Financial Stability Improvement Act of 2009 - Establishes the Financial Services Oversight Council whose duties include: (1) monitoring the financial services marketplace to identify potential threats to the stability of the U.S. financial system; (2) resolving disputes among federal financial regulatory agencies; (3) subjecting identified financial companies and financial activities to heightened prudential standards in order to promote financial stability and mitigate systemic risk (in this Act referred to as "identified companies or identified activities"); and (4) reporting to Congress on significant financial market developments and potential emerging threats to the stability of the financial system.
Requires the Board of Governors of the Federal Reserve System (Board) to: (1) impose heightened prudential standards upon a identified financial holding company that poses risks to financial stability and the U.S. economy; (2) take prompt corrective action to resolve the problems of such companies; and (3) specify the levels at which an identified financial holding company is well capitalized, undercapitalized, and significantly undercapitalized.
Requires an identified financial holding company that is undercapitalized to submit a capital restoration plan acceptable to the Board.
Directs the Board to take specified actions with respect to significantly undercapitalized identified financial holding companies (including mandatory bankruptcy for critically undercapitalized identified financial companies).
Authorizes the Federal Deposit Insurance Corporation (FDIC) to extend credit (but not equity) to, or guarantee obligations of, solvent companies engaged in financial activities, if necessary to prevent financial instability during times of severe economic distress.
Amends the Home Owners' Loan Act to establish the Division of Thrift Supervision within the Office of the Comptroller of the Currency, to which the functions of the Office of Thrift Supervision (OTS) shall be transferred.
Abolishes the OTS.
Amends the Bank Holding Company Act (BHCA) to: (1) prescribe treatment of dividends by certain mutual holding companies; and (2) establish special purpose holding companies that are not treated as bank holding companies, or are unitary savings and loan holding companies, or are subject to heightened prudential standards.
Subjects transactions between such special purpose holding companies and affiliates to the restrictions and limitations of the Federal Reserve Act.
Amends the Revised Statutes of the United States to require the Comptroller to prescribe rules governing credit exposures arising from any derivative transaction, repurchase agreement, reverse repurchase agreement, securities lending transaction, or securities borrowing transaction.
Amends the National Bank Consolidation and Merger Act to prohibit state and national banks from converting to either state or national status while they are subject to an enforcement action by the Comptroller.
Restricts: (1) lending to insiders; and (2) purchase of assets from insiders.
Payment, Clearing, and Settlement Supervision Act of 2009 - Requires the Council, using prescribed criteria, to consider whether to identify a financial market utility or a payment, clearing, or settlement activity as systemically important.
Directs the Board to prescribe risk management standards for the operations and conduct of identified financial market utilities and identified activities by financial institutions. Requires such entities to comply with those standards.
Prescribes examination and enforcement actions against identified financial market utilities and financial institutions that pose imminent risk of substantial harm.
Credit Risk Retention Act of 2009 - Amends the Securities Act of 1933 to direct the federal banking agencies and the Securities and Exchange Commission (SEC) to jointly prescribe regulations that require: (1) a creditor that makes a loan to retain an economic interest in a material portion of the credit risk that the creditor transfers, sells, or conveys to a third party, including placing such loan in a pool of loans backing an issuance of asset-backed securities; and (2) a securitizer of certain asset-backed securities to retain an economic interest in a material portion of any asset used to back such securities.
Requires the SEC to adopt regulations requiring each issuer of an asset-backed security to disclose: (1) for each tranche or class of security information regarding the assets backing that security; and (2) asset-level or loan-level data necessary for investors to independently perform due diligence.
Directs the SEC to prescribe regulations meeting specified requirements on the use of representations and warranties in the asset-backed securities market.
Repeals the exemption from the Act's jurisdiction for transactions involving offers or sales of promissory notes directly secured by a first lien on real estate with a residential or commercial structure.
Resolution Authority for Large, Interconnected Financial Companies Act of 2009 - Prescribes procedures governing the nature and the extent of actions that the Federal Reserve Board and the appropriate federal regulatory agency may recommend regarding an identified financial holding company whose default would affect economic conditions or financial stability in the United States.
Requires the Secretary to appoint the FDIC as receiver of an identified financial holding company that is in default or in danger of default.
Amends the Federal Reserve Act, with respect to the discount of obligations arising out of actual commercial transactions, to require the Board to authorize a federal reserve bank to make such a discount. (Currently a federal reserve bank may make such a discount on its own inititative.)
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3996 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 3996
To improve financial stability, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 3, 2009
Mr. Frank of Massachusetts introduced the following bill; which was
referred to the Committee on Financial Services, and in addition to the
Committees on the Judiciary, Agriculture, and Ways and Means, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To improve financial stability, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
TITLE I--FINANCIAL STABILITY IMPROVEMENT
SEC. 1000. SHORT TITLE; DEFINITIONS; TABLE OF CONTENTS.
(a) Short Title.--This title may be cited as the ``Financial
Stability Improvement Act of 2009''.
(b) Definitions.--For purposes of this Act, the following
definitions shall apply:
(1) The term ``Board'' means the Board of Governors of the
Federal Reserve System.
(2) The term ``Council'' means the Financial Services
Oversight Council established under section 1001 of this Act.
(3) The term ``Federal financial regulatory agency'' means
any agency that has a voting member of the Council as set forth
in section 1001(b)(1).
(4) The term ``financial company'' means a company or other
entity--
(A) that is--
(i) incorporated or organized under the
laws of the United States or any State,
territory, or possession of the United States,
the District of Columbia, Commonwealth of
Puerto Rico, Commonwealth of Northern Mariana
Islands, Guam, American Samoa, or the United
States Virgin Islands;
(ii) a Federal or State branch or agency of
a foreign bank as such terms are defined in the
International Banking Act of 1978 (12 U.S.C.
3101(b)); or
(iii) a United States affiliate or other
United States operating entity of a company
that is incorporated or organized in a country
other than the United States; and
(B) that is, in whole or in part, directly or
indirectly, engaged in financial activities.
(5) The term ``identified financial holding company'' means
a financial company that the Council has identified for
heightened prudential standards under subtitle B of this Act,
unless such financial company is required to establish an
intermediate holding company under section 6 of the Bank
Holding Company Act, in which case the ``identified financial
holding company'' is such section 6 holding company through
which the financial company is required to conduct its
financial activities.
(6) The term ``primary financial regulatory agency'' means
the following:
(A) The Comptroller of the Currency, with respect
to any national bank, any Federal branch or Federal
agency of a foreign bank, and, after the date on which
the functions of the Office of Thrift Supervision and
the Director of the Office of Thrift Supervision are
transferred under subtitle C, a Federal savings
association.
(B) The Board, with respect to--
(i) a State member bank;
(ii) any bank holding company and any
subsidiary of such company (as such terms are
defined in the Bank Holding Company Act), other
than a subsidiary that is described in any
other subparagraph of this paragraph to the
extent that the subsidiary is engaged in an
activity described in such subparagraph;
(iii) any identified financial holding
company and any subsidiary (as such term is
defined in the Bank Holding Company Act) of
such company, other than a subsidiary that is
described in any other subparagraph of this
paragraph to the extent that the subsidiary is
engaged in an activity described in such
subparagraph;
(iv) after the date on which the functions
of the Office of Thrift Supervision are
transferred under subtitle C, any savings and
loan holding company (as defined in section
10(a)(1)(D) of the Home Owners' Loan Act) and
any subsidiary (as such term is defined in the
Bank Holding Company Act) of a such company,
other than a subsidiary that is described in
any other subparagraph of this paragraph, to
the extent that the subsidiary is engaged in an
activity described in such subparagraph;
(v) any organization organized and operated
under section 25 or 25A of the Federal Reserve
Act (12 U.S.C. 601 et seq. or 611 et seq.); and
(vi) any foreign bank or company that is
treated as a bank holding company under
subsection (a) of section 8 of the
International Banking Act of 1978 applies and
any subsidiary (other than a bank or other
subsidiary that is described in any other
subparagraph of this paragraph) of any such
foreign bank or company.
(C) The Federal Deposit Insurance Corporation, with
respect to a State nonmember bank, any insured State
branch of a foreign bank (as such terms are defined in
section 3 of the Federal Deposit Insurance Act), and,
after the date on which the functions of the Office of
Thrift Supervision are transferred under subtitle C,
any State savings association.
(D) The National Credit Union Administration, with
respect to any insured credit union under the Federal
Credit Union Act (12 U.S.C. 1751 et seq.).
(E) The Securities and Exchange Commission, with
respect to--
(i) any broker or dealer registered with
the Securities and Exchange Commission under
the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.);
(ii) any investment company registered with
the Securities and Exchange Commission under
the Investment Company Act of 1940 (15 U.S.C.
80a-1 et seq.);
(iii) any investment adviser registered
with the Securities and Exchange Commission
under the Investment Advisers Act of 1940 (15
U.S.C. 80b-1 et seq.) with respect to the
investment advisory activities of such company
and activities incidental to such advisory
activities; and
(iv) any clearing agency registered with
the Securities and Exchange Commission under
the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.).
(F) The Commodity Futures Trading Commission, with
respect to--
(i) any futures commission merchant, any
commodity trading adviser, and any commodity
pool operator registered with the Commodity
Futures Trading Commission under the Commodity
Exchange Act (7 U.S.C. 1 et seq.) with respect
to the commodities activities of such entity
and activities incidental to such commodities
activities; and [Text missing?]
(G) The Federal Housing Finance Agency with respect
to the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation, and the Federal
home loan banks.
(H) The State insurance authority of the State in
which an insurance company is domiciled, with respect
to the insurance activities and activities incidental
to such insurance activities of an insurance company
that is subject to supervision by the State insurance
authority under State insurance law.
(I) The Office of Thrift Supervision, with respect
to any Federal savings association, State savings
association, or savings and loan holding company, until
the date on which the functions of the Office of Thrift
Supervision are transferred under subtitle C.
(7) Terms defined in other laws.--
(A) Affiliate.--The term ``affiliate'' has the
meaning given such term in section 2(k) of the Bank
Holding Company Act of 1956.
(B) State member bank, state nonmember bank.--The
terms ``State member bank'' and ``State nonmember
bank'' have the same meanings as in subsections (d)(2)
and (e)(2), respectively, of section 3 of the Federal
Deposit Insurance Act.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1000. Short title; definitions; table of contents.
Subtitle A--The Financial Services Oversight Council
Sec. 1001. Financial Services Oversight Council established.
Sec. 1002. Resolution of disputes among Federal financial regulatory
agencies.
Sec. 1003. Technical and professional advisory committees.
Sec. 1004. Financial Services Oversight Council meetings and council
governance.
Sec. 1005. Council staff and funding.
Sec. 1006. Reports to the Congress.
Sec. 1007. Applicability of certain Federal laws.
Subtitle B--Prudential Regulation of Companies and Activities for
Financial Stability Purposes
Sec. 1101. Council and Board authority to obtain information.
Sec. 1102. Council prudential regulation recommendations to primary
regulators.
Sec. 1103. Identification of financial companies for heightened
prudential standards for financial
stability purposes.
Sec. 1104. Regulation of identified financial holding companies for
financial stability purposes.
Sec. 1105. Authority to file involuntary petition for bankruptcy.
Sec. 1106. Identification of activities or practices for heightened
prudential standards and safeguards for
financial stability purposes.
Sec. 1107. Regulation of identified activities for financial stability
purposes.
Sec. 1108. Effect of rescission of identification.
Sec. 1109. Emergency financial stabilization.
Sec. 1110. Examinations and enforcement actions for insurance and
resolutions purposes.
Sec. 1111. Rule of construction.
Subtitle C--Improvements to Supervision and Regulation of Federal
Depository Institutions
Sec. 1201. Definitions.
Sec. 1202. Amendments to the Home Owners' Loan Act relating to transfer
of functions.
