1)

review the findings and recommendations of the forum; and

(2)

each time the forum submits a finding or recommendation to the Commission, promptly issue a public statement—

(A)

assessing the finding or recommendation of the forum; and

(B)

disclosing the action, if any, the Commission intends to take with respect to the finding or recommendation.

.

K

Helping Angels Lead Our Startups

451.

Definition of angel investor group

As used in this subtitle, the term angel investor group means any group that—

(1)

is composed of accredited investors interested in investing personal capital in early-stage companies;

(2)

holds regular meetings and has defined processes and procedures for making investment decisions, either individually or among the membership of the group as a whole; and

(3)

is neither associated nor affiliated with brokers, dealers, or investment advisers.

452.

Clarification of general solicitation

(a)

In general

Not later than 6 months after the date of enactment of this Act, the Securities and Exchange Commission shall revise Regulation D of its rules (17 CFR 230.500 et seq.) to require that in carrying out the prohibition against general solicitation or general advertising contained in section 230.502(c) of title 17, Code of Federal Regulations, the prohibition shall not apply to a presentation or other communication made by or on behalf of an issuer which is made at an event—

(1)

sponsored by—

(A)

the United States or any territory thereof, by the District of Columbia, by any State, by a political subdivision of any State or territory, or by any agency or public instrumentality of any of the foregoing;

(B)

a college, university, or other institution of higher education;

(C)

a nonprofit organization;

(D)

an angel investor group;

(E)

a venture forum, venture capital association, or trade association; or

(F)

any other group, person or entity as the Securities and Exchange Commission may determine by rule;

(2)

where any advertising for the event does not reference any specific offering of securities by the issuer;

(3)

the sponsor of which—

(A)

does not make investment recommendations or provide investment advice to event attendees;

(B)

does not engage in an active role in any investment negotiations between the issuer and investors attending the event;

(C)

does not charge event attendees any fees other than administrative fees; and

(D)

does not receive any compensation with respect to such event that would require registration of the sponsor as a broker or a dealer under the Securities Exchange Act of 1934, or as an investment advisor under the Investment Advisers Act of 1940; and

(4)

where no specific information regarding an offering of securities by the issuer is communicated or distributed by or on behalf of the issuer, other than—

(A)

that the issuer is in the process of offering securities or planning to offer securities;

(B)

the type and amount of securities being offered;

(C)

the amount of securities being offered that have already been subscribed for; and

(D)

the intended use of proceeds of the offering.

(b)

Rule of construction

Subsection (a) may only be construed as requiring the Securities and Exchange Commission to amend the requirements of Regulation D with respect to presentations and communications, and not with respect to purchases or sales.

L

Main Street Growth

456.

Venture exchanges

(a)

Securities Exchange Act of 1934

Section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end the following:

(m)

Venture exchange

(1)

Registration

(A)

In general

A national securities exchange may elect to be treated (or for a listing tier of such exchange to be treated) as a venture exchange by notifying the Commission of such election, either at the time the exchange applies to be registered as a national securities exchange or after registering as a national securities exchange.

(B)

Determination time period

With respect to a securities exchange electing to be treated (or for a listing tier of such exchange to be treated) as a venture exchange—

(i)

at the time the exchange applies to be registered as a national securities exchange, such application and election shall be deemed to have been approved by the Commission unless the Commission denies such application before the end of the 6-month period beginning on the date the Commission received such application; and

(ii)

after registering as a national securities exchange, such election shall be deemed to have been approved by the Commission unless the Commission denies such approval before the end of the 6-month period beginning on the date the Commission received notification of such election.

(2)

Powers and restrictions

A venture exchange—

(A)

may only constitute, maintain, or provide a market place or facilities for bringing together purchasers and sellers of venture securities;

(B)

may determine the increment to be used for quoting and trading venture securities on the exchange;

(C)

shall disseminate last sale and quotation information on terms that are fair and reasonable and not unreasonably discriminatory;

(D)

may choose to carry out periodic auctions for the sale of a venture security instead of providing continuous trading of the venture security; and

(E)

may not extend unlisted trading privileges to any venture security.

(3)

Exemptions from certain national security exchange regulations

A venture exchange shall not be required to—

(A)

comply with any of sections 242.600 through 242.612 of title 17, Code of Federal Regulations;

(B)

comply with any of sections 242.300 through 242.303 of title 17, Code of Federal Regulations;

(C)

submit any data to a securities information processor; or

(D)

use decimal pricing.

(4)

Treatment of certain exempted securities

A security that is exempt from registration pursuant to section 3(b) of the Securities Act of 1933 shall be exempt from section 12(a) of this title with respect to the trading of such security on a venture exchange, if the issuer of such security is in compliance with all disclosure obligations of such section 3(b) and the regulations issued under such section.

(5)

Definitions

For purposes of this subsection:

(A)

Early-stage, growth company

(i)

In general

The term early-stage, growth company means an issuer—

(I)

that has not made an initial public offering of any securities of the issuer; and

(II)

with a market capitalization of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest $1,000,000) or less.

(ii)

Treatment when market capitalization exceeds threshold

(I)

In general

In the case of an issuer that is an early-stage, growth company the securities of which are traded on a venture exchange, such issuer shall not cease to be an early-stage, growth company by reason of the market capitalization of such issuer exceeding the threshold specified in clause (i)(II) until the end of the period of 24 consecutive months during which the market capitalization of such issuer exceeds $2,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest $1,000,000).

(II)

Exemptions

If an issuer would cease to be an early-stage, growth company under subclause (I), the venture exchange may, at the request of the issuer, exempt the issuer from the market capitalization requirements of this subparagraph for the 1-year period that begins on the day after the end of the 24-month period described in such subclause. The venture exchange may, at the request of the issuer, extend the exemption for 1 additional year.

(B)

Venture security

The term venture security means—

(i)

securities of an early-stage, growth company that are exempt from registration pursuant to section 3(b) of the Securities Act of 1933; and

(ii)

securities of an emerging growth company.

.

(b)

Securities Act of 1933

Section 18(b)(1) of the Securities Act of 1933 (15 U.S.C. 77r(b)(1)) is amended—

(1)

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

(2)

in subparagraph (C), by striking the period and inserting ; or; and

(3)

by adding at the end the following:

(D)

a venture security, as defined under section 6(m)(5) of the Securities Exchange Act of 1934.

.

(c)

Sense of Congress

It is the sense of the Congress that the Securities and Exchange Commission should—

(1)

when necessary or appropriate in the public interest and consistent with the protection of investors, make use of the Commission’s general exemptive authority under section 36 of the Securities Exchange Act of 1934 (15 U.S.C. 78mm) with respect to the provisions added by this section; and

(2)

if the Commission determines appropriate, create an Office of Venture Exchanges within the Commission’s Division of Trading and Markets.

(d)

Rule of construction

Nothing in this section or the amendments made by this section shall be construed to impair or limit the construction of the antifraud provisions of the securities laws (as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))) or the authority of the Securities and Exchange Commission under those provisions.

(e)

Effective date for tiers of existing national securities exchanges

In the case of a securities exchange that is registered as a national securities exchange under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) on the date of the enactment of this Act, any election for a listing tier of such exchange to be treated as a venture exchange under subsection (m) of such section shall not take effect before the date that is 180 days after such date of enactment.

M

Micro Offering Safe Harbor

461.

Exemptions for micro-offerings

(a)

In general

Section 4 of the Securities Act of 1933 (15 U.S.C. 77d) is amended—

(1)

in subsection (a), by adding at the end the following:

(8)

transactions meeting the requirements of subsection (e).

; and

(2)

as amended by section 431(2), by inserting after subsection (d) the following:

(e)

Certain micro-Offerings

The transactions referred to in subsection (a)(8) are transactions involving the sale of securities by an issuer (including all entities controlled by or under common control with the issuer) that meet all of the following requirements:

(1)

Pre-existing relationship

Each purchaser has a substantive pre-existing relationship with an officer of the issuer, a director of the issuer, or a shareholder holding 10 percent or more of the shares of the issuer.

(2)

35 or fewer purchasers

There are no more than, or the issuer reasonably believes that there are no more than, 35 purchasers of securities from the issuer that are sold in reliance on the exemption provided under subsection (a)(8) during the 12-month period preceding such transaction.

(3)

Small offering amount

The aggregate amount of all securities sold by the issuer, including any amount sold in reliance on the exemption provided under subsection (a)(8), during the 12-month period preceding such transaction, does not exceed $500,000.

.

(b)

Exemption under State regulations

Section 18(b)(4) of the Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is amended—

(1)

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

(2)

in subparagraph (G), by striking the period and inserting ; or; and

(3)

by adding at the end the following:

(H)

section 4(a)(8).

.

N

Private Placement Improvement

466.

Revisions to SEC Regulation D

Not later than 45 days following the date of the enactment of this Act, the Securities and Exchange Commission shall revise Regulation D (17 CFR 501 et seq.) in accordance with the following:

(1)

The Commission shall revise Form D filing requirements to require an issuer offering or selling securities in reliance on an exemption provided under Rule 506 of Regulation D to file with the Commission a single notice of sales containing the information required by Form D for each new offering of securities no earlier than 15 days after the date of the first sale of securities in the offering. The Commission shall not require such an issuer to file any notice of sales containing the information required by Form D except for the single notice described in the previous sentence.

(2)

The Commission shall make the information contained in each Form D filing available to the securities commission (or any agency or office performing like functions) of each State and territory of the United States and the District of Columbia.

(3)

The Commission shall not condition the availability of any exemption for an issuer under Rule 506 of Regulation D (17 CFR 230.506) on the issuer’s or any other person’s filing with the Commission of a Form D or any similar report.

(4)

The Commission shall not require issuers to submit written general solicitation materials to the Commission in connection with a Rule 506(c) offering, except when the Commission requests such materials pursuant to the Commission’s authority under section 8A or section 20 of the Securities Act of 1933 (15 U.S.C. 77h–1 or 77t) or section 9, 10(b), 21A, 21B, or 21C of the Securities Exchange Act of 1934 (15 U.S.C. 78i, 78j(b), 78u–1, 78u–2, or 78u–3).

(5)

The Commission shall not extend the requirements contained in Rule 156 to private funds.

(6)

The Commission shall revise Rule 501(a) of Regulation D to provide that a person who is a knowledgeable employee of a private fund or the fund’s investment adviser, as defined in Rule 3c–5(a)(4) (17 CFR 270.3c–5(a)(4)), shall be an accredited investor for purposes of a Rule 506 offering of a private fund with respect to which the person is a knowledgeable employee.

O

Supporting America’s Innovators

471.

Investor limitation for qualifying venture capital funds

Section 3(c)(1) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(c)(1)) is amended—

(1)

by inserting after one hundred persons the following: (or, with respect to a qualifying venture capital fund, 500 persons); and

(2)

by adding at the end the following:

(C)

The term qualifying venture capital fund means any venture capital fund (as defined pursuant to section 203(l)(1) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3(l)(1)) with no more than $50,000,000 in aggregate capital contributions and uncalled committed capital, as such dollar amount is annually adjusted by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.

.

P

Fix Crowdfunding

476.

Crowdfunding exemption

(a)

Securities Act of 1933

Section 4(a) of the Securities Act of 1933 (15 U.S.C. 77d) is amended by striking paragraph (6) and inserting the following:

(6)

transactions involving the offer or sale of securities by an issuer, provided that—

(A)

in the case of a transaction involving an intermediary between the issuer and the investor, such intermediary complies with the requirements under section 4A(a); and

(B)

in the case of a transaction not involving an intermediary between the issuer and the investor, the issuer complies with the requirements under section 4A(b).

.

(b)

Requirements to qualify for crowdfunding exemption

Section 4A of the Securities Act of 1933 (15 U.S.C. 77d–1) is amended to read as follows:

4A.

Requirements with respect to certain small transactions

(a)

Requirements on intermediaries

For purposes of section 4(a)(6), a person acting as an intermediary in a transaction involving the offer or sale of securities shall comply with the requirements of this subsection if the intermediary—

(1)

warns investors, including on the intermediary’s website used for the offer and sale of such securities, of the speculative nature generally applicable to investments in startups, emerging businesses, and small issuers, including risks in the secondary market related to illiquidity;

(2)

warns investors that they are subject to the restriction on sales requirement described under subsection (e);

(3)

takes reasonable measures to reduce the risk of fraud with respect to such transaction;

(4)

registers with the Commission and the Financial Industry Regulatory Authority, including by providing the Commission with the intermediary’s physical address, website address, and the names of the intermediary and employees of the intermediary, and keep such information up-to-date;

(5)

provides the Commission with continuous investor-level access to the intermediary’s website;

(6)

requires each potential investor to answer questions demonstrating—

(A)

an understanding of the level of risk generally applicable to investments in startups, emerging businesses, and small issuers;

(B)

an understanding of the risk of illiquidity; and

(C)

such other areas as the Commission may determine appropriate by rule or regulation, including information relating to the owners’ and management’s experience, and any related party transactions and conflicts of interest;

(7)

carries out a background check on the issuer’s principals;

(8)

provides the Commission and potential investors with notice of the offering not less than 10 days prior to such offering, not later than the first day securities are offered to potential investors, including—

(A)

the issuer’s name, legal status, physical address, and website address;

(B)

the names of the issuer’s principals;

(C)

the stated purpose and intended use of the proceeds of the offering sought by the issuer; and

(D)

the target offering amount and the deadline to reach the target offering amount;

(9)

outsources cash-management functions to a qualified third party custodian, such as a broker or dealer registered under section 15(b)(1) of the Securities Exchange Act of 1934, a trust company, or an insured depository institution;

(10)

makes available on the intermediary’s website a method of communication that permits the issuer and investors to communicate with one another; and

(11)

provides the Commission with a notice upon completion of the offering, which shall include the aggregate offering amount and the number of purchasers.

(b)

Requirements on issuers if no intermediary

For purposes of section 4(a)(6), an issuer who offers or sells securities without an intermediary shall comply with the requirements of this subsection if the issuer—

(1)

warns investors, including on the issuer’s website, of the speculative nature generally applicable to investments in startups, emerging businesses, and small issuers, including risks in the secondary market related to illiquidity;

(2)

warns investors that they are subject to the restriction on sales requirement described under subsection (e);

(3)

takes reasonable measures to reduce the risk of fraud with respect to such transaction;

(4)

provides the Commission with the issuer’s physical address, website address, and the names of the principals and employees of the issuers, and keeps such information up-to-date;

(5)

provides the Commission with continuous investor-level access to the issuer’s website;

(6)

requires each potential investor to answer questions demonstrating—

(A)

an understanding of the level of risk generally applicable to investments in startups, emerging businesses, and small issuers;

(B)

an understanding of the risk of illiquidity; and

(C)

such other areas as the Commission may determine appropriate by rule or regulation;

(7)

provides the Commission with notice of the offering not less than 10 days prior to such offering, not later than the first day securities are offered to potential investors, including—

(A)

the stated purpose and intended use of the proceeds of the offering sought by the issuer; and

(B)

the target offering amount and the deadline to reach the target offering amount;

(8)

outsources cash-management functions to a qualified third party custodian, such as a broker or dealer registered under section 15(b)(1) of the Securities Exchange Act of 1934, a trust company, or an insured depository institution;

(9)

makes available on the issuer’s website a method of communication that permits the issuer and investors to communicate with one another;

(10)

does not offer personalized investment advice;

(11)

provides the Commission with a notice upon completion of the offering, which shall include the aggregate offering amount and the number of purchasers; and

(c)

Verification of income

For purposes of section 4(a)(6), an issuer or intermediary may rely on certifications as to annual income provided by the person to whom the securities are sold to verify the investor’s income.

(d)

Information Available to States

The Commission shall make the notices described under subsections (a)(9), (a)(13), (b)(8), and (b)(13) and the information described under subsections (a)(4) and (b)(4) available to the States.

(e)

Restriction on sales

With respect to a transaction involving the issuance of securities described under section 4(a)(6), a purchaser may not transfer such securities during the 1-year period beginning on the date of purchase, unless such securities are sold to—

(1)

the issuer of such securities; or

(2)

an accredited investor.

(f)

Construction

(1)

No registration as broker

With respect to a transaction described under section 4(a)(6) involving an intermediary, such intermediary shall not be required to register as a broker under section 15(a)(1) of the Securities Exchange Act of 1934 solely by reason of participation in such transaction.

(2)

No preclusion of other capital raising

Nothing in this section or section 4(a)(6) shall be construed as preventing an issuer from raising capital through methods not described under section 4(a)(6).

.

(c)

Rulemaking

Not later than 180 days after the date of enactment of this Act, the Securities and Exchange Commission shall issue or revise such rules as may be necessary to carry out section 4A of the Securities Act of 1933, ans amended by this Act. In issuing or revising such rules, the Commission shall consider the costs and benefits of the action.

(d)

Disqualification

Not later than 180 days after the date of enactment of this Act, the Securities and Exchange Commission shall by rule or regulation establish disqualification provisions under which an issuer shall not be eligible to utilize the exemption under section 4(a)(6) of the Securities Act of 1933 (as amended by this Act) based on the disciplinary history of the issuer or its predecessors, affiliates, officers, directors, or persons fulfilling similar roles. The Commission shall also establish disqualification provisions under which an intermediary shall not be eligible to act as an intermediary in connection with an offering utilizing the exemption under section 4(a)(6) of the Securities Act of 1933 based on the disciplinary history of the intermediary or its predecessors, affiliates, officers, directors, or persons fulfilling similar roles. Such provisions shall be substantially similar to the disqualification provisions contained in the regulations adopted in accordance with section 926 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 77d note).

477.

Exclusion of crowdfunding investors from shareholder cap

Section 12(g)(5) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(5)) is amended—

(1)

by striking (5) For the purposes and inserting:

(5)

Definitions

(A)

In general

For the purposes

; and

(2)

by adding at the end the following:

(B)

Exclusion for persons holding certain securities

For purposes of this subsection, securities held by persons who purchase such securities in transactions described under section 4(a)(6) of the Securities Act of 1933 shall not be deemed to be held of record.

.

478.

Preemption of State law

(a)

In general

Section 18(b)(4)(C) of the Securities Act of 1933 (15 U.S.C. 77r(b)(4)(C)) is amended by striking section 4(6) and inserting section 4(a)(6).

(b)

Clarification of the preservation of State enforcement authority

(1)

In general

The amendments made by section 305(a) of the Jumpstart Our Business Startups Act, as amended by subsection (a), relate solely to State registration, documentation, and offering requirements, as described under section 18(a) of Securities Act of 1933 (15 U.S.C. 77r(a)), and shall have no impact or limitation on other State authority to take enforcement action with regard to an issuer, intermediary, or any other person or entity using the exemption from registration provided by section 4(a)(6) of such Act. Notwithstanding monetary penalties or sanctions, a State may not impose any filing or fee under such authority.