Sec. 1203. Amendments to the revised statutes.
Sec. 1204. Power and duties transferred.
Sec. 1205. Transfer date.
Sec. 1206. Office of Thrift Supervision abolished.
Sec. 1207. Savings provisions.
Sec. 1208. Regulations and orders.
Sec. 1209. Coordination of transition activities.
Sec. 1210. Interim responsibilities of office of the comptroller of the
currency and office of thrift supervision.
Sec. 1211. Employees transferred.
Sec. 1212. Property transferred.
Sec. 1213. Funds transferred.
Sec. 1214. Disposition of affairs.
Sec. 1215. Continuation of services.
Sec. 1216. Treatment of savings and loan holding companies.
Sec. 1217. Practices of certain mutual thrift holding companies
preserved.
Sec. 1218. Composition of board of directors of the Federal Deposit
Insurance Corporation.
Sec. 1219. Amendments to section 3.
Sec. 1220. Amendments to section 7.
Sec. 1221. Amendments to section 8.
Sec. 1222. Amendments to section 11.
Sec. 1223. Amendments to section 13.
Sec. 1224. Amendments to section 18.
Sec. 1225. Amendments to section 28.
Sec. 1226. Amendments to the Alternative Mortgage Transaction Parity
Act of 1982.
Sec. 1227. Amendments to the Bank Holding Company Act of 1956.
Sec. 1228. Amendments to the Bank Protection Act of 1968.
Sec. 1229. Amendments to the Bank Service Company Act.
Sec. 1230. Amendments to the Community Reinvestment Act of 1977.
Sec. 1231. Amendments to the Depository Institution Management
Interlocks Act.
Sec. 1232. Amendments to the Emergency Homeowner's Relief Act.
Sec. 1233. Amendments to the Equal Credit Opportunity Act.
Sec. 1234. Amendments to the Federal Credit Union Act.
Sec. 1235. Amendments to the Federal Financial Institutions Examination
Council Act of 1978.
Sec. 1236. Amendments to the Federal Home Loan Bank Act.
Sec. 1237. Amendments to the Federal Reserve Act.
Sec. 1238. Amendments to the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989.
Sec. 1239. Amendments to the Housing Act of 1948.
Sec. 1240. Amendments to the Housing and Community Development Act of
1992.
Sec. 1241. Amendments to the Housing and Urban-Rural Recovery Act of
1983.
Sec. 1242. Amendments to the National Housing Act.
Sec. 1243. Amendments to the Right to Financial Privacy Act of 1978.
Sec. 1244. Amendments to the Balanced Budget and Emergency Deficit
Control Act of 1985.
Sec. 1245. Amendments to the Crime Control Act of 1990.
Sec. 1246. Amendment to the Flood Disaster Protection Act of 1973.
Sec. 1247. Amendments to the Investment Company Act of 1940.
Sec. 1248. Amendments to the Neighborhood Reinvestment Corporation Act.
Sec. 1249. Amendments to the Securities Exchange Act of 1934.
Sec. 1250. Amendments to title 18, United States Code.
Sec. 1251. Amendments to title 31, United States Code.
Subtitle D--Further Improvements to the Regulation of Bank Holding
Companies and Depository Institutions
Sec. 1301. Treatment of credit card banks, industrial loan companies,
and certain other companies under the Bank
Holding Company Act.
Sec. 1302. Registration of certain companies as bank holding companies.
Sec. 1303. Reports and examinations of bank holding companies;
regulation of functionally regulated
subsidiaries.
Sec. 1304. Requirements for financial holding companies to remain well
capitalized and well managed.
Sec. 1305. Standards for interstate acquisitions.
Sec. 1306. Enhancing existing restrictions on bank transactions with
affiliates.
Sec. 1307. Eliminating exceptions for transactions with financial
subsidiaries.
Sec. 1308. Lending limits applicable to credit exposure on derivative
transactions, repurchase agreements,
reverse repurchase agreements, and
securities lending and borrowing
transactions.
Sec. 1309. Application of national bank lending limits to insured State
banks.
Sec. 1310. Restriction on conversions of troubled banks.
Sec. 1311. Lending limits to insiders.
Sec. 1312. Limitations on purchases of assets from insiders.
Sec. 1313. Rules regarding capital levels of bank holding companies.
Sec. 1314. Enhancements to factors to be considered in certain
acquisitions.
Sec. 1315 Elimination of elective investment bank holding company
framework.
Sec. 1316. Examination fees for large bank holding companies.
Subtitle E--Payment, Clearing, and Settlement Supervision
Sec. 1401. Short title.
Sec. 1402. Findings and purposes.
Sec. 1403. Definitions.
Sec. 1404. Identification of systemically important financial market
utilities and payment, clearing, and
settlement activities.
Sec. 1405. Standards for systemically important financial market
utilities and payment, clearing, or
settlement activities.
Sec. 1406. Operations and changes to rules, procedures, or operations
of identified financial market utilities.
Sec. 1407. Examination of and enforcement actions against identified
financial market utilities.
Sec. 1407. Examination of and enforcement actions against identified
financial market utilities.
Sec. 1408. Examination of and enforcement actions against financial
institutions subject to standards for
identified activities.
Sec. 1409. Provision of information, reports, or records.
Sec. 1410. Rulemaking.
Sec. 1411. Other authority.
Sec. 1412. Effective date.
Subtitle F--Improvements to the Asset-backed Securitization Process
Sec. 1501. Short title.
Sec. 1502. Credit risk retention.
Sec. 1503. Periodic and other reporting under the Securities Exchange
Act of 1934 for asset-backed securities.
Sec. 1504. Representations and warranties in asset-backed offerings.
Sec. 1505. Exempted transactions under the Securities Act of 1933.
Subtitle G--Enhanced Resolution Authority
Sec. 1601. Short title.
Sec. 1602. Definitions.
Sec. 1603. Systemic risk determination.
Sec. 1604. Resolution; stabilization.
Sec. 1605. Judicial review.
Sec. 1606. Directors not liable for acquiescing in appointment of
receiver or qualified receiver.
Sec. 1607. Termination and exclusion of other actions.
Sec. 1608. Rulemaking.
Sec. 1609 Powers and duties of corporation.
Sec. 1610. Clarification of prohibition regarding concealment of assets
from qualified receiver, receiver, or
liquidating agent.
Sec. 1611. Miscellaneous provisions.
Subtitle H--Additional Improvements for Financial Crisis Management
Sec. 1701. Additional improvements for financial crisis management.
Subtitle A--The Financial Services Oversight Council
SEC. 1001. FINANCIAL SERVICES OVERSIGHT COUNCIL ESTABLISHED.
(a) Establishment.--Immediately upon enactment of this title, there
is established a Financial Services Oversight Council.
(b) Membership.--The Council shall consist of the following:
(1) Voting members.--Voting members, who shall each have
one vote on the Council, as follows:
(A) The Secretary of the Treasury, who shall serve
as the Chairman of the Council.
(B) The Chairman of the Board of Governors of the
Federal Reserve System.
(C) The Comptroller of the Currency.
(D) The Director of the Office of Thrift
Supervision, until the functions of the Director of the
Office of Thrift Supervision are transferred to
pursuant to subtitle C of this title.
(E) The Chairman of the Securities and Exchange
Commission.
(F) The Chairman of the Commodity Futures Trading
Commission.
(G) The Chairperson of the Federal Deposit
Insurance Corporation.
(H) The Director of the Federal Housing Finance
Agency.
(I) The Chairman of the National Credit Union
Administration.
(2) Nonvoting members.--Nonvoting members, who shall serve
in an advisory capacity:
(A) A State insurance commissioner, to be
designated by a selection process determined by the
State insurance commissioners, provided that the term
for which a State insurance commissioner may serve
shall last no more than the 2-year period beginning on
the date that the commissioner is selected.
(B) A State banking supervisor, to be designated by
a selection process determined by the State bank
supervisors, provided that the term for which a State
banking supervisor may serve shall last no more than
the 2-year period beginning on the date that the
supervisor is selected.
(c) Duties.--The Council shall have the following duties.
(1) To advise the Congress on financial regulation and make
recommendations that will enhance the integrity, efficiency,
orderliness, competitiveness, and stability of the United
States financial markets.
(2) To monitor the financial services marketplace to
identify potential threats to the stability of the United
States financial system.
(3) To identify financial companies and financial
activities that should be subject to heightened prudential
standards in order to promote financial stability and mitigate
systemic risk in accordance with sections subtitles B and E of
this title.
(4) To issue formal recommendations that a Council member
agency adopt heightened prudential standards for firms it
regulates to mitigate systemic risk in accordance with subtitle
B of this title.
(5) To facilitate information sharing and coordination
among the members of the Council regarding financial services
policy development, rulemakings, examinations, reporting
requirements, and enforcement actions.
(6) To provide a forum for discussion and analysis of
emerging market developments and financial regulatory issues
among its members.
(7) At the request of an agency that is a Council member,
to resolve a jurisdictional or regulatory dispute between that
agency and another agency that is a Council member in
accordance with section 1002 of this subtitle.
SEC. 1002. RESOLUTION OF DISPUTES AMONG FEDERAL FINANCIAL REGULATORY
AGENCIES.
(a) Request for Dispute Resolution.--The Council shall resolve a
dispute among 2 or more Federal financial regulatory agencies if--
(1) a Federal financial regulatory agency has a dispute
with another Federal financial regulatory agency about the
agencies' respective jurisdiction over a particular financial
company or financial activity or product (excluding matters for
which another dispute mechanism specifically has been provided
under Federal law);
(2) the disputing agencies cannot, after a demonstrated
good faith effort, resolve the dispute among themselves; and
(3) any of the Federal financial regulatory agencies
involved in the dispute--
(A) provides all other disputants prior notice of
its intent to request dispute resolution by the
Council; and
(B) requests in writing, no earlier than 14 days
after providing the notice described in paragraph (A),
that the Council resolve the dispute.
(b) Council Decision.--The Council shall decide the dispute--
(1) within a reasonable time after receiving the dispute
resolution request;
(2) after consideration of relevant information provided by
each party to the dispute; and
(3) by agreeing with 1 of the disputants regarding the
entirety of the matter or by determining a compromise position.
(c) Form and Binding Effect.--A Council decision under this section
shall be in writing and include an explanation and shall be binding on
all Federal financial regulatory agencies that are parties to the
dispute.
SEC. 1003. TECHNICAL AND PROFESSIONAL ADVISORY COMMITTEES.
The Council is authorized to appoint--
(1) subsidiary working groups composed of Council members
and their staff, Council staff, or a combination; and
(2) such temporary special advisory, technical, or
professional committees as may be useful in carrying out its
functions, which may be composed of Council members and their
staff, other persons, or a combination.
SEC. 1004. FINANCIAL SERVICES OVERSIGHT COUNCIL MEETINGS AND COUNCIL
GOVERNANCE.
(a) Meetings.--The Council shall meet as frequently as the Chairman
deems necessary, but not less than quarterly.
(b) Voting.--Unless otherwise provided, the Council shall make all
decisions the Council is required or authorized to make by a majority
of the total voting membership of the Council under section 1001(b)(1).
SEC. 1005. COUNCIL STAFF AND FUNDING.
(a) Department of the Treasury.--The Secretary of the Treasury
shall--
(1) detail permanent staff from the Department of the
Treasury to provide the Council (and any temporary special
advisory, technical, or professional committees appointed by
the Council) with professional and expert support; and
(2) provide such other services and facilities necessary
for the performance of the Council's functions and fulfillment
of the duties and mission of the Council.
(b) Other Departments and Agencies.--In addition to the assistance
prescribed in subsection (a), departments and agencies of the United
States may, with the approval of the Secretary of the Treasury--
(1) detail department or agency staff on a temporary basis
to provide additional support to the Council (and any special
advisory, technical, or professional committees appointed by
the Council); and
(2) provide such services, and facilities as the other
departments or agencies may determine advisable.