(2)

Clarification of State jurisdiction over unlawful conduct of intermediaries, issuers, and custodians

Section 18(c)(1) of the Securities Act of 1933 is amended by striking in connection with securities or securities transactions and all that follows and inserting the following:

in connection with securities or securities transactions, with respect to—

(A)

fraud or deceit;

(B)

unlawful conduct by a broker or dealer; and

(C)

with respect to a transaction described under section 4(a)(6), unlawful conduct by an intermediary, issuer, or custodian.

.

479.

Treatment of funding portals

Section 5312(c) of title 31, United States Code, is amended by adding at the end the following:

(2)

Funding portals not included in definition

The term financial institution (as defined in subsection (a)) does not include a funding portal (as defined under section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))).

.

Q

Corporate Governance Reform and Transparency

481.

Definitions

(a)

Securities Exchange Act of 1934

Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended by adding at the end the following new paragraphs:

(83)

Proxy advisory firm

The term proxy advisory firm means any person who is primarily engaged in the business of providing proxy voting research, analysis, or recommendations to clients, which conduct constitutes a solicitation within the meaning of section 14 and the Commission’s rules and regulations thereunder, except to the extent that the person is exempted by such rules and regulations from requirements otherwise applicable to persons engaged in a solicitation.

(84)

Person associated with a proxy advisory firm

The term person associated with a proxy advisory firm means any partner, officer, or director of a proxy advisory firm (or any person occupying a similar status or performing similar functions), any person directly or indirectly controlling, controlled by, or under common control with a proxy advisory firm, or any employee of a proxy advisory firm, except that persons associated with a proxy advisory firm whose functions are clerical or ministerial shall not be included in the meaning of such term. The Commission may by rules and regulations classify, for purposes or any portion or portions of this Act, persons, including employees controlled by a proxy advisory firm.

.

(b)

Applicable definitions

As used in this subtitle—

(1)

the term Commission means the Securities and Exchange Commission; and

(2)

the term proxy advisory firm has the same meaning as in section 3(a)(83) of the Securities Exchange Act of 1934, as added by this subtitle.

482.

Registration of proxy advisory firms

(a)

Amendment

The Securities Exchange Act of 1934 is amended by inserting after section 15G the following new section:

15H.

Registration of proxy advisory firms

(a)

Conduct prohibited

It shall be unlawful for a proxy advisory firm to make use of the mails or any means or instrumentality of interstate commerce to provide proxy voting research, analysis, or recommendations to any client, unless such proxy advisory firm is registered under this section.

(b)

Registration procedures

(1)

Application for registration

(A)

In general

A proxy advisory firm must file with the Commission an application for registration, in such form as the Commission shall require, by rule or regulation, and containing the information described in subparagraph (B).

(B)

Required information

An application for registration under this section shall contain information regarding—

(i)

a certification that the applicant has adequate financial and managerial resources to consistently provide proxy advice based on accurate information;

(ii)

the procedures and methodologies that the applicant uses in developing proxy voting recommendations, including whether and how the applicant considers the size of a company when making proxy voting recommendations;

(iii)

the organizational structure of the applicant;

(iv)

whether or not the applicant has in effect a code of ethics, and if not, the reasons therefor;

(v)

any potential or actual conflict of interest relating to the ownership structure of the applicant or the provision of proxy advisory services by the applicant, including whether the proxy advisory firm engages in services ancillary to the provision of proxy advisory services such as consulting services for corporate issuers, and if so the revenues derived therefrom;

(vi)

the policies and procedures in place to manage conflicts of interest under subsection (f); and

(vii)

any other information and documents concerning the applicant and any person associated with such applicant as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors.

(2)

Review of application

(A)

Initial determination

Not later than 90 days after the date on which the application for registration is filed with the Commission under paragraph (1) (or within such longer period as to which the applicant consents) the Commission shall—

(i)

by order, grant registration; or

(ii)

institute proceedings to determine whether registration should be denied.

(B)

Conduct of proceedings

(i)

Content

Proceedings referred to in subparagraph (A)(ii) shall—

(I)

include notice of the grounds for denial under consideration and an opportunity for hearing; and

(II)

be concluded not later than 120 days after the date on which the application for registration is filed with the Commission under paragraph (1).

(ii)

Determination

At the conclusion of such proceedings, the Commission, by order, shall grant or deny such application for registration.

(iii)

Extension authorized

The Commission may extend the time for conclusion of such proceedings for not longer than 90 days, if it finds good cause for such extension and publishes its reasons for so finding, or for such longer period as to which the applicant consents.

(C)

Grounds for decision

The Commission shall grant registration under this subsection—

(i)

if the Commission finds that the requirements of this section are satisfied; and

(ii)

unless the Commission finds (in which case the Commission shall deny such registration) that—

(I)

the applicant has failed to certify to the Commission’s satisfaction that it has adequate financial and managerial resources to consistently provide proxy advice based on accurate information and to materially comply with the procedures and methodologies disclosed under paragraph (1)(B) and with subsections (f) and (g); or

(II)

if the applicant were so registered, its registration would be subject to suspension or revocation under subsection (e).

(3)

Public availability of information

Subject to section 24, the Commission shall make the information and documents submitted to the Commission by a proxy advisory firm in its completed application for registration, or in any amendment submitted under paragraph (1) or (2) of subsection (c), publicly available on the Commission’s website, or through another comparable, readily accessible means.

(c)

Update of registration

(1)

Update

Each registered proxy advisory firm shall promptly amend and update its application for registration under this section if any information or document provided therein becomes materially inaccurate, except that a registered proxy advisory firm is not required to amend the information required to be filed under subsection (b)(1)(B)(i) by filing information under this paragraph, but shall amend such information in the annual submission of the organization under paragraph (2) of this subsection.

(2)

Certification

Not later than 90 calendar days after the end of each calendar year, each registered proxy advisory firm shall file with the Commission an amendment to its registration, in such form as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors—

(A)

certifying that the information and documents in the application for registration of such registered proxy advisory firm continue to be accurate in all material respects; and

(B)

listing any material change that occurred to such information or documents during the previous calendar year.

(d)

Censure, denial, or suspension of registration; notice and hearing

The Commission, by order, shall censure, place limitations on the activities, functions, or operations of, suspend for a period not exceeding 12 months, or revoke the registration of any registered proxy advisory firm if the Commission finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, suspension, or revocation is necessary for the protection of investors and in the public interest and that such registered proxy advisory firm, or any person associated with such an organization, whether prior to or subsequent to becoming so associated—

(1)

has committed or omitted any act, or is subject to an order or finding, enumerated in subparagraph (A), (D), (E), (H), or (G) of section 15(b)(4), has been convicted of any offense specified in section 15(b)(4)(B), or is enjoined from any action, conduct, or practice specified in subparagraph (C) of section 15(b)(4), during the 10-year period preceding the date of commencement of the proceedings under this subsection, or at any time thereafter;

(2)

has been convicted during the 10-year period preceding the date on which an application for registration is filed with the Commission under this section, or at any time thereafter, of—

(A)

any crime that is punishable by imprisonment for one or more years, and that is not described in section 15(b)(4)(B); or

(B)

a substantially equivalent crime by a foreign court of competent jurisdiction;

(3)

is subject to any order of the Commission barring or suspending the right of the person to be associated with a registered proxy advisory firm;

(4)

fails to furnish the certifications required under subsections (b)(2)(C)(ii)(I) and (c)(2);

(5)

has engaged in one or more prohibited acts enumerated in paragraph (1); or

(6)

fails to maintain adequate financial and managerial resources to consistently offer advisory services with integrity, including by failing to comply with subsections (f) or (g).

(e)

Termination of registration

(1)

Voluntary withdrawal

A registered proxy advisory firm may, upon such terms and conditions as the Commission may establish as necessary in the public interest or for the protection of investors, which terms and conditions shall include at a minimum that the registered proxy advisory firm will no longer conduct such activities as to bring it within the definition of proxy advisory firm in section 3(a)(83) of the Securities Exchange Act of 1934, withdraw from registration by filing a written notice of withdrawal to the Commission.

(2)

Commission authority

In addition to any other authority of the Commission under this title, if the Commission finds that a registered proxy advisory firm is no longer in existence or has ceased to do business as a proxy advisory firm, the Commission, by order, shall cancel the registration under this section of such registered proxy advisory firm.

(f)

Management of conflicts of interest

(1)

Organization policies and procedures

Each registered proxy advisory firm shall establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of the business of such registered proxy advisory firm and associated persons, to address and manage any conflicts of interest that can arise from such business.

(2)

Commission authority

The Commission shall issue final rules to prohibit, or require the management and disclosure of, any conflicts of interest relating to the offering of proxy advisory services by a registered proxy advisory firm, including, without limitation, conflicts of interest relating to—

(A)

the manner in which a registered proxy advisory firm is compensated by the client, or any affiliate of the client, for providing proxy advisory services;

(B)

the provision of consulting, advisory, or other services by a registered proxy advisory firm, or any person associated with such registered proxy advisory firm, to the client;

(C)

business relationships, ownership interests, or any other financial or personal interests between a registered proxy advisory firm, or any person associated with such registered proxy advisory firm, and any client, or any affiliate of such client;

(D)

transparency around the formulation of proxy voting policies;

(E)

the execution of proxy votes if such votes are based upon recommendations made by the proxy advisory firm in which someone other than the issuer is a proponent;

(F)

issuing recommendations where proxy advisory firms provide advisory services to a company; and

(G)

any other potential conflict of interest, as the Commission deems necessary or appropriate in the public interest or for the protection of investors.