(c) Staff Status; Council Funding.--
(1) Status.--Staff detailed to the Council by the Secretary
of the Treasury and other United States departments or agencies
shall--
(A) report to and be subject to oversight by the
Council during their assignment to the Council; and
(B) be compensated by the department of agency from
which the stall was detailed.
(2) Funding.--The administrative expense of the Council
shall be paid by the departments and agencies represented by
voting members of the Council on an equal basis.
SEC. 1006. REPORTS TO THE CONGRESS.
(a) In General.--The Council shall submit an annual report to the
Committee on Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate that--
(1) describes significant financial market developments and
potential emerging threats to the stability of the financial
system;
(2) recommends actions that will improve financial
stability;
(3) describes any company or activity identifications made
under subtitles B and E; and
(4) describes any dispute resolutions undertaken under
section 1002 and the result of such resolutions.
(b) Confidentiality.--The Committees of the Congress receiving the
Council's report shall maintain the confidentiality of the identity of
companies described in accordance with subsection (a)(3) and the
information relating to dispute resolutions described in accordance
with subsection (a)(4).
SEC. 1007. APPLICABILITY OF CERTAIN FEDERAL LAWS.
(a) The Federal Advisory Committee Act shall not apply to the
Financial Services Oversight Council, or any special advisory,
technical, or professional committees appointed by the Council (except
that, if an advisory, technical, or professional committee has one or
more members who are not employees of or affiliated with the United
States Government, the Council shall publish a list of the names of the
members of such committee).
(b) The Council shall not be deemed an ``agency'' for purposes of
any State or Federal law.
Subtitle B--Prudential Regulation of Companies and Activities for
Financial Stability Purposes
SEC. 1101. COUNCIL AND BOARD AUTHORITY TO OBTAIN INFORMATION.
(a) In General.--The Council and the Board are authorized to
receive, and may request the production of, any data or information
from members of the Council, as necessary--
(1) to monitor the financial services marketplace to
identify potential threats to the stability of the United
States financial system; or
(2) to otherwise carry out any of the provisions of this
title, including to ascertain a primary financial regulatory
agency's implementation of recommended prudential standards
under this subtitle.
(b) Submission by Council Members.--Notwithstanding any provision
of law, any voting or nonvoting member of the Council is authorized to
provide information to the Council, and the members of the Council
shall maintain the confidentiality of such information.
(c) Financial Data Collection.--
(1) In general.--The Council or the Board may require the
submission of periodic and other reports from any financial
company solely for the purpose of assessing the extent to which
a financial activity or financial market in which the financial
company participates, or the company itself, poses a threat to
financial stability.
(2) Mitigation of report burden.--Before requiring the
submission of reports from financial companies that are
regulated by the Federal financial regulatory agencies, the
Council or the Board shall coordinate with such agencies and
shall, whenever possible, rely on information already being
collected by such agencies.
(d) Consultation With Agencies and Entities.--The Council or the
Board, as appropriate, may consult with Federal and State agencies and
other entities to carry out any of the provisions of this subtitle.
SEC. 1102. COUNCIL PRUDENTIAL REGULATION RECOMMENDATIONS TO PRIMARY
REGULATORS.
(a) In General.--The Council is authorized to issue formal
recommendations, publicly or privately, that a Federal financial
regulatory agency adopt heightened prudential standards for firms it
regulates to mitigate systemic risk.
(b) Agency Authority To Implement Standards.--A Federal financial
regulatory agency specifically is authorized to impose, require reports
regarding, examine for compliance with, and enforce heightened
prudential standards and safeguards for the firms it regulates to
mitigate systemic risk. This authority is in addition to and does not
limit any other authority of the Federal financial regulatory agencies.
Compliance by an entity with actions taken by a Federal financial
regulatory agency under this section shall be enforceable in accordance
with the statutes governing the respective Federal financial regulatory
agency's jurisdiction over the entity as if the agency action were
taken under those statutes.
(c) Agency Notice to Council.--A Federal financial regulatory
agency shall, within 60 days of receiving a Council recommendation
under this section, notify the Council in writing regarding--
(1) the actions the Federal financial regulatory agency has
taken in response to the Council's recommendation; or
(2) the reason the Federal financial regulatory agency has
failed to respond to the Council's request.
SEC. 1103. IDENTIFICATION OF FINANCIAL COMPANIES FOR HEIGHTENED
PRUDENTIAL STANDARDS FOR FINANCIAL STABILITY PURPOSES.
(a) In General.--The Council may subject a financial company to
heightened prudential standards under section 1104 if the Council
determines that--
(1) material financial distress at the company could pose a
threat to financial stability or the economy; or
(2) the nature, scope, or mix of the company's activities
could pose a threat to financial stability or the economy.
(b) Criteria.--In making a determination under subsection (a), the
Council shall consider the following criteria:
(1) The amount and nature of the company's financial
assets.
(2) The amount and nature of the company's liabilities,
including the degree of reliance on short-term funding.
(3) The extent and nature of the company's off-balance
sheet exposures.
(4) The extent and nature of the company's transactions and
relationships with other financial companies.
(5) The company's importance as a source of credit for
households, businesses, and State and local governments and as
a source of liquidity for the financial system.
(6) The nature, scope, and mix of the company's activities.
(7) Any other factors that the Council deems appropriate.
(c) Periodic Review and Rescission of Findings.--
(1) Submission of assessment.--The Board shall periodically
submit a report to the Council containing an assessment of
whether each company subjected to heightened prudential
standards should continue to be subject to such standards.
(2) Review and rescission.--The Council shall--
(A) review the assessment submitted pursuant to
paragraph (1) and any information or recommendation
submitted by members of the Council regarding whether
an identified financial holding company continues to
merit heightened prudential standards; and
(B) rescind the action subjecting a company to
heightened prudential supervision if the Council
determines that the company no longer meets the
conditions for identification in subsections (a) and
(b).
(d) Procedure for Identifying or Rescinding Identification of a
Company.--
(1) Council and board coordination.--The Council shall
inform the Board if the Council is considering whether to
identify or cease to identify a company under this section.
(2) Notice and opportunity for consideration of written
materials.--
(A) In general.--The Board shall, in an executive
capacity on behalf of the Council, inform a financial
company that the Council is considering whether to
identify or cease to identify such company under this
section, including an explanation of the basis of the
Council's consideration, and shall provide such
financial company 30 days to submit written materials
to inform the Council's decision. The Council shall
make its decision, and the Board shall notify the
company of the Council's decision by order, within 60
days of the due date for such written materials
(B) Emergency exception to process requirements.--
The Council may waive or modify the requirements of
subparagraph (A) with respect to a company if the
Council determines that such waiver or modification is
necessary or appropriate to prevent or mitigate threats
posed by the company to financial stability. The Board
shall, in an executive capacity on behalf of the
Council, provide notice of such waiver or modification
to the financial company concerned as soon as
practicable, which shall be no later than 24 hours
after the waiver or modification.
(3) Consultation.--If a financial company being considered
for identification under this section is, or has one or more
subsidiaries that are, subject to regulation by a Federal
financial regulatory agency, as such subsidiaries are described
in [section 2(6)] of this subtitle, the Council shall consult
with the relevant Federal financial regulatory agency for each
such subsidiary before making any decision under this section.
(4) Emergency exception to majority vote of council
requirement.--If each of the Secretary of the Treasury, the
Board, and the Federal Deposit Insurance Corporation determines
that a financial company must be subjected to heightened
prudential standards under this section immediately to prevent
destabilization of the financial system or economy, the
Secretary, the Board, and the Corporation may identify a
financial company under this section upon certification by the
President of the United States.
(e) Effect of Identification.--
(1) Application of the bank holding company act.--A
financial company that is not a bank holding company as defined
in the Bank Holding Company Act at the time of its
identification under this section, shall--
(A) if such company conducts at the time of its
identification only activities that are determined to
be financial in nature or incidental thereto under
section 4(k) of the Bank Holding Company Act, be
treated as a bank holding company that has elected to
be a financial holding company for purposes of the Bank
Holding Company Act of 1956, as amended, the Federal
Deposit Insurance Act, as amended, and all other
Federal laws and regulations governing bank holding
companies and financial holding companies; or
(B) if such company conducts at the time of its
identification activities other than those that are
determined to be financial in nature or incidental
thereto under section 4(k) of the Bank Holding Company
Act, be required to establish and conduct all its
activities that are determined to be financial in
nature or incidental thereto under section 4(k) of the
Bank Holding Company Act in an intermediate holding
company established under section 6 of the Bank Holding
Company Act, which intermediate holding company shall
be the ``identified financial holding company'' for
purposes of this subtitle.
(2) Exemptive authority.--Notwithstanding any provision of
the Bank Holding Company Act, the Board may, if it determines
such action is necessary to ensure appropriate heightened
prudential supervision, issue such exemptions from that Act as
may be necessary with regard to identified financial holding
companies that do not control an insured depository
institution.
(3) Heightened prudential regulation.--The Board shall
apply heightened prudential standards to each identified
financial holding company subject to this title.
(f) No Public List of Identified Companies.--The Council and the
Board may not publicly release a list of companies identified under
this section.
SEC. 1104. REGULATION OF IDENTIFIED FINANCIAL HOLDING COMPANIES FOR
FINANCIAL STABILITY PURPOSES.
(a) Prudential Standards for Identified Financial Holding
Companies.--
(1) In general.--To mitigate risks to financial stability
and the economy posed by an identified financial holding
company, the Board shall impose heightened prudential standards
on such company. Such standards shall be designed to maximize
financial stability taking costs to long-term financial and
economic growth into account, be heightened when compared to
the standards that otherwise would apply to financial holding
companies that are not identified pursuant to this subtitle
(including by addressing additional or different types of risks
than otherwise applicable standards), and reflect the potential
risk posed to financial stability by the identified financial
holding company.
(2) Standards.--
(A) Required standards.--The heightened standards
imposed by the Board under this section shall include--
(i) risk-based capital requirements;
(ii) leverage limits;
(iii) liquidity requirements;
(iv) concentration requirements (as
specified in subsection (c));
(v) prompt corrective action requirements
(as specified in subsection (d));
(vi) resolution plan requirements (as
specified in subsection (e)); and
(vii) overall risk management requirements.
(B) Additional standards.--The heightened standards
imposed by the Board under this section also may
include any other prudential standards that the Board
deems advisable, including taking actions to mitigate
systemic risk (as specified in paragraph (5).
(3) Application of required standards.--In imposing
prudential standards under this subsection, the Board may
differentiate among identified financial holding companies on
an individual basis or by category, taking into consideration
their capital structure, risk, complexity, financial
activities, the financial activities of their subsidiaries, and
any other factors that the Board deems appropriate.
(4) Well capitalized and well managed.--An identified
financial holding company shall at all times after it files its
registration statement as an identified financial holding
company be well capitalized and well managed as defined by the
Board.
(5) Mitigation of systemic risk.--If the Board determines,
after notice and an opportunity for hearing, that the size of
an identified financial holding company or the scope or nature
of activities directly or indirectly conducted by an identified
financial holding company poses a threat to the safety and
soundness of such company or to the financial stability of the
United States, the Board may require the identified financial
holding company to sell or otherwise transfer assets or off-
balance sheet items to unaffiliated firms, to terminate one or
more activities, or to impose conditions on the manner in which
the identified financial holding company conducts one or more
activities.
(6) Application to foreign financial companies.--The Board
shall prescribe regulations regarding the application of
heightened prudential standards to financial companies that are
organized or incorporated in a country other than the United
States, and that own or control a Federal or State branch,
subsidiary, or operating entity that is an identified financial
holding company, giving due regard to the principle of national
treatment and equality of competitive opportunity.
(b) Prudential Standards at Functionally Regulated Subsidiaries and
Subsidiary Depository Institutions.--
(1) Board authority to recommend standards.--With respect
to a functionally regulated subsidiary (as such term is defined
in section 5 of the Bank Holding Company Act) or a subsidiary
depository institution of an identified financial holding
company, the Board may recommend that the relevant primary
financial regulatory agency for such functionally regulated
subsidiary or subsidiary depository institution prescribe
heightened prudential standards on such functionally regulated
subsidiary or subsidiary depository institution. Any standards
recommended by the Board under this section shall be of the
same type as those described in subsection (a)(2) that the
Board is required or authorized to impose directly on the
identified financial holding company.
(2) Agency authority to implement heightened standards and
safeguards.--Each primary financial regulatory agency that
receives a Board recommendation under paragraph (1) is
authorized to impose, require reports regarding, examine for
compliance with, and enforce standards under this subsection
with respect to the entities described in [section 2(6)] for
which it is the primary financial regulatory agency. This
authority is in addition to and does not limit any other
authority of the primary financial regulatory agencies.
Compliance by an entity with actions taken by a primary
financial regulatory agency under this section shall be
enforceable in accordance with the statutes governing the
respective agency's jurisdiction over the entity as if the
agency action were taken under those statutes.
(3) Imposition of standards.--Standards imposed by a
primary financial regulatory agency under this subsection shall
be the standards recommended by the Board or any other similar
standards that the Board deems acceptable after consultation
between the Board and the primary financial regulatory agency.
(4) Failure to adopt standards; notice to council and
board.--If a primary financial regulatory agency fails to
implement the prudential standards recommended by the Board or
other similar standards that are acceptable to the Board within
60 days of the Board's recommendation, the agency shall justify
in writing the failure of such agency to act to the Council and
the Board within that same time period.
(5) Backup authority of the board.--
(A) In general.--When notified that a primary
financial regulatory agency has failed to impose the
heightened prudential standards recommended by the
Board for financial stability purposes under this
subsection, the Board is authorized to directly impose,
require reports regarding, examine for compliance with,
and enforce such heightened prudential standards under
this subsection with respect to a functionally
regulated subsidiary for which the primary financial
regulatory agency ordinarily is responsible.
(B) Limitations on board backup authority.--The
Board's standard-imposition, report-related,
examination, and enforcement activities under this
subsection shall be limited to the heightened
prudential standards imposed under this subsection.
(c) Concentration Limits for Identified Financial Holding
Companies.--
(1) Standards.--In order to limit the risks that the
failure of any company could pose to an identified financial
holding company and to the stability of the United States
financial system, the Board, by regulation, shall prescribe
standards that limit the risks posed by the exposure of an
identified financial holding company to any other company.
(2) Limitation on credit exposure.--The regulations
prescribed by the Board shall prohibit each identified
financial holding company from having credit exposure to any
unaffiliated company that exceeds 25 percent of the identified
financial holding company's capital stock and surplus or such
lower amount as the Board may determine by regulation to be
necessary to mitigate risks to financial stability.
(3) Credit exposure.--For purposes of this subsection, an
identified financial holding company's ``credit exposure'' to a
company means--
(A) all extensions of credit to the company,
including loans, deposits, and lines of credit;
(B) all repurchase agreements and reverse
repurchase agreement with the company;
(C) all securities borrowing and lending
transactions with the company to the extent that such
transactions create credit exposure of the identified
financial holding company to the company;
(D) all guarantees, acceptances, or letters of
credit (including endorsement or standby letters of
credit) issued on behalf of the company;
(E) all purchases of or investment in securities
issued by the company;
(F) counterparty credit exposure to the company in
connection with a derivative transaction between the
identified financial holding company and the company;
and
(G) any other similar transactions that the Board
by regulation determines to be a credit exposure for
purposes of this section.
(4) Attribution rule.--For purposes of this subsection, any
transaction by an identified financial holding company with any
person is deemed a transaction with a company to the extent
that the proceeds of the transaction are used for the benefit
of, or transferred to, that company.
(5) Rulemaking.--The Board may issue such regulations and
orders, including definitions consistent with this subsection,
as may be necessary to administer and carry out the purpose of
this subsection.
(6) Exemptions.--The Board may, by regulation or order,
exempt transactions, in whole or in part, from the definition
of credit exposure if it finds that the exemption is in the
public interest and consistent with the purpose of this
subsection.
(7) Transition period.--This subsection and any regulations
and orders of the Board under the authority of this subsection
shall not be effective until three years from the effective
date of this subsection. The Board can extend the effective
date for up to two additional years to promote financial
stability.
(d) Prompt Corrective Action for Identified Financial Holding
Companies.--
(1) Prompt corrective action required.--The Board shall
take prompt corrective action to resolve the problems of
identified financial holding companies.
(2) Definitions.--For purposes of this section--
(A) Capital categories.--
(i) Well capitalized.--An identified
financial holding company is ``well
capitalized'' if it exceeds the required
minimum level for each relevant capital
measure.
(ii) Undercapitalized.--An identified
financial holding company is
``undercapitalized'' if it fails to meet the
required minimum level for any relevant capital
measure.
(iii) Significantly undercapitalized.--An
identified financial holding company is
``significantly undercapitalized'' if it is
significantly below the required minimum level
for any relevant capital measure.
(iv) Critically undercapitalized.--An
identified financial holding company is
``critically undercapitalized'' if it fails to
meet any level specified in paragraph
(4)(C)(i).
(3) Other definitions.--
(A) Average.--The ``average'' of an accounting item
(such as total assets or tangible equity) during a
given period means the sum of that item at the close of
business on each business day during that period
divided by the total number of business days in that
period.
(B) Capital distribution.--The term ``capital
distribution'' means--
(i) a distribution of cash or other
property by an identified financial holding
company to its owners made on account of that
ownership, but not including any dividend
consisting only of shares of the identified
financial holding company or rights to purchase
such shares;
(ii) a payment by an identified financial
holding company to repurchase, redeem, retire,
or otherwise acquire any of its shares or other
ownership interests, including any extension of
credit to finance any person's acquisition of
those shares or interests; or
(iii) a transaction that the Board
determines, by order or regulation, to be in
substance a distribution of capital to the
owners of the identified financial holding
company.
(C) Capital restoration plan.--The term ``capital
restoration plan'' means a plan submitted under
paragraph (6)(B).
(D) Compensation.--The term ``compensation''
includes any payment of money or provision of any other
thing of value in consideration of employment.
(E) Relevant capital measure.--The term ``relevant
capital measure'' means the measures described in
paragraph (4).
(F) Required minimum level.--The term ``required
minimum level'' means, with respect to each relevant
capital measure, the minimum acceptable capital level
specified by the Board by regulation.
(G) Senior executive officer.--The term ``senior
executive officer'' has the same meaning as the term
``executive officer'' in section 22(h) of the Federal
Reserve Act (12 U.S.C. 375b).
(4) Capital standards.--
(A) Relevant capital measures.--
(i) In general.--Except as provided in
clause (ii)(II), the capital standards
prescribed by the Board under subsection 6(c)
of the Bank Holding Company Act of 1956 (12
U.S.C. 1845(c)) shall include--
(I) a leverage limit; and
(II) a risk-based capital
requirement.
(ii) Other capital measures.--The Board may
by regulation--
(I) establish any additional
relevant capital measures to carry out
this section; or
(II) rescind any relevant capital
measure required under clause (i) upon
determining that the measure is no
longer an appropriate means for
carrying out this section.
(B) Capital categories generally.--The Board shall,
by regulation, specify for each relevant capital
measure the levels at which an identified financial
holding company is well capitalized, undercapitalized,
and significantly undercapitalized.
(C) Critical capital.--
(i) Board to specify level.--
(I) Leverage limit.--The Board
shall, by regulation, specify the ratio
of tangible equity to total assets at
which an identified financial holding
company is critically undercapitalized.
(II) Other relevant capital
measures.--The Board may, by
regulation, specify for 1 or more other
relevant capital measures, the level at
which an identified financial holding
company is critically undercapitalized.
(ii) Leverage limit range.--The level
specified under clause (i)(I) shall require
tangible equity in an amount--
(I) not less than 2 percent of
total assets; and
(II) except as provided in
subclause (I), not more than 65 percent
of the required minimum level of
capital under the leverage limit.
(5) Capital distributions restricted.--
(A) In general.--An identified financial holding
company shall make no capital distribution if, after
making the distribution, the identified financial
holding company would be undercapitalized.
(B) Exception.--Notwithstanding subparagraph (A),
the Board may permit an identified financial holding
company to repurchase, redeem, retire, or otherwise
acquire shares or ownership interests if the
repurchase, redemption, retirement, or other
acquisition--
(i) is made in connection with the issuance
of additional shares or obligations of the
identified financial holding company in at
least an equivalent amount; and
(ii) will reduce the identified financial
holding company's financial obligations or
otherwise improve the identified financial
holding company's financial condition.
(6) Provisions applicable to undercapitalized identified
financial companies.--
(A) Monitoring required.--The Board shall--
(i) closely monitor the condition of any
undercapitalized identified financial holding
company;
(ii) closely monitor compliance by any
undercapitalized identified financial holding
company with capital restoration plans,
restrictions, and requirements imposed under
this section; and
(iii) periodically review the plan,
restrictions, and requirements applicable to
any undercapitalized identified financial
holding company to determine whether the plan,
restrictions, and requirements are effective.
(B) Capital restoration plan required.--
(i) In general.--Any undercapitalized
identified financial holding company shall
submit an acceptable capital restoration plan
to the Board within the time allowed by the
Board under clause (iv).
(ii) Contents of plan.--The capital
restoration plan shall--
(I) specify--
(aa) the steps the
identified financial holding
company will take to become
well capitalized;
(bb) the levels of capital
to be attained by the
identified financial holding
company during each year in
which the plan will be in
effect;
(cc) how the identified
financial holding company will
comply with the restrictions or
requirements then in effect
under this section; and
(dd) the types and levels
of activities in which the
identified financial holding
company will engage; and
(II) contain such other information
that the Board may require.
(iii) Criteria for accepting plan.--The
Board shall not accept a capital restoration
plan unless it determines that the plan--
(I) complies with subparagraph (B);
(II) is based on realistic
assumptions, and is likely to succeed
in restoring the identified financial
holding company's capital; and
(III) would not appreciably
increase the risk (including credit
risk, interest-rate risk, and other
types of risk) to which the identified
financial holding company is exposed.
(iv) Deadlines for submission and review of
plans.--The Board shall, by regulation,
establish deadlines that--
(I) provide identified financial
holding companies with reasonable time
to submit capital restoration plans,
and generally require an identified
financial holding company to submit a
plan not later than 45 days after it
becomes undercapitalized; and
(II) require the Board to act on
capital restoration plans
expeditiously, and generally not later
than 60 days after the plan is
submitted.
(C) Asset growth restricted.--An undercapitalized
identified financial holding company shall not permit
its average total assets during any calendar quarter to
exceed its average total assets during the preceding
calendar quarter unless--
(i) the Board has accepted the identified
financial holding company's capital restoration
plan;
(ii) any increase in total assets is
consistent with the plan; and
(iii) the identified financial holding
company's ratio of tangible equity to total
assets increases during the calendar quarter at
a rate sufficient to enable it to become well
capitalized within a reasonable time.
(D) Prior approval required for acquisitions and
new lines of business.--An undercapitalized identified
financial holding company shall not, directly or
indirectly, acquire any interest in any company or
insured depository institution, or engage in any new
line of business, unless--
(i) the Board has accepted the identified
financial holding company's capital restoration
plan, the identified financial holding company
is implementing the plan, and the Board
determines that the proposed action is
consistent with and will further the
achievement of the plan;
(ii) the Board determines that the specific
proposed action is appropriate; or
(iii) the Board has exempted the identified
financial holding company from the requirements
of this paragraph with respect to the class of
acquisitions that includes the proposed action.