(g)

Reliability of proxy advisory firm services

(1)

In general

Each registered proxy advisory firm shall have staff sufficient to produce proxy voting recommendations that are based on accurate and current information. Each registered proxy advisory firm shall detail procedures sufficient to permit companies receiving proxy advisory firm recommendations access in a reasonable time to the draft recommendations, with an opportunity to provide meaningful comment thereon, including the opportunity to present details to the person responsible for developing the recommendation in person or telephonically. Each registered proxy advisory firm shall employ an ombudsman to receive complaints about the accuracy of voting information used in making recommendations from the subjects of the proxy advisory firm’s voting recommendations, and shall resolve those complaints in a timely fashion and in any event prior to voting on the matter to which the recommendation relates.

(2)

Draft recommendations defined

For purposes of this subsection, the term draft recommendations

(A)

means the overall conclusions of proxy voting recommendations prepared for the clients of a proxy advisory firm, including any public data cited therein, any company information or substantive analysis impacting the recommendation, and the specific voting recommendations on individual proxy ballot issues; and

(B)

does not include the entirety of the proxy advisory firm’s final report to its clients.

(h)

Designation of compliance officer

Each registered proxy advisory firm shall designate an individual responsible for administering the policies and procedures that are required to be established pursuant to subsections (f) and (g), and for ensuring compliance with the securities laws and the rules and regulations thereunder, including those promulgated by the Commission pursuant to this section.

(i)

Prohibited conduct

(1)

Prohibited acts and practices

The Commission shall issue final rules to prohibit any act or practice relating to the offering of proxy advisory services by a registered proxy advisory firm that the Commission determines to be unfair or coercive, including any act or practice relating to—

(A)

conditioning a voting recommendation or other proxy advisory firm recommendation on the purchase by an issuer or an affiliate thereof of other services or products, of the registered proxy advisory firm or any person associated with such registered proxy advisory firm; and

(B)

modifying a voting recommendation or otherwise departing from its adopted systematic procedures and methodologies in the provision of proxy advisory services, based on whether an issuer, or affiliate thereof, subscribes or will subscribe to other services or product of the registered proxy advisory firm or any person associated with such organization.

(2)

Rule of construction

Nothing in paragraph (1), or in any rules or regulations adopted thereunder, may be construed to modify, impair, or supersede the operation of any of the antitrust laws (as defined in the first section of the Clayton Act, except that such term includes section 5 of the Federal Trade Commission Act, to the extent that such section 5 applies to unfair methods of competition).

(j)

Statements of financial condition

Each registered proxy advisory firm shall, on a confidential basis, file with the Commission, at intervals determined by the Commission, such financial statements, certified (if required by the rules or regulations of the Commission) by an independent public auditor, and information concerning its financial condition, as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors.

(k)

Annual report

Each registered proxy advisory firm shall, at the beginning of each fiscal year of such firm, report to the Commission on the number of shareholder proposals its staff reviewed in the prior fiscal year, the number of recommendations made in the prior fiscal year, the number of staff who reviewed and made recommendations on such proposals in the prior fiscal year, and the number of recommendations made in the prior fiscal year where the proponent of such recommendation was a client of or received services from the proxy advisory firm.

(l)

Transparent policies

Each registered proxy advisory firm shall file with the Commission and make publicly available its methodology for the formulation of proxy voting policies and voting recommendations.

(m)

Rules of construction

(1)

No waiver of rights, privileges, or defenses

Registration under and compliance with this section does not constitute a waiver of, or otherwise diminish, any right, privilege, or defense that a registered proxy advisory firm may otherwise have under any provision of State or Federal law, including any rule, regulation, or order thereunder.

(2)

No private right of action

Nothing in this section may be construed as creating any private right of action, and no report filed by a registered proxy advisory firm in accordance with this section or section 17 shall create a private right of action under section 18 or any other provision of law.

(n)

Regulations

(1)

New provisions

Such rules and regulations as are required by this section or are otherwise necessary to carry out this section, including the application form required under subsection (a)—

(A)

shall be issued by the Commission, not later than 180 days after the date of enactment of this section; and

(B)

shall become effective not later than 1 year after the date of enactment of this section.

(2)

Review of existing regulations

Not later than 270 days after the date of enactment of this section, the Commission shall—

(A)

review its existing rules and regulations which affect the operations of proxy advisory firms;

(B)

amend or revise such rules and regulations in accordance with the purposes of this section, and issue such guidance, as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors; and

(C)

direct Commission staff to withdraw the Egan Jones Proxy Services (May 27, 2004) and Institutional Shareholder Services, Inc. (September 15, 2004) no-action letters.

(o)

Applicability

This section, other than subsection (n), which shall apply on the date of enactment of this section, shall apply on the earlier of—

(1)

the date on which regulations are issued in final form under subsection (n)(1); or

(2)

270 days after the date of enactment of this section.

.

(b)

Conforming amendment

Section 17(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78q(a)(1)) is amended by inserting proxy advisory firm, after nationally recognized statistical rating organization,.

483.

Commission annual report

The Commission shall make an annual report publicly available on the Commission’s Internet website. Such report shall, with respect to the year to which the report relates—

(1)

identify applicants for registration under section 15H of the Securities Exchange Act of 1934, as added by this subtitle;

(2)

specify the number of and actions taken on such applications;

(3)

specify the views of the Commission on the state of competition, transparency, policies and methodologies, and conflicts of interest among proxy advisory firms;

(4)

include the determination of the Commission with regard to—

(A)

the quality of proxy advisory services issued by proxy advisory firms;

(B)

the financial markets;

(C)

competition among proxy advisory firms;

(D)

the incidence of undisclosed conflicts of interest by proxy advisory firms;

(E)

the process for registering as a proxy advisory firm; and

(F)

such other matters relevant to the implementation of this subtitle and the amendments made by this subtitle, as the Commission determines necessary to bring to the attention of the Congress;

(5)

identify problems, if any, that have resulted from the implementation of this subtitle and the amendments made by this subtitle; and

(6)

recommend solutions, including any legislative or regulatory solutions, to any problems identified under paragraphs (4) and (5).

R

Senior Safe

491.

Immunity

(a)

Definitions

In this subtitle—

(1)

the term Bank Secrecy Act Officer means an individual responsible for ensuring compliance with the requirements mandated by subchapter II of chapter 53 of title 31, United States Code;

(2)

the term broker-dealer means a broker or dealer, as those terms are defined, respectively, in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a));

(3)

the term covered agency means—

(A)

a State financial regulatory agency, including a State securities or law enforcement authority and a State insurance regulator;

(B)

each of the Federal financial institutions regulatory agencies;

(C)

the Securities and Exchange Commission;

(D)

a law enforcement agency;

(E)

and State or local agency responsible for administering adult protective service laws; and

(F)

a State attorney general.

(4)

the term covered financial institution means—

(A)

a credit union;

(B)

a depository institution;

(C)

an investment advisor;

(D)

a broker-dealer;

(E)

an insurance company;

(F)

a State attorney general; and

(G)

a transfer agent.

(5)

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

(6)

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

(7)

the term exploitation means the fraudulent or otherwise illegal, unauthorized, or improper act or process of an individual, including a caregiver or fiduciary, that—

(A)

uses the resources of a senior citizen for monetary personal benefit, profit, or gain; or

(B)

results in depriving a senior citizen of rightful access to or use of benefits, resources, belongings or assets;

(8)

the term Federal financial institutions regulatory agencies has the meaning given the term in section 1003 of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3302);

(9)

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

(10)

the term insurance company has the meaning given the term in section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a));

(11)

the term registered representative means an individual who represents a broker-dealer in effecting or attempting to affect a purchase or sale of securities;

(12)

the term senior citizen means an individual who is not less than 65 years of age;

(13)

the term State insurance regulator has the meaning given such term in section 315 of the Gramm-Leach-Bliley Act (15 U.S.C. 6735);

(14)

the term State securities or law enforcement authority has the meaning given the term in section 24(f)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78x(f)(4)); and

(15)

the term transfer agent has the meaning given the term in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).

(b)

Immunity from suit

(1)

Immunity for individuals

An individual who has received the training described in section 492 shall not be liable, including in any civil or administrative proceeding, for disclosing the possible exploitation of a senior citizen to a covered agency if the individual, at the time of the disclosure—

(A)

served as a supervisor, compliance officer (including a Bank Secrecy Act Officer), or registered representative for a covered financial institution; and

(B)

made the disclosure with reasonable care including reasonable efforts to avoid disclosure other than to a covered agency.

(2)

Immunity for covered financial institutions

A covered financial institution shall not be liable, including in any civil or administrative proceeding, for a disclosure made by an individual described in paragraph (1) if—

(A)

the individual was employed by, or, in the case of a registered representative, affiliated or associated with, the covered financial institution at the time of the disclosure; and

(B)

before the time of the disclosure, the covered financial institution provided the training described in section 492 to each individual described in section 492(a).

492.

Training required

(a)

In general

A covered financial institution may provide training described in subsection (b)(1) to each officer or employee of, or registered representative affiliated or associated with, the covered financial institution who—

(1)

is described in section 491(b)(1)(A);

(2)

may come into contact with a senior citizen as a regular part of the duties of the officer, employee, or registered representative; or

(3)

may review or approve the financial documents, records, or transactions of a senior citizen in connection with providing financial services to a senior citizen.

(b)

Training

(1)

In general

The training described in this paragraph shall—

(A)

instruct any individual attending the training on how to identify and report the suspected exploitation of a senior citizen;

(B)

discuss the need to protect the privacy and respect the integrity of each individual customer of a covered financial institution; and

(C)

be appropriate to the job responsibilities of the individual attending the training.

(2)

Timing

The training required under subsection (a) shall be provided as soon as reasonably practicable but not later than 1 year after the date on which an officer, employee, or registered representative begins employment with or becomes affiliated or associated with the covered financial institution.

(3)

Bank Secrecy Act Officer

An individual who is designated as a compliance officer under an anti-money laundering program established pursuant to section 5318(h) of title 31, United States Code, shall be deemed to have received the training described under this subsection.

493.

Relationship to State law

Nothing in this Act shall be construed to preempt or limit any provision of State law, except only to the extent that section 491 provides a greater level of protection against liability to an individual described in section 491(b)(1) or to a covered financial institution described in section 491(b)(2) than is provided under State law.

S

National Securities Exchange Regulatory Parity

496.

Application of exemption

Section 18(b)(1) of the Securities Act of 1933 (15 U.S.C. 77r(b)(1)), as amended by section 456(b), is further amended—

(1)

by striking subparagraph (A);

(2)

in subparagraph (B), by striking that the Commission determines by rule (on its own initiative or on the basis of a petition) are substantially similar to the listing standards applicable to securities described in subparagraph (A) and inserting that have been approved by the Commission;

(3)

in subparagraph (C), by striking or (B); and

(4)

by redesignating subparagraphs (B), (C), and (D) as subparagraphs (A), (B), and (C), respectively.

T

Private Company Flexibility and Growth

497.

Shareholder threshold for registration

The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended—

(1)

in section 12(g)—

(A)

in paragraph (1)—

(i)

by striking shall— and all that follows through register such security and inserting shall, not later than 120 days after the last day of its first fiscal year ended after the effective date of this subsection on which the issuer has total assets exceeding $10,000,000 (or such greater amount of assets as the Commission may establish by rule) and a class of equity security (other than an exempted security) held of record by 2,000 or more persons (or such greater number of persons as the Commission may establish by rule), register such security; and

(ii)

by adding at the end the following: The dollar figure in this paragraph shall be indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, rounded to the nearest $100,000.; and

(B)

in paragraph (4), by striking 300 persons and all that follows through 1,200 persons persons and inserting 1,200 persons; and

(2)

in section 15(d)(1), by striking 300 persons and all that follows through 1,200 persons persons and inserting 1,200 persons.

U

Small Company Capital Formation Enhancements

498.

JOBS Act-related exemption

Section 3(b) of the Securities Act of 1933 (15 U.S.C. 77c(b)) is amended—

(1)

in paragraph (2)(A), by striking $50,000,000 and inserting $75,000,000, adjusted for inflation by the Commission every 2 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; and

(2)

in paragraph (5)—

(A)

by striking such amount as and inserting: such amount, in addition to the adjustment for inflation provided for under such paragraph (2)(A), as; and

(B)

by striking such amount, it and inserting such amount, in addition to the adjustment for inflation provided for under such paragraph (2)(A), it.

V

Encouraging Public Offerings

499.

Expanding testing the waters and confidential submissions

The Securities Act of 1933 (15 U.S.C. 77a et seq.) is amended—

(1)

in section 5(d), by striking an emerging growth company or any person authorized to act on behalf of an emerging growth company and inserting an issuer or any person authorized to act on behalf of an issuer; and

(2)

in section 6(e)—

(A)

in the heading, by striking Emerging growth companies and inserting Draft registration statements; and

(B)

by amending paragraph (1) to read as follows:

(1)

In general

Any issuer, prior to its initial public offering date, may confidentially submit to the Commission a draft registration statement, for confidential nonpublic review by the staff of the Commission prior to public filing, provided that the initial confidential submission and all amendments thereto shall be publicly filed with the Commission not later than 15 days before the date on which the issuer conducts a road show, as such term is defined in section 230.433(h)(4) of title 17, Code of Federal Regulations, or any successor thereto.

.

X

Modernized Offering and Proxy Rules for Closed-End Funds

499A.

Parity for closed-end companies regarding offering and proxy rules

(a)

Revision to rules

Not later than 1 year after the date of enactment of this Act, the Securities and Exchange Commission shall revise any rules to the extent necessary to allow any closed-end company, as defined in section 5(a)(2) of the Investment Company Act of 1940 (15 U.S.C. 80a-5), that is registered as an investment company under such Act to use the securities offering and proxy rules that are available to other issuers that are required to file reports under section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m; 78o(d)). Any action that the Commission takes pursuant to this subsection shall include the following:

(1)

The Commission shall revise section 230.405 of title 17, Code of Federal Regulations, to—

(A)

remove the exclusion of a registered closed-end company from the definition of a well-known seasoned issuer provided by that section; and

(B)

add registration statements filed on Form N–2 to the definition of automatic shelf registration statement provided by that section.

(2)

The Commission shall revise sections 230.168 and 230.169 of title 17, Code of Federal Regulations, to remove the exclusion of a registered closed-end company from the list of issuers that can use the exemptions provided by those sections.

(3)

The Commission shall revise sections 230.163 and 230.163A of title 17, Code of Federal Regulations, to remove a registered closed-end company from the list of issuers that are ineligible to use the exemptions provided by those sections.

(4)

The Commission shall revise section 230.134 of title 17, Code of Federal Regulations, to remove the exclusion of a registered closed-end company from that section.

(5)

The Commission shall revise sections 230.138 and 230.139 of title 17, Code of Federal Regulations, to specifically include any registered closed-end company as an issuer to which those sections apply.

(6)

The Commission shall revise section 230.164 of title 17, Code of Federal Regulations, to remove a registered closed-end company from the list of issuers that are excluded from that section.

(7)

The Commission shall revise section 230.433, of title 17, Code of Federal Regulations, to specifically include any registered closed-end company that is a well-known seasoned issuer as an issuer to which that section applies.

(8)

The Commission shall revise section 230.415 of title 17, Code of Federal Regulations, to—

(A)

state that the registration for securities provided by that section includes securities registered by any registered closed-end company on Form N–2; and

(B)

eliminate the requirement that a Form N–2 registrant must furnish the undertakings required by item 34.4 of Form N–2.

(9)

The Commission shall revise section 230.497 of title 17, Code of Federal Regulations, to include a process for any registered closed-end company to file a form of prospectus that is parallel to the process for filing a form of prospectus under section 230.424(b) of such title.

(10)

The Commission shall revise sections 230.172 and 230.173 of title 17, Code of Federal Regulations, to remove the exclusion of an offering of any registered closed-end company from those sections.

(11)

The Commission shall revise section 230.418 of title 17, Code of Federal Regulations, to provide that any registered closed-end company that would otherwise meet the eligibility requirements of General Instruction I.A of Form S–3 shall be exempt from paragraph (a)(3) of that section.

(12)

The Commission shall revise section 240.14a–101 of title 17, Code of Federal Regulations, to provide that any registered closed-end company that would otherwise meet the requirements of General Instruction I.A of Form S–3 shall be deemed to meet the requirements of Form S–3 for purposes of Schedule 14A.

(13)

The Commission shall revise section 243.103 of title 17, Code of Federal Regulations, to provide that paragraph (a) of that section applies for purposes of Form N–2.

(b)

Revisions to Form N–2

Not later than 1 year after the date of enactment of this Act, the Commission shall revise Form N–2 to—

(1)

include an item or instruction that is similar to item 12 on Form S–3 to provide that any registered closed-end company that would otherwise meet the requirements of Form S–3 shall incorporate by reference its reports and documents filed under the Securities Exchange Act of 1934 into its registration statement filed on Form N–2; and

(2)

include an item or instruction that is similar to the instruction regarding automatic shelf offerings by well-known seasoned issuers on Form S–3 to provide that any registered closed-end company that is a well-known seasoned issuer may file automatic shelf offerings on Form N–2.

(c)

Treatment if revisions not completed in a timely manner

If the Commission fails to complete the revisions required by subsections (a) and (b) by the time required by such subsections, any registered closed-end company shall be entitled to treat such revisions as having been completed in accordance with the actions required to be taken by the Commission by such subsections until such time as such revisions are completed by the Commission.

(d)

Rules of construction

(1)

No effect on Rule 482

(1) Nothing in this section or the amendments made by this section shall be construed to impair or limit in any way a registered closed-end company from using section 230.482 of title 17, Code of Federal Regulations, to distribute sales material.

(2)

References

Any reference in this section to a section of title 17, Code of Federal Regulations, or to any form or schedule means such rule, section, form, or schedule, or any successor to any such rule, section, form, or schedule.

V

Regulatory Relief for Main Street and Community Financial Institutions

A

Preserving Access to Manufactured Housing

501.

Mortgage originator definition

Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is amended—

(1)

by redesignating the second subsection (cc) and subsection (dd) as subsections (dd) and (ee), respectively; and

(2)

in paragraph (2)(C) of subsection (dd), as so redesignated, by striking an employee of a retailer of manufactured homes who is not described in clause (i) or (iii) of subparagraph (A) and who does not advise a consumer on loan terms (including rates, fees, and other costs) and inserting a retailer of manufactured or modular homes or its employees unless such retailer or its employees receive compensation or gain for engaging in activities described in subparagraph (A) that is in excess of any compensation or gain received in a comparable cash transaction.

502.