(E) Discretionary safeguards.--The Board may, with
respect to any undercapitalized identified financial
holding company, take actions described in any
subparagraph of paragraph (7)(B) if the Board
determines that those actions are necessary.
(7) Provisions applicable to significantly undercapitalized
identified financial holding companies and undercapitalized
identified financial holding companies that fail to submit and
implement capital restoration plans.--
(A) In general.--This paragraph shall apply with
respect to any identified financial holding company
that--
(i) is significantly undercapitalized; or
(ii) is undercapitalized and--
(I) fails to submit an acceptable
capital restoration plan within the
time allowed by the Board under
subsection (e)(2)(D); or
(II) fails in any material respect
to implement a capital restoration plan
accepted by the Board.
(B) Specific actions authorized.--The Board shall
carry out this paragraph by taking 1 or more of the
following actions:
(i) Requiring recapitalization.--Doing one
or more of the following--
(I) Requiring the identified
financial holding company to sell
enough shares or obligations of the
identified financial holding company so
that the identified financial holding
company will be well capitalized after
the sale.
(II) Further requiring that
instruments sold under clause (I) be
voting shares.
(III) Requiring the identified
financial holding company to be
acquired by or combine with another
company.
(ii) Restricting transactions with
affiliates.--
(I) Requiring the identified
financial holding company to comply
with section 23A of the Federal Reserve
Act (12 U.S.C. 371c), as if it were a
member bank.
(II) Further restricting the
identified financial holding company's
transactions with affiliates and
insiders.
(iii) Restricting asset growth.--
Restricting the identified financial holding
company's asset growth more stringently than
subsection (6)(C), or requiring the identified
financial holding company to reduce its total
assets.
(iv) Restricting activities.--Requiring the
identified financial holding company or any of
its subsidiaries to alter, reduce, or terminate
any activity that the Board determines poses
excessive risk to the identified financial
holding company.
(v) Improving management.--Doing one or
more of the following:
(I) New election of directors.--
Ordering a new election for the
identified financial holding company's
board of directors.
(II) Dismissing directors or senior
executive officers.--Requiring the
identified financial holding company to
dismiss from office any director or
senior executive officer who had held
office for more than 180 days
immediately before the identified
financial holding company became
undercapitalized. Dismissal under this
clause shall not be construed to be a
removal under section 8 of the Federal
Deposit Insurance Act (12 U.S.C. 1818).
(III) Employing qualified senior
executive officers.--Requiring the
identified financial holding company to
employ qualified senior executive
officers (who, if the Board so
specifies, shall be subject to approval
by the Board).
(vi) Requiring divestiture.--Requiring the
identified financial holding company to divest
itself of or liquidate any subsidiary if the
Board determines that the subsidiary is in
danger of becoming insolvent, poses a
significant risk to the identified financial
holding company, or is likely to cause a
significant dissipation of the identified
financial holding company's assets or earnings.
(vii) Requiring other action.--Requiring
the Identified financial company to take any
other action that the Board determines will
better carry out the purpose of this section
than any of the actions described in this
paragraph.
(C) Presumption in favor of certain actions.--In
complying with subparagraph (B), the Board shall take
the following actions, unless the Board determines that
the actions would not be appropriate--
(i) The action described in subclause (I)
or (II) of subparagraph (B)(i) (relating to
requiring the sale of shares or obligations, or
requiring the identified financial holding
company to be acquired by or combine with
another company).
(ii) The action described in paragraph
(B)(ii)(I) (relating to restricting
transactions with affiliates).
(D) Senior executive officers' compensation
restricted.--
(i) In general.--The identified financial
holding company shall not do any of the
following without the prior written approval of
the Board:
(I) Pay any bonus to any senior
executive officer.
(II) Provide compensation to any
senior executive officer at a rate
exceeding that officer's average rate
of compensation (excluding bonuses,
stock options, and profit-sharing)
during the 12 calendar months preceding
the calendar month in which the
identified financial holding company
became undercapitalized.
(ii) Failing to submit plan.--The Board
shall not grant any approval under clause (i)
with respect to an identified financial holding
company that has failed to submit an acceptable
capital restoration plan.
(E) Consultation with other regulators.--Before the
Board makes a determination under subparagraph (B)(vi)
with respect to a subsidiary that is a broker, dealer,
government securities broker, government securities
dealer, investment company, or investment adviser, the
Board shall consult with the Securities and Exchange
Commission and, in the case of any other subsidiary
which is subject to any financial responsibility or
capital requirement, any other appropriate regulator of
such subsidiary with respect to the proposed
determination of the Board and actions pursuant to such
determination.
(8) More stringent treatment based on other supervisory
criteria.--
(A) In general.--If the Board determines (after
notice and an opportunity for hearing) that an
identified financial holding company is in an unsafe or
unsound condition or, pursuant to section 8(b)(8) of
the Federal Deposit Insurance Act (12 U.S.C.
1818(b)(8)), deems the identified financial holding
company to be engaging in an unsafe or unsound
practice, the Board may--
(i) if the identified financial holding
company is well capitalized, require the
identified financial holding company to comply
with one or more provisions of paragraphs (5)
and (6), as if the institution were
undercapitalized; or
(ii) if the identified financial holding
company is undercapitalized, take any one or
more actions authorized under paragraph (7)(B)
as if the identified financial holding company
were significantly undercapitalized.
(B) Contents of plan.--A plan that may be required
pursuant to subparagraph (A)(i) shall specify the steps
that the identified financial holding company will take
to correct the unsafe or unsound condition or practice.
(9) Mandatory bankruptcy petition for critically
undercapitalized identified financial companies.--The Board
shall, not later than 90 days after an identified financial
holding company becomes critically undercapitalized--
(A) require the identified financial holding
company to file a petition for bankruptcy under section
301 of title 11, United States Code; or
(B) file a petition for bankruptcy against the
identified financial holding company under section 303
of title 11, United States Code.
(10) Implementation.--The Board shall prescribe such
regulations, issue such orders, and take such other actions the
Board determines to be necessary to carry out this section.
(11) Other authority not affected.--This section does not
limit any authority of the Board, any other Federal regulatory
agency, or a State to take action in addition to (but not in
derogation of) that required under this section.
(12) Consultation.--The Board and the Secretary of the
Treasury shall consult with their foreign counterparties and
through appropriate multilateral organizations to reach
agreement to extend comprehensive and robust prudential
supervision and regulation to all highly leveraged and
substantially interconnected financial companies.
(13) Administrative review of dismissal orders.--
(A) Timely petition required.--A director or senior
executive officer dismissed pursuant to an order under
paragraph (7)(B)(v)(II) may obtain review of that order
by filing a written petition for reinstatement with the
Board not later than 10 days after receiving notice of
the dismissal.
(B) Procedure.--
(i) Hearing required.--The Board shall give
the petitioner an opportunity to--
(I) submit written materials in
support of the petition; and
(II) appear, personally or through
counsel, before 1 or more members of
the Board or designated employees of
the Board.
(ii) Deadline for hearing.--The Board
shall--
(I) schedule the hearing referred
to in clause (i)(II) promptly after the
petition is filed; and
(II) hold the hearing not later
than 30 days after the petition is
filed, unless the petitioner requests
that the hearing be held at a later
time.
(iii) Deadline for decision.--Not later
than 60 days after the date of the hearing, the
Board shall--
(I) by order, grant or deny the
petition;
(II) if the order is adverse to the
petitioner, set forth the basis for the
order; and
(III) notify the petitioner of the
order.
(C) Standard for review of dismissal orders.--The
petitioner shall bear the burden of proving that the
petitioner's continued employment would materially
strengthen the identified financial holding company's
ability--
(i) to become well capitalized, to the
extent that the order is based on the
identified financial holding company's capital
level or failure to submit or implement a
capital restoration plan; and
(ii) to correct the unsafe or unsound
condition or unsafe or unsound practice, to the
extent that the order is based on paragraph
(8)(A).
(e) Reports Regarding Rapid and Orderly Resolution and Credit
Exposure.--
(1) In general.--The Board shall require each identified
financial holding company to report periodically to the Board
on--
(A) its plan for rapid and orderly resolution in
the event of severe financial distress;
(B) the nature and extent to which the identified
financial holding company has credit exposure to other
significant financial companies; and
(C) the nature and extent to which other
significant financial companies have credit exposure to
the identified financial holding company.
(2) No limiting effect on receiver or qualified receiver.--
A rapid resolution plan submitted in accordance with this
subsection shall not be binding on a receiver or qualified
receiver appointed under subtitle G, a bankruptcy court, or any
other authority that is authorized or required to resolve the
identified financial holding company or any of its subsidiaries
or affiliates.
(f) Avoiding Duplication.--The Board shall take any action the
Board deems appropriate to avoid imposing duplicative requirements
under this chapter for identified financial holding companies that are
also bank holding companies.
SEC. 1105. AUTHORITY TO FILE INVOLUNTARY PETITION FOR BANKRUPTCY.
Section 303 of title 11, United States Code is amended--
[(1) in subsection (h)--]
[(A) by striking ``or'' at the end of paragraph
(1); and]
[(B) by striking the period at the end of paragraph
(2) and inserting ``; or''; and]
(2) by adding the following new subsection:
``(m) Notwithstanding subsections (a) and (b) of this section, an
involuntary case may be commenced by the Board of Governors of the
Federal Reserve System against an identified financial holding company
as defined in section 2(t) of the Bank Holding Company Act of 1956.
Such involuntary case may be commenced on the ground that the
identified financial holding company is critically undercapitalized as
defined in section 6A(b) of the Bank Holding Company Act of 1956.''.
SEC. 1106. IDENTIFICATION OF ACTIVITIES OR PRACTICES FOR HEIGHTENED
PRUDENTIAL STANDARDS AND SAFEGUARDS FOR FINANCIAL
STABILITY PURPOSES.
(a) In General.--The Council may subject a financial activity or
practice to heightened prudential standards and safeguards under
section 1107 if the Council determines that the conduct of such
activity or practice could create or increase the risk of significant
liquidity, credit, or other problems spreading among financial
institutions or markets and thereby threaten the stability of the
financial system.
(b) Periodic Review of Activity Identifications.--
(1) Submission of assessment.--The Board shall periodically
submit a report to the Council containing an assessment of
whether each activity or practice subjected to heightened
prudential standards should continue to be subject to such
standards.
(2) Review and recision.--The Council shall--
(A) review the assessment submitted pursuant to
paragraph (1) and any information or recommendation
submitted by members of the Council regarding whether
an identified financial activity continues to merit
heightened prudential standards; and
(B) rescind the action subjecting an activity to
heightened prudential supervision if the Council
determines that the activity no longer meets the
criteria in subsection (a).
(c) Procedure for Identifying or Rescinding Identification of an
Activity or Practice.--
(1) Council and board coordination.--The Council shall
inform the Board if the Council is considering whether to
identify or cease to identify an activity under this section.
(2) Notice and opportunity for consideration of written
materials.--
(A) In general.--The Board shall, in an executive
capacity on behalf of the Council, provide notice to
financial companies that the Council is considering
whether to identify an activity or practice for
heightened prudential regulation, and shall provide a
financial company engaged in such activity or practice
30 days to submit written materials to inform the
Council's decision. The Council shall decide, and the
Board shall provide notice of the Council's decision,
within 60 days of the due date for such written
materials.
(B) Emergency exception.--The Council may waive or
modify the requirements of subparagraph (A) if the
Council determines that such waiver or modification is
necessary or appropriate to prevent or mitigate threats
posed by an activity to financial stability. The Board
shall, in an executive capacity on behalf of the
Council, provide notice of such waiver or modification
to financial companies as soon as practicable, which
shall be no later than 24 hours after the waiver or
modification.