High-Cost mortgage definition

Section 103 of the Truth in Lending Act (15 U.S.C. 1602), as amended by section 501, is further amended—

(1)

by redesignating subsection (aa) (relating to disclosure of greater amount or percentage), as so designated by section 1100A of the Consumer Financial Protection Act of 2010, as subsection (bb);

(2)

by redesignating subsection (bb) (relating to high cost mortgages), as so designated by section 1100A of the Consumer Financial Protection Act of 2010, as subsection (aa), and moving such subsection to immediately follow subsection (z); and

(3)

in subsection (aa)(1)(A), as so redesignated—

(A)

in clause (i)(I), by striking (8.5 percentage points, if the dwelling is personal property and the transaction is for less than $50,000) and inserting (10 percentage points if the dwelling is personal property or is a transaction that does not include the purchase of real property on which a dwelling is to be placed, and the transaction is for less than $75,000 (as such amount is adjusted by the Consumer Law Enforcement Agency to reflect the change in the Consumer Price Index)); and

(B)

in clause (ii)—

(i)

in subclause (I), by striking or at the end; and

(ii)

by adding at the end the following:

(III)

in the case of a transaction for less than $75,000 (as such amount is adjusted by the Consumer Law Enforcement Agency to reflect the change in the Consumer Price Index) in which the dwelling is personal property (or is a consumer credit transaction that does not include the purchase of real property on which a dwelling is to be placed) the greater of 5 percent of the total transaction amount or $3,000 (as such amount is adjusted by the Consumer Law Enforcement Agency to reflect the change in the Consumer Price Index); or

.

B

Mortgage Choice

506.

Definition of points and fees

(a)

Amendment to section 103 of TILA

Paragraph (4) of section 103(aa) of the Truth in Lending Act, as redesignated by section 502, is amended—

(1)

by striking paragraph (1)(B) and inserting paragraph (1)(A) and section 129C;

(2)

in subparagraph (C)—

(A)

by inserting and insurance after taxes;

(B)

in clause (ii), by inserting , except as retained by a creditor or its affiliate as a result of their participation in an affiliated business arrangement (as defined in section 3(7) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602(7)), after compensation; and

(C)

by striking clause (iii) and inserting the following:

(iii)

the charge is—

(I)

a bona fide third-party charge not retained by the mortgage originator, creditor, or an affiliate of the creditor or mortgage originator; or

(II)

a charge set forth in section 106(e)(1);

; and

(3)

in subparagraph (D)—

(A)

by striking accident,; and

(B)

by striking or any payments and inserting and any payments.

(b)

Amendment to section 129C of TILA

Section 129C of the Truth in Lending Act (15 U.S.C. 1639c) is amended—

(1)

in subsection (a)(5)(C), by striking 103 and all that follows through or mortgage originator and inserting 103(aa)(4); and

(2)

in subsection (b)(2)(C)(i), by striking 103 and all that follows through or mortgage originator) and inserting 103(aa)(4).

C

Financial Institution Customer Protection

511.

Requirements for deposit account termination requests and orders

(a)

Termination requests or orders must be material

(1)

In general

An appropriate Federal banking agency may not formally or informally request or order a depository institution to terminate a specific customer account or group of customer accounts or to otherwise restrict or discourage a depository institution from entering into or maintaining a banking relationship with a specific customer or group of customers unless—

(A)

the agency has a material reason for such request or order; and

(B)

such reason is not based solely on reputation risk.

(2)

Treatment of national security threats

If an appropriate Federal banking agency believes a specific customer or group of customers is, or is acting as a conduit for, an entity which—

(A)

poses a threat to national security;

(B)

is involved in terrorist financing;

(C)

is an agency of the government of Iran, North Korea, Syria, or any country listed from time to time on the State Sponsors of Terrorism list;

(D)

is located in, or is subject to the jurisdiction of, any country specified in subparagraph (C); or

(E)

does business with any entity described in subparagraph (C) or (D), unless the appropriate Federal banking agency determines that the customer or group of customers has used due diligence to avoid doing business with any entity described in subparagraph (C) or (D),

such belief shall satisfy the requirement under paragraph (1).
(b)

Notice requirement

(1)

In general

If an appropriate Federal banking agency formally or informally requests or orders a depository institution to terminate a specific customer account or a group of customer accounts, the agency shall—

(A)

provide such request or order to the institution in writing; and

(B)

accompany such request or order with a written justification for why such termination is needed, including any specific laws or regulations the agency believes are being violated by the customer or group of customers, if any.

(2)

Justification requirement

A justification described under paragraph (1)(B) may not be based solely on the reputation risk to the depository institution.

(c)

Customer notice

(1)

Notice required

Except as provided under paragraph (2), if an appropriate Federal banking agency orders a depository institution to terminate a specific customer account or a group of customer accounts, the depository institution shall inform the customer or customers of the justification for the customer’s account termination described under subsection (b).

(2)

Notice prohibited in cases of national security

If an appropriate Federal banking agency requests or orders a depository institution to terminate a specific customer account or a group of customer accounts based on a belief that the customer or customers pose a threat to national security, or are otherwise described under subsection (a)(2), neither the depository institution nor the appropriate Federal banking agency may inform the customer or customers of the justification for the customer’s account termination.

(d)

Reporting requirement

Each appropriate Federal banking agency shall issue an annual report to the Congress stating—

(1)

the aggregate number of specific customer accounts that the agency requested or ordered a depository institution to terminate during the previous year; and

(2)

the legal authority on which the agency relied in making such requests and orders and the frequency on which the agency relied on each such authority.

(e)

Definitions

For purposes of this section:

(1)

Appropriate Federal banking agency

The term appropriate Federal banking agency means—

(A)

the appropriate Federal banking agency, as defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); and

(B)

the National Credit Union Administration, in the case of an insured credit union.

(2)

Depository institution

The term depository institution means—

(A)

a depository institution, as defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); and

(B)

an insured credit union.

512.

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

Section 951 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833a) is amended—

(1)

in subsection (c)(2), by striking affecting a federally insured financial institution and inserting against a federally insured financial institution or by a federally insured financial institution against an unaffiliated third person; and

(2)

in subsection (g)—

(A)

in the heading, by striking subpoenas and inserting investigations; and

(B)

by amending paragraph (1)(C) to read as follows:

(C)

summon witnesses and require the production of any books, papers, correspondence, memoranda, or other records which the Attorney General deems relevant or material to the inquiry, if the Attorney General—

(i)

requests a court order from a court of competent jurisdiction for such actions and offers specific and articulable facts showing that there are reasonable grounds to believe that the information or testimony sought is relevant and material for conducting an investigation under this section; or

(ii)

either personally or through delegation no lower than the Deputy Attorney General, issues and signs a subpoena for such actions and such subpoena is supported by specific and articulable facts showing that there are reasonable grounds to believe that the information or testimony sought is relevant for conducting an investigation under this section.

.

D

Portfolio Lending and Mortgage Access

516.

Safe harbor for certain loans held on portfolio

(a)

In general

Section 129C of the Truth in Lending Act (15 U.S.C. 1639c) is amended by adding at the end the following:

(j)

Safe harbor for certain loans held on portfolio

(1)

Safe harbor for creditors that are depository institutions

(A)

In general

A creditor that is a depository institution shall not be subject to suit for failure to comply with subsection (a), (c)(1), or (f)(2) of this section or section 129H with respect to a residential mortgage loan, and the banking regulators shall treat such loan as a qualified mortgage, if—

(i)

the creditor has, since the origination of the loan, held the loan on the balance sheet of the creditor; and

(ii)

all prepayment penalties with respect to the loan comply with the limitations described under subsection (c)(3).

(B)

Exception for certain transfers

In the case of a depository institution that transfers a loan originated by that institution to another depository institution by reason of the bankruptcy or failure of the originating depository institution or the purchase of the originating depository institution, the depository institution transferring such loan shall be deemed to have complied with the requirement under subparagraph (A)(i).

(2)

Safe harbor for mortgage originators

A mortgage originator shall not be subject to suit for a violation of section 129B(c)(3)(B) for steering a consumer to a residential mortgage loan if—

(A)

the creditor of such loan is a depository institution and has informed the mortgage originator that the creditor intends to hold the loan on the balance sheet of the creditor for the life of the loan; and

(B)

the mortgage originator informs the consumer that the creditor intends to hold the loan on the balance sheet of the creditor for the life of the loan.

(3)

Definitions

For purposes of this subsection:

(A)

Banking regulators

The term banking regulators means the Federal banking agencies, the Consumer Law Enforcement Agency, and the National Credit Union Administration.

(B)

Depository institution

The term depository institution has the meaning given that term under section 19(b)(1) of the Federal Reserve Act (12 U.S.C. 505(b)(1)).

(C)

Federal banking agencies

The term Federal banking agencies has the meaning given that term under section 3 of the Federal Deposit Insurance Act.

.

(b)

Rule of construction

Nothing in the amendment made by this section may be construed as preventing a balloon loan from qualifying for the safe harbor provided under section 129C(j) of the Truth in Lending Act if the balloon loan otherwise meets all of the requirements under such subsection (j), regardless of whether the balloon loan meets the requirements described under clauses (i) through (iv) of section 129C(b)(2)(E) of such Act.

E

Application of the Expedited Funds Availability Act

521.

Application of the Expedited Funds Availability Act

(a)

In general

The Expedited Funds Availability Act (12 U.S.C. 4001 et seq.) is amended—

(1)

in section 602(20) (12 U.S.C. 4001(20)) by inserting , located in the United States, after ATM;

(2)

in section 602(21) (12 U.S.C. 4001(21)) by inserting American Samoa, the Commonwealth of the Northern Mariana Islands, after Puerto Rico,;

(3)

in section 602(23) (12 U.S.C. 4001(23)) by inserting American Samoa, the Commonwealth of the Northern Mariana Islands, after Puerto Rico,; and

(4)

in section 603(d)(2)(A) (12 U.S.C. 4002(d)(2)(A)), by inserting American Samoa, the Commonwealth of the Northern Mariana Islands, after Puerto Rico,.

(b)

Effective date

This section shall take effect on January 1, 2017.