(3) Form of decision.--The Board shall provide all notices
required under this subsection by posting a notice on the
Board's Web site and publishing a notice in the Federal
Register.
(d) Effect of Identification.--The Board shall, in accordance with
section 1107, recommend to the appropriate primary financial regulatory
agencies specific heightened prudential standards to be applied to an
activity or practice that the Council or the Board identifies under
this section.
SEC. 1107. REGULATION OF IDENTIFIED ACTIVITIES FOR FINANCIAL STABILITY
PURPOSES.
(a) Limitations on Identified Financial Activities and Practices.--
(1) Recommendations.--To mitigate the risks to United
States financial stability and the United States economy posed
by financial activities and practices that the Council or the
Board identifies for heightened prudential scrutiny in
accordance with section 1103, the Board shall recommend
prudential standards to the appropriate primary financial
regulatory agencies to apply to such identified activities and
practices.
(2) Criteria.--The actions recommended under paragraph
(1)--
(A) shall be designed to maximize financial
stability, taking costs to long-term financial and
economic growth into account; and
(B) may include prescribing the conduct of the
activity or practice in specific ways (such as by
limiting its scope, or applying particular capital or
risk-management requirements to the conduct of the
activity) or prohibiting the activity or practice
altogether.
(b) Implementation of Recommended Standards.--
(1) Role of primary financial regulatory agency.--Each
primary financial regulatory agency is authorized to impose,
require reports regarding, examine for compliance with, and
enforce standards in accordance with this section with respect
to those entities described in [section 2(6)] for which it is
the primary financial regulatory agency. This authority is in
addition to and does not limit any other authority of the
primary financial regulatory agencies. Compliance by an entity
with actions taken by a primary financial regulatory agency
under this section shall be enforceable in accordance with the
statutes governing the respective primary financial regulatory
agency's jurisdiction over the entity as if the agency action
were taken under those statutes.
(2) Imposition of standards.--Standards imposed under this
subsection shall be the standards recommended by the Board in
accordance with subsection (a) or any other similar standards
that the Board deems acceptable after consultation between the
Board and the primary financial regulatory agency.
(3) Failure to adopt standards; notice to council and
board.--If a primary financial regulatory agency fails to
implement the prudential standards recommended by the Board or
other similar standards that are acceptable to the Board within
60 days of the Board's recommendation, the primary financial
regulatory agency shall justify the failure of such agency to
act in writing to the Council and the Board within that same
time period.
(4) Backup authority of the board.--
(A) In general.--When notified that a primary
financial regulatory agency has failed to impose
heightened prudential standards recommended by the
Board for financial stability purposes under this
section, the Board is authorized to directly impose,
require reports regarding, examine for compliance with,
and enforce such heightened prudential standards under
this section with respect to entities described in
section 2(6) for which the primary financial regulatory
agency ordinarily is responsible.
(B) Limitation on board backup authority.--The
Board's standard-imposition, report-related,
examination, and enforcement activities under this
subsection shall be limited to heightened prudential
standards imposed under this section and shall be done
in coordination with the primary financial regulatory
agency.
SEC. 1108. EFFECT OF RESCISSION OF IDENTIFICATION.
(a) Notice.--When the Council or the Board determines that a
company or activity no longer is identified for heightened prudential
scrutiny, the Board shall inform the relevant primary financial
regulatory agency or agencies (if different from the Board) of that
finding.
(b) Determination of Primary Financial Regulatory Agency To
Continue.--A primary financial regulatory agency that has imposed
heightened prudential standards for financial stability purposes under
this subtitle shall determine whether standards that it has imposed
under this subtitle should remain in effect.
SEC. 1109. EMERGENCY FINANCIAL STABILIZATION.
(a) In General.--Upon the written approval of the Board of
Governors of the Federal Reserve System (which approval shall be made
upon a vote of not less than two-thirds of the members of such Board
then serving) and the Board of Directors of the Corporation (which
approval shall be made upon a vote of not less than two-thirds of the
members of such Board then serving), and with the written consent of
the Secretary of the Treasury (after consulting with the President),
the Corporation may extend credit to or guarantee obligations of
solvent insured depository institutions or other solvent companies that
are predominantly engaged in activities that are financial in nature,
if necessary to prevent financial instability during times of severe
economic distress, provided that a credit extension or guarantee of
obligations under this section shall not include provision of equity in
any form.
(b) Policies and Procedures.--Prior to exercising any authority
under this section, the Corporation shall establish policies and
procedures governing the extension of credit and the issuance of
guarantees. The terms and conditions of any extensions of credit or
guarantees issued shall be established by the Corporation with the
approval of the Secretary of the Treasury and the Board of Governors of
the Federal Reserve System.
(c) Funding.--There shall be available to the Corporation to carry
out this section amounts in the Treasury not otherwise appropriated,
including for the payment of reasonable administrative expenses.
Notwithstanding section 7(d) of the Federal Deposit Insurance Act (12
U.S.C. 1817(d)), such amounts shall be subject to apportionment for the
purposes of chapter 15 of title 31, United States Code. Amounts
received by the Corporation from assessments imposed under subsection
(d), extensions of credit, and guarantees, including payments of
principal, interest, and guarantee fees, shall be covered into the
Treasury as miscellaneous receipts.
(d) Recoupment; Assessment.--Any losses incurred by the Corporation
pursuant to subsection (a) shall be recovered from Corporation
assessments on large financial companies in the manner provided in
section 1609(o) of the Resolution Authority for Large, Interconnected
Financial Companies Act of 2009.
(e) Definitions.--For purposes of this section, the following
definitions apply:
(1) Activities that are financial in nature.--The term
``activities that are financial in nature'' means activities
that are determined to be financial in nature under section
4(k) of the Bank Holding Company Act of 1956 (12 U.S.C.
1843(k)) and activities that are identified for heightened
prudential standards under section 1106 of this title.
(2) Company.--The term ``company'' means any entity other
than a natural person that is incorporated or organized under
Federal law or the laws of any State.
(3) Corporation.--The term ``Corporation'' means the
Federal Deposit Insurance Corporation.
(4) Insured depository institution.--The term ``insured
depository institution'' shall have the same meaning as in
section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813).
(5) Solvent.--The term ``solvent'' means assets are more
than the obligations to creditors.
SEC. 1110. EXAMINATIONS AND ENFORCEMENT ACTIONS FOR INSURANCE AND
RESOLUTIONS PURPOSES.
(a) Examinations for Insurance and Resolutions Purposes.--Section
10(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)) is
amended by striking beginning ``whenever the Board of Directors
determines'' through the period and inserting ``or identified financial
holding company (as defined in section 2(5)) whenever the Board of
Directors determines a special examination of any such depository
institution is necessary to determine the condition of such depository
institution for insurance or such identified financial holding company
for resolution purposes.''.
(b) Enforcement Authority.--Section 8(t) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(t)) is amended--
(1) at the end of subparagraph (B) by striking ``or'';
(2) at the end of subparagraph (C) by striking the period
and inserting ``; or'';
(3) by inserting new subparagraph (D), as follows:
``(D) the conduct or threatened conduct (including
any acts or omissions) of the depository institution
holding company poses a risk to the Deposit Insurance
Fund.''; and
(4) by adding new paragraph (6) at the end as follows--
``(6) For purposes of this subsection:
``(A) The Corporation shall have the same powers
with respect to a depository institution holding
company and its affiliates as the appropriate Federal
banking agency has with respect to the holding company
and its affiliates; and
``(B) the holding company and its affiliates shall
have the same duties and obligations with respect to
the Corporation as the holding company and its
affiliates have with respect to the appropriate Federal
banking agency.''
SEC. 1111. RULE OF CONSTRUCTION.
The authorities granted to agencies under this subtitle are in
addition to any rulemaking, report-related, examination, enforcement,
or other authority that such agencies may have under other law and in
no way shall be construed to limit such other authority, except that
any standards imposed for financial stability purposes under this
subtitle shall supersede any conflicting less stringent requirements of
the primary financial regulatory agency but only the extent of the
conflict.
Subtitle C--Improvements to Supervision and Regulation of Federal
Depository Institutions
SEC. 1201. DEFINITIONS.
For purposes of this subtitle, the following definitions shall
apply:
(1) Board of governors.--The term ``Board of Governors''
means the Board of Governors of the Federal Reserve System.
(2) Corporation.--The term ``Corporation'' means the
Federal Deposit Insurance Corporation.
(3) Office of the comptroller of the currency.--The term
``Office of the Comptroller of the Currency'' means the office
established by section 324 of the Revised Statutes (12 U.S.C.
1).
(4) Office of thrift supervision.--The term ``Office of
Thrift Supervision'' means the office established by section 3
of the Home Owners' Loan Act (12 U.S.C. 1462a).
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(6) Transfer date.--The term ``transfer date'' has the
meaning provided in section 1205.
(7) Certain other terms.--The terms ``affiliate'', ``bank
holding company'', ``control'' (when used with respect to a
depository institution), ``depository institution'', ``Federal
banking agency'', ``Federal savings association'',
``including'', ``insured branch'', ``insured depository
institution'', ``savings association'', ``State savings
association'', and ``subsidiary'' have the same meanings as in
section 3 of the Federal Deposit Insurance Act.
SEC. 1202. AMENDMENTS TO THE HOME OWNERS' LOAN ACT RELATING TO TRANSFER
OF FUNCTIONS.
(a) Amendments to Section 2.--Section 2 of the Home Owners' Loan
Act (12 U.S.C. 1462) is amended by amending paragraph (1) to read as
follows:
``(1) Board of governors.--The term `Board of Governors'
means the Board of Governors of the Federal Reserve System.''.
(b) Amendments to Section 3.--Section 3 of the Home Owners' Loan
Act (12 U.S.C. 1462a) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Establishment of Division of Thrift Supervision.--To carry
out the purposes of this Act, there is hereby established the Division
of Thrift Supervision, which shall be a division within the Office of
the Comptroller of the Currency.'';
(2) in subsection (b)--
(A) by striking paragraph (1) and inserting the
following new paragraph:
``(1) In general.--The Division of Thrift Supervision shall
be headed by a Deputy Comptroller of the Currency who shall be
subject to the general oversight of the Comptroller of the
Currency.'';
(B) in paragraph (2), by striking ``Director'' and
inserting ``Comptroller of the Currency''; and
(C) by striking paragraph (3) and (4);
(3) by striking subsections (c), (d), and (e) and inserting
the following new subsection:
``(c) Powers of the Comptroller of the Currency.--The Comptroller
of the Currency shall have all the powers, duties, and functions
transferred by the Financial Stability Improvement Act of 2009 to the
Comptroller of the Currency to carry out this Act.'';
(4) by redesignating subsections (f) and (i) as subsections
(d) and (e), respectively;
(5) in subsection (d) (as so redesignated), by striking
``Director'' each place such term appears and inserting
``Comptroller of the Currency'';
(6) by striking subsections (g), (h), and (j); and
(7) in subsection (e) (as so redesignated), by striking
``compensation of the Director and other employees of the
Office and all other expenses thereof'' and inserting
``expenses incurred by the Comptroller of the Currency in
carrying out this Act''.
(c) Amendments to Section 4.--Section 4 of the Home Owners' Loan
Act (12 U.S.C. 1463) is amended by striking ``Director'' every time it
appears and inserting ``Comptroller of the Currency''.
(d) Amendments to Section 5.--
(1) Universal.--Section 5 of the Home Owners' Loan Act (12
U.S.C. 1464) is amended--
(A) by striking ``Director'' and ``Director of the
Office of Thrift Supervision'' each place such term
appears and inserting ``Comptroller of the Currency'';
and
(B) by striking ``Director's'' each place such term
appears and inserting ``Comptroller of the
Currency's''.
(2) Specific provisions.--
(A) Section 5(d)(2)(E) of the Home Owners' Loan Act
is amended by striking ``or the Resolution Trust
Corporation, as appropriate,'' each place such term
appears.
(B) Section 5(d)(3)(B) of the Home Owners' Loan Act
is amended by striking ``or the Resolution Trust
Corporation''.
(e) Amendments to Sections 8 and 9.--Sections 8 and 9 of the Home
Owners' Loan Act (12 U.S.C. 11466a, 1467) are each amended by striking
``Director'' each place such term appears and inserting ``Comptroller
of the Currency''.
(f) Technical and Conforming Amendments.--
(1) Definitions.--Section 2 of the Home Owners' Loan Act
(12 U.S.C. 1462) is amended--
(A) by striking paragraph (1) and (3); and
(B) by redesignating paragraphs (2), (4), (5), (6),
(7), (8), and (9) as paragraphs (1), (2), (3), (4),
(5), (6), (7), and (8), respectively.
(2) Section 3.--
(A) The heading for section 3 of the Home Owners'
Loan Act is amended by striking ``director of the
office of thrift supervision'' and inserting ``division
of thrift supervision''.
(B) The heading for subsection (e) of section (3)
of the Home Owners' Loan Act is amended by striking
``Director'' and inserting ``Comptroller of the
Currency''.
(3) Section 5.--The heading for paragraph (2)(E)(ii) of
section 5(d) of the Home Owners' Loan Act and the heading for
paragraph (3)(B) of such section are each amended by striking
``OR RTC''.
(g) Clerical Amendment.--The table of contents section for the Home
Owners' Loan Act is amended by striking the item relating to section 3
and inserting the following new item:
``Sec. 3. Division of Thrift Supervision.''.
SEC. 1203. AMENDMENTS TO THE REVISED STATUTES.
(a) Amendment to Section 324.--Section 324 of the Revised Statutes
of the United States (12 U.S.C. 1) is amended to read as follows:
``SEC. 324. COMPTROLLER OF THE CURRENCY.
``There shall be in the Department of the Treasury a bureau, the
chief officer of which bureau shall be called the Comptroller of the
Currency, and shall perform the duties of the Comptroller of the
Currency under the general direction of the Secretary of the Treasury.
The Comptroller of the Currency shall have the same authority over
matters as were vested in the Director of the Office of Thrift
Supervision or the Office of Thrift Supervision on the day before the
date of enactment of the Financial Stability Improvement Act of 2009.
The Secretary of the Treasury may not delay or prevent the issuance of
any rule or the promulgation of any regulation by the Comptroller of
the Currency.''.
(b) Amendments to Section 327.--Section 327 of the Revised Statutes
of the United States (12 U.S.C. 4) is amended to read as follows:
``SEC. 327 DEPUTY COMPTROLLERS.
``(a) Appointment.--The Secretary of the Treasury shall appoint no
more than 5 Deputy Comptrollers of the Currency--
``(1) 1 of whom shall be designated First Deputy
Comptroller of the Currency; and
``(2) 1 of whom shall be designated the Deputy Comptroller
of the Division of Thrift Supervision.
``(b) Pay.--The Secretary of the Treasury shall fix the
compensation of the Deputy Comptrollers of the Currency and provide
such other benefits as the Secretary may determine to be appropriate.
``(c) Oath of Office; Duties.--Each Deputy Comptroller shall take
the oath of office and shall perform such duties as the Comptroller of
the Currency shall direct.
``(d) Service as Acting Comptroller.--During a vacancy in the
office or during the absence or disability of the Comptroller, each
Deputy Comptroller shall possess the power and perform the duties
attached by law to the Office of the Comptroller under such order of
succession following the First Deputy Comptroller as the Comptroller
shall direct.''.
(c) Amendment to Section 329.--Section 329 of the Revised Statutes
of the United States (12 U.S.C. 11) is amended by inserting ``or any
Federal savings association'' before the period at the end.
(d) Amendment to Section 481.--The fourth sentence of the second
undesignated paragraph of Section 5240 of the Revised Statutes of the
United States (12 U.S.C. 481) is amended by striking ``Secretary of the
Treasury;'' and all that follows through the end of the sentence, and
inserting ``Secretary of the Treasury; the employment and compensation
of examiners, chief examiners, reviewing examiners, assistant
examiners, and of the other employees of the office of the Comptroller
of the Currency whose compensation is and shall be paid from
assessments on banks or affiliates thereof or from other fees or
charges imposed pursuant to this subchapter shall be set and adjusted
pursuant to chapter 71 of title five, United States Code and without
regard to the provisions of other laws applicable to officers or
employees of the United States.''.
(e) Amendment to Section 482.--The first sentence in the first
undesignated paragraph of Section 5240 of the Revised Statutes of the
United States (12 U.S.C. 482) is amended by inserting ``pursuant to
chapter 71 of title five, United States Code,'' after ``shall,''.
SEC. 1204. POWER AND DUTIES TRANSFERRED.
(a) Director of the Office of Thrift Supervision.--
(1) Transfer of functions.--Except as otherwise provided in
this subtitle, all functions of the Director of the Office of
Thrift Supervision are transferred to the Office of the
Comptroller of the Currency.
(2) Comptroller's authority.--Except as otherwise provided
in this subtitle, the Comptroller of the Currency shall succeed
to all powers, authorities, rights, and duties that were vested
in the Director of the Office of Thrift Supervision under
Federal law, including the Home Owners' Loan Act, on the day
before the transfer date.
(3) Functions relating to supervision of state savings
associations.--
(A) Transfer of functions.--All functions of the
Director of the Office of Thrift Supervision relating
to the supervision and regulation of State savings
associations are transferred to the Corporation.
(B) Corporation's authority.--The Corporation shall
succeed to all powers, authorities, rights, and duties
that were vested in the Director of the Office of
Thrift Supervision under Federal law, including the
Home Owners' Loan Act, on the day before the transfer
date, relating to the supervision and regulation of
State savings associations.
(b) Appropriate Federal Banking Agency.--Section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813) is amended in subsection (q)--
(1) by amending paragraph (1) to read as follows:
``(1) the Comptroller of the Currency in the case of any
national bank, Federal savings association or any Federal
branch or agency of a foreign bank;'';
(2) by amending paragraph (3) to read as follows:
``(3) the Federal Deposit Insurance Corporation in the case
of a State nonmember insured bank, a State savings association
or a foreign bank having an insured branch.''; and
(3) by striking paragraph (4).
(c) Transfer of Consumer Financial Protection Functions.--Nothing
in subsection (a) or (b) shall affect any transfer of consumer
financial protection functions of the Comptroller of the Currency and
the Director of the Office of Thrift Supervision to the Consumer
Financial Protection Agency as provided in the Consumer Financial
Protection Agency Act of 2009.
(d) Effective Date.--Subsections (a) and (b) shall become effective
on the transfer date.
SEC. 1205. TRANSFER DATE.
(a) In General.--Except as provided in subsection (b), the date for
the transfer of functions to the Office of the Comptroller of the
Currency and the Corporation under section 1204 shall be 1 year after
the date of enactment of this Act.
(b) Extension Permitted.--
(1) Notice required.--The Secretary, in consultation with
the Comptroller of the Currency and the Director of the Office
of Thrift Supervision, may designate a calendar date for the
transfer of functions of the Office of Thrift Supervision to
the Office of the Comptroller of the Currency, and the
Corporation under section 1204 that is later than 1 year after
the date of enactment of this Act if the Secretary--
(A) transmits to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives--
(i) a written determination that orderly
implementation of this title is not feasible on
the date that is 1 year after the date of
enactment of this Act;
(ii) an explanation of why an extension is
necessary for the orderly implementation of
this title; and
(iii) a description of the steps that will
be taken to effect an orderly and timely
implementation of this title within the
extended time period; and
(B) publishes notice of that designated later date
in the Federal Register.
(2) Extension limited.--In no case shall any date
designated under paragraph (1) be later than 18 months after
the date of enactment of this Act.
(3) Effect on references to ``transfer date''.--If the
Secretary takes the actions provided in paragraph (1) for
designating a date for the transfer of functions to the Office
of the Comptroller of the Currency, and the Corporation under
section 1204, references in this title to ``transfer date''
shall mean the date designated by the Secretary.
SEC. 1206. OFFICE OF THRIFT SUPERVISION ABOLISHED.
Effective 90 days after the transfer date, the position of Director
of the Office of Thrift Supervision and the Office of Thrift
Supervision are abolished.
SEC. 1207. SAVINGS PROVISIONS.
(a) Office of Thrift Supervision.--
(1) Existing rights, duties, and obligations not
affected.--Sections 1204(a)(1) and 1206 shall not affect the
validity of any right, duty, or obligation of the United
States, the Director of the Office of Thrift Supervision, the
Office of Thrift Supervision, or any other person, that existed
on the day before the transfer date.
(2) Continuation of suits.--This Act shall not abate any
action or proceeding commenced by or against the Director of
the Office of Thrift Supervision or the Office of Thrift
Supervision before the transfer date, except that--
(A) for any action or proceeding arising out of a
function of the Director of the Office of Thrift
Supervision transferred to the Comptroller of the
Currency by this title, the Comptroller of the Currency
or the Office of the Comptroller of the Currency shall
be substituted for the Director of the Office of Thrift
Supervision or the Office of Thrift Supervision, as the
case may be, as a party to the action or proceeding as
of the transfer date; or
(B) for any action or proceeding arising out of a
function of the Director of the Office of Thrift
Supervision transferred to the Corporation by this
title, the Chairman of the Corporation shall be
substituted for the Director of the Office of Thrift
Supervision as a party to the action or proceeding as
of the transfer date.
(b) Continuation of Existing OTS Orders, Resolutions,
Determinations, Agreements, Regulations, etc.--All orders, resolutions,
determinations, agreements, and regulations, interpretative rules,
other interpretations, guidelines, procedures, and other advisory
materials, that have been issued, made, prescribed, or allowed to
become effective by the Office of Thrift Supervision, or by a court of
competent jurisdiction, in the performance of functions that are
transferred by this title and that are in effect on the day before the
transfer date, shall continue in effect according to the terms of those
orders, resolutions, determinations, agreements, and regulations,
interpretative rules, other interpretations, guidelines, procedures,
and other advisory materials, and shall be enforceable by or against--
(1) the Office of the Comptroller of the Currency, in the
case of a function of the Director of the Office of Thrift
Supervision transferred to the Comptroller of the Currency,
until modified, terminated, set aside, or superseded in
accordance with applicable law by the Office of the Comptroller
of the Currency, by any court of competent jurisdiction, or by
operation of law; or
(2) the Corporation, in the case of a function of the
Director of the Office of Thrift Supervision transferred to the
Corporation, until modified, terminated, set aside, or
superseded in accordance with applicable law by the
Corporation, by any court of competent jurisdiction, or by
operation of law.
(c) Identification of Regulations Continued.--
(1) By office of the comptroller of the currency.--Not
later than the transfer date, the Comptroller of the Currency
shall--
(A) after consultation with the Chairperson of the
Corporation, identify the regulations continued under
subsection (c) that will be enforced by the Office of
the Comptroller of the Currency; and
(B) publish a list of such regulations in the
Federal Register.
(2) By the corporation.--Not later than the transfer date,
the Corporation shall--
(A) after consultation with the Office of the
Comptroller of the Currency, identify the regulations
continued under subsection (c) that will be enforced by
the Corporation; and
(B) publish a list of such regulations in the
Federal Register.
(d) Status of Regulations Proposed or Not Yet Effective.--
(1) Proposed regulations.--Any proposed regulation of the
Office of Thrift Supervision, which that agency, in performing
functions transferred by this title, has proposed before the
transfer date but has not published as a final regulation
before that date, shall be deemed to be a proposed regulation
of the Office of the Comptroller of the Currency, or the
Corporation, as appropriate, according to its terms.