F

Small Bank Holding Company Policy Statement

526.

Changes required to small bank holding company policy statement on assessment of financial and managerial factors

(a)

In general

Before the end of the 6-month period beginning on the date of the enactment of this Act, the Board of Governors of the Federal Reserve System shall revise the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors (12 CFR part 225—appendix C) to raise the consolidated asset threshold under such policy statement from $1,000,000,000 (as adjusted by Public Law 113–250) to $10,000,000,000.

(b)

Conforming amendment

Subparagraph (C) of section 171(b)(5) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5371(b)(5)) is amended to read as follows:

(C)

any bank holding company or savings and loan holding company that is subject to the application of the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors of the Board of Governors (12 CFR part 225—appendix C).

.

G

Community Institution Mortgage Relief

531.

Community financial institution mortgage relief

(a)

Exemption from escrow requirements for loans held by smaller creditors

Section 129D of the Truth in Lending Act (15 U.S.C. 1639d) is amended—

(1)

by adding at the end the following:

(k)

Safe harbor for loans held by smaller creditors

(1)

In general

A creditor shall not be in violation of subsection (a) with respect to a loan if—

(A)

the creditor has consolidated assets of $10,000,000,000 or less; and

(B)

the creditor holds the loan on the balance sheet of the creditor for the 3-year period beginning on the date of the origination of the loan.

(2)

Exception for certain transfers

In the case of a creditor that transfers a loan to another person by reason of the bankruptcy or failure of the creditor, the purchase of the creditor, or a supervisory act or recommendation from a State or Federal regulator, the creditor shall be deemed to have complied with the requirement under paragraph (1)(B).

; and

(2)

by striking the term Board each place such term appears and inserting Consumer Law Enforcement Agency.

(b)

Modification to exemption for small servicers of mortgage loans

Section 6 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605) is amended by adding at the end the following:

(n)

Small Servicer Exemption

The Consumer Law Enforcement Agency shall, by regulation, provide exemptions to, or adjustments for, the provisions of this section for a servicer that annually services 20,000 or fewer mortgage loans, in order to reduce regulatory burdens while appropriately balancing consumer protections.

.

H

Financial Institutions Examination Fairness and Reform

536.

Timeliness of examination reports

(a)

In general

The Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3301 et seq.) is amended by adding at the end the following:

1012.

Timeliness of examination reports

(a)

In general

(1)

Final examination report

A Federal financial institutions regulatory agency shall provide a final examination report to a financial institution not later than 60 days after the later of—

(A)

the exit interview for an examination of the institution; or

(B)

the provision of additional information by the institution relating to the examination.

(2)

Exit interview

If a financial institution is not subject to a resident examiner program, the exit interview shall occur not later than the end of the 9-month period beginning on the commencement of the examination, except that such period may be extended by the Federal financial institutions regulatory agency by providing written notice to the institution and the Independent Examination Review Director describing with particularity the reasons that a longer period is needed to complete the examination.

(b)

Examination materials

Upon the request of a financial institution, the Federal financial institutions regulatory agency shall include with the final report an appendix listing all examination or other factual information relied upon by the agency in support of a material supervisory determination.

1013.

Examination standards

(a)

In general

In the examination of a financial institution—

(1)

a commercial loan shall not be placed in non-accrual status solely because the collateral for such loan has deteriorated in value;

(2)

a modified or restructured commercial loan shall be removed from non-accrual status if the borrower demonstrates the ability to perform on such loan over a maximum period of 6 months, except that with respect to loans on a quarterly, semiannual, or longer repayment schedule such period shall be a maximum of 3 consecutive repayment periods;

(3)

a new appraisal on a performing commercial loan shall not be required unless an advance of new funds is involved; and

(4)

in classifying a commercial loan in which there has been deterioration in collateral value, the amount to be classified shall be the portion of the deficiency relating to the decline in collateral value and repayment capacity of the borrower.

(b)

Well capitalized institutions

The Federal financial institutions regulatory agencies may not require a financial institution that is well capitalized to raise additional capital in lieu of an action prohibited under subsection (a).

(c)

Consistent loan classifications

The Federal financial institutions regulatory agencies shall develop and apply identical definitions and reporting requirements for non-accrual loans.

1014.

Office of Independent Examination Review

(a)

Establishment

There is established in the Council an Office of Independent Examination Review (the Office).

(b)

Head of Office

There is established the position of the Independent Examination Review Director (the Director), as the head of the Office. The Director shall be appointed by the Secretary of the Treasury and shall be independent from any member agency of the Council.

(c)

Staffing

The Director is authorized to hire staff to support the activities of the Office.

(d)

Duties

The Director shall—

(1)

receive and, at the Director’s discretion, investigate complaints from financial institutions, their representatives, or another entity acting on behalf of such institutions, concerning examinations, examination practices, or examination reports;

(2)

hold meetings, at least once every three months and in locations designed to encourage participation from all sections of the United States, with financial institutions, their representatives, or another entity acting on behalf of such institutions, to discuss examination procedures, examination practices, or examination policies;

(3)

review examination procedures of the Federal financial institutions regulatory agencies to ensure that the written examination policies of those agencies are being followed in practice and adhere to the standards for consistency established by the Council;

(4)

conduct a continuing and regular review of examination quality assurance for all examination types conducted by the Federal financial institutions regulatory agencies;

(5)

adjudicate any supervisory appeal initiated under section 1015; and

(6)

report annually to the Committee on Financial Services of the House of Representatives, the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Council, on the reviews carried out pursuant to paragraphs (3) and (4), including compliance with the requirements set forth in section 1012 regarding timeliness of examination reports, and the Council’s recommendations for improvements in examination procedures, practices, and policies.

(e)

Confidentiality

The Director shall keep confidential all meetings with, discussions with, and information provided by financial institutions.

1015.

Right to independent review of material supervisory determinations

(a)

In general

A financial institution shall have the right to obtain an independent review of a material supervisory determination contained in a final report of examination.

(b)

Notice

(1)

Timing

A financial institution seeking review of a material supervisory determination under this section shall file a written notice with the Independent Examination Review Director (the Director) within 60 days after receiving the final report of examination that is the subject of such review.

(2)

Identification of determination

The written notice shall identify the material supervisory determination that is the subject of the independent examination review, and a statement of the reasons why the institution believes that the determination is incorrect or should otherwise be modified.

(3)

Information to be provided to institution

Any information relied upon by the agency in the final report that is not in the possession of the financial institution may be requested by the financial institution and shall be delivered promptly by the agency to the financial institution.

(c)

Right to hearing

(1)

In general

The Director shall determine the merits of the appeal on the record or, at the financial institution’s election, shall refer the appeal to an Administrative Law Judge to conduct a confidential hearing pursuant to the procedures set forth under sections 556 and 557 of title 5, United States Code, which hearing shall take place not later than 60 days after the petition for review was received by the Director, and to issue a proposed decision to the Director based upon the record established at such hearing.

(2)

Standard of review

In rendering a determination or recommendation under this subsection, neither the Administrative Law Judge nor the Director shall defer to the opinions of the examiner or agency, but shall conduct a de novo review to independently determine the appropriateness of the agency’s decision based upon the relevant statutes, regulations, and other appropriate guidance, as well as evidence adduced at any hearing.

(d)

Final decision

A decision by the Director on an independent review under this section shall—

(1)

be made not later than 60 days after the record has been closed; and

(2)

be deemed final agency action and shall bind the agency whose supervisory determination was the subject of the review and the financial institution requesting the review.

(e)

Right to judicial review

A financial institution shall have the right to petition for review of final agency action under this section by filing a Petition for Review within 60 days of the Director’s decision in the United States Court of Appeals for the District of Columbia Circuit or the Circuit in which the financial institution is located.

(f)

Report

The Director shall report annually to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on actions taken under this section, including the types of issues that the Director has reviewed and the results of those reviews. In no case shall such a report contain information about individual financial institutions or any confidential or privileged information shared by financial institutions.

(g)

Retaliation prohibited

A Federal financial institutions regulatory agency may not—

(1)

retaliate against a financial institution, including service providers, or any institution-affiliated party (as defined under section 3 of the Federal Deposit Insurance Act), for exercising appellate rights under this section; or

(2)

delay or deny any agency action that would benefit a financial institution or any institution-affiliated party on the basis that an appeal under this section is pending under this section.

(h)

Rule of construction

Nothing in this section may be construed—

(1)

to affect the right of a Federal financial institutions regulatory agency to take enforcement or other supervisory actions related to a material supervisory determination under review under this section; or

(2)

to prohibit the review under this section of a material supervisory determination with respect to which there is an ongoing enforcement or other supervisory action.

.

(b)

Additional amendments

(1)

Riegle Community Development and Regulatory Improvement Act of 1994

Section 309 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4806) is amended—

(A)

in subsection (a), by inserting after appropriate Federal banking agency the following: , the Consumer Law Enforcement Agency,;

(B)

in subsection (b)—

(i)

in paragraph (2), by striking the appellant from retaliation by agency examiners and inserting the insured depository institution or insured credit union from retaliation by the agencies referred to in subsection (a); and

(ii)

by adding at the end the following flush-left text:

For purposes of this subsection and subsection (e), retaliation includes delaying consideration of, or withholding approval of, any request, notice, or application that otherwise would have been approved, but for the exercise of the institution’s or credit union’s rights under this section.

;

(C)

in subsection (e)(2)—

(i)

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

(ii)

in subparagraph (C), by striking the period and inserting ; and; and

(iii)

by adding at the end the following:

(D)

ensure that appropriate safeguards exist for protecting the insured depository institution or insured credit union from retaliation by any agency referred to in subsection (a) for exercising its rights under this subsection.

; and

(D)

in subsection (f)(1)(A)—

(i)

in clause (ii), by striking and at the end;

(ii)

in clause (iii), by striking and at the end; and

(iii)

by adding at the end the following:

(iv)

any issue specifically listed in an exam report as a matter requiring attention by the institution’s management or board of directors; and

(v)

any suspension or removal of an institution’s status as eligible for expedited processing of applications, requests, notices, or filings on the grounds of a supervisory or compliance concern, regardless of whether that concern has been cited as a basis for another material supervisory determination or matter requiring attention in an examination report, provided that the conduct at issue did not involve violation of any criminal law; and

.

(2)

Federal Credit Union Act

Section 205(j) of the Federal Credit Union Act (12 U.S.C. 1785(j)) is amended by inserting the Consumer Law Enforcement Agency, before the Administration each place such term appears.

(3)

Federal Financial Institutions Examination Council Act of 1978

The Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3301 et seq.) is amended—

(A)

in section 1003, by amending paragraph (1) to read as follows:

(1)

the term Federal financial institutions regulatory agencies

(A)

means the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the National Credit Union Administration; and

(B)

for purposes of sections 1012, 1013, 1014, and 1015, includes the Consumer Law Enforcement Agency;

; and

(B)

in section 1005, by striking One-fifth and inserting One-fourth.

I

National Credit Union Administration Budget Transparency

541.

Budget transparency for the NCUA

Section 209(b) of the Federal Credit Union Act (12 U.S.C. 1789) is amended—

(1)

by redesignating paragraphs (1) and (2) as paragraphs (2) and (3), respectively;

(2)

by inserting before paragraph (2), as so redesignated, the following:

(1)

on an annual basis and prior to the submission of the detailed business-type budget required under paragraph (2)—

(A)

make publicly available and cause to be printed in the Federal Register a draft of such detailed business-type budget; and

(B)

hold a public hearing, with public notice provided of such hearing, wherein the public can submit comments on the draft of such detailed business-type budget;

; and

(3)

in paragraph (2), as so redesignated—

(A)

by inserting detailed after submit a; and

(B)

by inserting , and where such budget shall address any comments submitted by the public pursuant to paragraph (1)(B) after Control Act.

J

Taking Account of Institutions with Low Operation Risk

546.

Regulations appropriate to business models

(a)

In general

For any regulatory action occurring after the date of the enactment of this Act, each Federal financial institutions regulatory agency shall—

(1)

take into consideration the risk profile and business models of each type of institution or class of institutions subject to the regulatory action;

(2)

determine the necessity, appropriateness, and impact of applying such regulatory action to such institutions or classes of institutions; and

(3)

tailor such regulatory action in a manner that limits the regulatory compliance impact, cost, liability risk, and other burdens, as appropriate, for the risk profile and business model of the institution or class of institutions involved.

(b)

Other considerations

In carrying out the requirements of subsection (a), each Federal financial institutions regulatory agency shall consider—

(1)

the impact that such regulatory action, both by itself and in conjunction with the aggregate effect of other regulations, has on the ability of the applicable institution or class of institutions to serve evolving and diverse customer needs;

(2)

the potential impact of examination manuals, regulatory actions taken with respect to third-party service providers, or other regulatory directives that may be in conflict or inconsistent with the tailoring of such regulatory action described in subsection (a)(3); and

(3)

the underlying policy objectives of the regulatory action and statutory scheme involved.

(c)

Notice of proposed and final rulemaking

Each Federal financial institutions regulatory agency shall disclose in every notice of proposed rulemaking and in any final rulemaking for a regulatory action how the agency has applied subsections (a) and (b).

(d)

Reports to Congress

(1)

Individual agency reports

(A)

In general

Not later than 1 year after the date of the enactment of this Act and annually thereafter, each Federal financial institutions regulatory agency shall report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on the specific actions taken to tailor the regulatory actions of the agency pursuant to the requirements of this Act.

(B)

Appearance before the Committees

The head of each Federal financial institution regulatory agency shall appear before the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate after each report is made pursuant to subparagraph (A) to testify on the contents of such report.

(2)

FIEC reports

(A)

In general

Not later than 3 months after each report is submitted under paragraph (1), the Financial Institutions Examination Council shall report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on—

(i)

the extent to which regulatory actions tailored pursuant to this Act result in different treatment of similarly situated institutions of diverse charter types; and

(ii)

the reasons for such differential treatment.

(B)

Appearance before the Committees

The Chairman of the Financial Institutions Examination Council shall appear before the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate after each report is made pursuant to subparagraph (A) to testify on the contents of such report.

(e)

Limited look-Back application

(1)

In general

Each Federal financial institutions regulatory agency shall conduct a review of all regulations adopted during the period beginning on the date that is seven years before the date of the introduction of this Act in the House of Representatives and ending on the date of the enactment of this Act, and apply the requirements of this Act to such regulations.

(2)

Revision

If the application of the requirements of this Act to any such regulation requires such regulation to be revised, the applicable Federal financial institutions regulatory agency shall revise such regulation within 3 years of the enactment of this Act.

(f)

Definitions

In this Act, the following definitions shall apply:

(1)

Federal financial institutions regulatory agencies

The term Federal financial institutions regulatory agencies means the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Consumer Law Enforcement Agency.

(2)

Regulatory action

The term regulatory action means any proposed, interim, or final rule or regulation, guidance, or published interpretation.

K

Federal Savings Association Charter Flexibility

551.

Option for Federal savings associations to operate as a covered savings association

The Home Owners’ Loan Act is amended by inserting after section 5 (12 U.S.C. 1464) the following:

5A.

Election to operate as a covered savings association

(a)

Definition

In this section, the term covered savings association means a Federal savings association that makes an election approved under subsection (b).

(b)

Election

(1)

In general

Upon issuance of the rules described in subsection (f), a Federal savings association may elect to operate as a covered savings association by submitting a notice to the Comptroller of such election.

(2)

Approval

A Federal savings association shall be deemed to be approved to operate as a covered savings association on the date that is 60 days after the date on which the Comptroller receives the notice under paragraph (1), unless the Comptroller notifies the Federal savings association otherwise.

(c)

Rights and duties

Notwithstanding any other provision of law and except as otherwise provided in this section, a covered savings association shall—

(1)

have the same rights and privileges as a national bank that has its main office situated in the same location as the home office of the covered savings association; and

(2)

be subject to the same duties, restrictions, penalties, liabilities, conditions, and limitations that would apply to such a national bank.

(d)

Treatment of covered savings associations

A covered savings association shall be treated as a Federal savings association for the purposes—

(1)

of governance of the covered savings association, including incorporation, bylaws, boards of directors, shareholders, and distribution of dividends;

(2)

of consolidation, merger, dissolution, conversion (including conversion to a stock bank or to another charter), conservatorship, and receivership; and

(3)

determined by regulation of the Comptroller.

(e)

Existing branches

A covered savings association may continue to operate any branch or agency the covered savings association operated on the date on which an election under subsection (b) is approved.

(f)

Rulemaking

The Comptroller shall issue rules to carry out this section—

(1)

that establish streamlined standards and procedures that clearly identify required documentation or timelines for an election under subsection (b);

(2)

that require a Federal savings association that makes an election under subsection (b) to identify specific assets and subsidiaries—

(A)

that do not conform to the requirements for assets and subsidiaries of a national bank; and

(B)

that are held by the Federal savings association on the date on which the Federal savings association submits a notice of such election;

(3)

that establish—

(A)

a transition process for bringing such assets and subsidiaries into conformance with the requirements for a national bank; and

(B)

procedures for allowing the Federal savings association to provide a justification for grandfathering such assets and subsidiaries after electing to operate as a covered savings association;

(4)

that establish standards and procedures to allow a covered savings association to terminate an election under subsection (b) after an appropriate period of time or to make a subsequent election;

(5)

that clarify requirements for the treatment of covered savings associations, including the provisions of law that apply to covered savings associations; and

(6)

as the Comptroller deems necessary and in the interests of safety and soundness.

.

L

SAFE Transitional Licensing

556.

Eliminating barriers to jobs for loan originators

(a)

In general

The S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.) is amended by adding at the end the following:

1518.

Employment transition of loan originators

(a)

Temporary authority to originate loans for loan originators moving from a depository institution to a non-depository institution

(1)

In general

Upon employment by a State-licensed mortgage company, an individual who is a registered loan originator shall be deemed to have temporary authority to act as a loan originator in an application State for the period described in paragraph (2) if the individual—

(A)

has not had an application for a loan originator license denied, or had such a license revoked or suspended in any governmental jurisdiction;

(B)

has not been subject to or served with a cease and desist order in any governmental jurisdiction or as described in section 1514(c);

(C)

has not been convicted of a felony that would preclude licensure under the law of the application State;

(D)

has submitted an application to be a State-licensed loan originator in the application State; and

(E)

was registered in the Nationwide Mortgage Licensing System and Registry as a loan originator during the 12-month period preceding the date of submission of the information required under section 1505(a).

(2)

Period

The period described in paragraph (1) shall begin on the date that the individual submits the information required under section 1505(a) and shall end on the earliest of—

(A)

the date that the individual withdraws the application to be a State-licensed loan originator in the application State;

(B)

the date that the application State denies, or issues a notice of intent to deny, the application;

(C)

the date that the application State grants a State license; or

(D)

the date that is 120 days after the date on which the individual submits the application, if the application is listed on the Nationwide Mortgage Licensing System and Registry as incomplete.

(b)

Temporary authority to originate loans for State-licensed loan originators moving interstate