(2) Regulations not yet effective.--Any interim or final
regulation of the Office of Thrift Supervision, which that
agency, in performing functions transferred by this title, has
published before the transfer date but which has not become
effective before that date, shall become effective as a
regulation of the Office of the Comptroller of the Currency, or
the Corporation, as appropriate, according to its terms.
SEC. 1208. REGULATIONS AND ORDERS.
In addition to any powers transferred to the Comptroller of the
Currency by this title, the Comptroller of the Currency may prescribe
such regulations and issue such orders as the Comptroller of the
Currency determines to be appropriate to carry out this title and the
powers and duties transferred to the Comptroller of the Currency by
this title.
SEC. 1209. COORDINATION OF TRANSITION ACTIVITIES.
Before the transfer date, the Comptroller of the Currency shall--
(1) consult and cooperate with the Office of Thrift
Supervision to facilitate the orderly transfer of functions to
the Comptroller of the Currency;
(2) determine and redetermine, from time to time--
(A) the amount of funds necessary to pay any
expenses associated with the transfer of functions
(including expenses for personnel, property, and
administrative services) during the period beginning on
the date of enactment of this Act and ending on the
transfer date;
(B) what personnel are appropriate to facilitate
the orderly transfer of functions by this title; and
(C) what property and administrative services are
necessary to support the Office of the Comptroller of
the Currency during the period beginning on the date of
enactment of this Act and ending on the transfer date;
and
(3) take such actions as may be necessary to provide for
the orderly implementation of this title.
SEC. 1210. INTERIM RESPONSIBILITIES OF OFFICE OF THE COMPTROLLER OF THE
CURRENCY AND OFFICE OF THRIFT SUPERVISION.
(a) In General.--When requested by the Comptroller of the Currency
to do so before the transfer date, the Office of Thrift Supervision
shall--
(1) pay to the Comptroller of the Currency, from funds
obtained by the Office of Thrift Supervision through
assessments, fees, or other charges that the Office of Thrift
Supervision is authorized by law to impose, such amounts that
the Comptroller of the Currency determines to be necessary
under section 1209(2)(A);
(2) detail to the Office of the Comptroller of the Currency
such personnel as the Comptroller of the Currency determines to
be appropriate under section 1209(2)(B); and
(3) make available to the Office of the Comptroller of the
Currency such property and provide the Office of the
Comptroller of the Currency such administrative services as the
Comptroller of the Currency determines to be necessary under
section 1209(2)(C).
(b) Notice Required.--The Comptroller of the Currency shall give
the Office of Thrift Supervision reasonable prior notice of any request
that the Office of the Comptroller of the Currency intends to make
under subsection (a).
SEC. 1211. EMPLOYEES TRANSFERRED.
(a) In General.--
(1) OTS employees.--
(A) In general.--All employees of the Office of
Thrift Supervision shall be transferred to either the
Comptroller of the Currency or the Corporation for
employment.
(B) Allocating employees for transfer to receiving
agencies.--The Director of the Office of Thrift
Supervision, the Comptroller of the Currency, and the
Chairperson of the Corporation shall--
(i) jointly determine the number of
employees of the Office of Thrift Supervision
necessary to perform or support--
(I) the functions of the Office of
Thrift Supervision that are transferred
to the Office of the Comptroller of the
Currency by this title; and
(II) the functions of the Office of
Thrift Supervision that are transferred
to the Corporation by this title; and
(ii) consistent with the numbers determined
under clause (ii), jointly identify employees
of the Office of Thrift Supervision for
transfer to the Office of the Comptroller of
the Currency or the Corporation in a manner
that the Director of the Office of Thrift
Supervision, the Comptroller of the Currency,
and the Chairperson of the Corporation, in
their discretion, deem equitable.
(2) Transfer of employees performing consumer financial
protection functions.--Nothing in paragraph (1) shall affect
the transfer of employees performing or supporting consumer
financial protection functions of the Comptroller of the
Currency and the Director of the Office of Thrift Supervision
to the Consumer Financial Protection Agency as provided in the
Consumer Financial Protection Agency Act of 2009.
(3) Appointment authority for excepted service
transferred.--
(A) In general.--In the case of employees occupying
positions in the excepted service, any appointment
authority established pursuant to law or regulations of
the Office of Personnel Management for filling such
positions shall be transferred, subject to subparagraph
(B).
(B) Declining transfers allowed.--The Office of the
Comptroller of the Currency and the Corporation may
decline to accept a transfer of authority under
subparagraph (A) (and the employees appointed pursuant
thereto) to the extent that such authority relates to
positions excepted from the competitive service because
of their confidential, policy-making, policy-
determining, or policy-advocating character.
(b) Timing of Transfers and Position Assignments.--Each employee to
be transferred under this section shall--
(1) be transferred not later than 90 days after the
transfer date; and
(2) receive notice of his or her position assignment not
later than 120 days after the effective date of his or her
transfer.
(c) Transfer of Function.--
(1) In general.--Notwithstanding any other provision of
law, the transfer of employees shall be deemed a transfer of
functions for the purpose of section 3503 of title 5, United
States Code.
(2) Priority of this act.--If any provision of this title
conflicts with any protection provided to transferred employees
under section 3503 of title 5, United States Code, the
provisions of this title shall control.
(d) Employees' Status and Eligibility.--The transfer of functions
and employees under this title, and the abolition of the Office of
Thrift Supervision, shall not affect the status of the transferred
employees as employees of an agency of the United States under any
provision of law.
(e) Equal Status and Tenure Positions.--Each employee transferred
from the Office of Thrift Supervision shall be placed in a position at
either the Office of the Comptroller of the Currency or the Corporation
with the same status and tenure as he or she held on the day before the
transfer date.
(f) No Additional Certification Requirements.--Examiners
transferred to the Office of the Comptroller of the Currency or the
Corporation shall not be subject to any additional certification
requirements before being placed in a comparable examiner's position at
the Office of the Comptroller of the Currency or the Corporation
examining the same types of institutions as they examined before they
were transferred.
(g) Personnel Actions Limited.--
(1) 1-year protection.--Except as provided in paragraph
(2), each employee transferred from the Office of Thrift
Supervision holding a permanent position on the day before the
transfer date shall not, during the 1-year period beginning on
the transfer date, be involuntarily separated, or involuntarily
reassigned outside his or her locality pay area as defined by
the Office of Personnel Management.
(2) Exceptions.--Paragraph (1) does not limit the right of
the Office of the Comptroller of the Currency or the
Corporation to--
(A) separate an employee for cause or for
unacceptable performance; or
(B) terminate an appointment to a position excepted
from the competitive service because of its
confidential policy-making, policy-determining, or
policy-advocating character.
(h) Pay.--
(1) 1-year protection.--Except as provided in paragraph
(2), each employee transferred from the Office of Thrift
Supervision shall, during the 1-year period beginning on the
transfer date, receive pay at a rate not less than the basic
rate of pay (including any geographic differential) that the
employee received during the 1-year period immediately before
the transfer.
(2) Exceptions.--Paragraph (1) does not limit the right of
the Office of the Comptroller of the Currency or the
Corporation to reduce a transferred employee's rate of basic
pay--
(A) for cause;
(B) for unacceptable performance; or
(C) with the employee's consent.
(3) Protection only while employed.--Paragraph (1) applies
to a transferred employee only while that employee remains
employed by the Office of the Comptroller of the Currency or
the Corporation.
(4) Pay increases permitted.--Paragraph (1) does not limit
the authority of the Office of the Comptroller of the Currency
or the Corporation to increase a transferred employee's pay.
(i) Benefits.--
(1) Retirement benefits for transferred employees.--
(A) In general.--
(i) Continuation of existing retirement
plan.--Each employee transferred from the
Office of Thrift Supervision may remain
enrolled in his or her existing retirement plan
or plans as long as he or she remains employed
by the Office of the Comptroller of the
Currency.
(ii) Employer's contribution.--The Office
of the Comptroller of the Currency or the
Corporation shall pay any employer
contributions to the existing retirement plan
of each employee transferred from the Office of
Thrift Supervision as required under that plan.
(B) Definition.--For purposes of this paragraph,
the term ``existing retirement plan'' means, with
respect to any employee transferred under this section,
the particular retirement plan (including the Financial
Institutions Retirement Fund) and any associated thrift
savings plan of the agency from which the employee was
transferred, which the employee was enrolled in on the
day before the transfer date.
(2) Benefits other than retirement benefits.--
(A) During 1st year.--
(i) Existing plans continue.--Each
transferred employee may, for 1 year after the
transfer date, retain membership in any other
employee benefit program of the Office of
Thrift Supervision, including a dental, vision,
long-term care, or life insurance program, to
which the employee belonged on the day before
the transfer date.
(ii) Employer's contribution.--The Office
of the Comptroller of the Currency or the
Corporation shall pay any employer cost in
continuing to extend coverage in the benefit
program to the employee as required under that
program or negotiated agreements.
(B) Dental, vision, or life insurance after 1st
year.--If, after the 1-year period beginning on the
transfer date, the Office of the Comptroller of the
Currency or the Corporation decides not to continue
participation in any dental, vision, or life insurance
program of the Office of Thrift Supervision, an
employee transferred from the Office of Thrift
Supervision pursuant to this title who is a member of
such a program may, before the decision of the Office
of the Comptroller of the Currency or the Corporation
takes effect, elect to enroll, without regard to any
regularly scheduled open season, in--
(i) the enhanced dental benefits program
established by chapter 89A of title 5, United
States Code;
(ii) the enhanced vision benefits
established by chapter 89B of title 5, United
States Code; and
(iii) the Federal Employees Group Life
Insurance Program established by chapter 87 of
title 5, United States Code, without regard to
any requirement of insurability.
(C) Long-term care insurance after 1st year.--If,
after the 1-year period beginning on the transfer date,
the Office of the Comptroller of the Currency or the
Corporation decides not to continue participation in
any long-term care insurance program of the Office of
Thrift Supervision, an employee transferred from the
Office of Thrift Supervision pursuant to this title who
is a member of such a program may, before the decision
of the Office of the Comptroller of the Currency or the
Corporation takes effect, elect to apply for coverage
under the Federal Long-Term Care Insurance Program
established by chapter 90 of title 5, United States
Code, under the underwriting requirements applicable to
a new active workforce member (as defined in part 875,
title 5, Code of Federal Regulations).
(D) Employee's contribution.--
(i) In general.--Subject to clause (ii), an
individual enrolled in the Federal Employees
Health Benefits program under this subparagraph
shall pay any employee contribution required by
the plan.
(ii) Cost differential.--The difference in
costs between the benefits that the Office of
Thrift Supervision is providing on the date of
enactment of this Act and the benefits provided
by this section shall be paid by the
Comptroller of the Currency or the Corporation.
(iii) Funds transfer.--The Office of the
Comptroller of the Currency or the Corporation
shall transfer to the Federal Employees Health
Benefits Fund established under section 8909 of
title 5, United States Code, an amount
determined by the Director of the Office of
Personnel Management, after consultation with
the Office of the Comptroller of the Currency
or the Corporation and the Office of Management
and Budget, to be necessary to reimburse the
Fund for the cost to the Fund of providing
benefits under this subparagraph not otherwise
paid for by the employee under clause (i).
(E) Special provisions to ensure continuation of
life insurance benefits.--
(i) In general.--An annuitant (as defined
in section 8901(3) of title 5, United States
Code) who is enrolled in a life insurance plan
administered by the Office of Thrift
Supervision on the day before the transfer date
shall be eligible for coverage by a life
insurance plan under sections 8706(b), 8714a,
8714b, and 8714c of title 5, United States
Code, or in a life insurance plan established
by the Office of the Comptroller of the
Currency or the Corporation, without regard to
any regularly scheduled open season and
requirement of insurability.
(ii) Employee's contribution.--
(I) In general.--Subject to
subclause (II), an individual enrolled
in a life insurance plan under this
clause shall pay any employee
contribution required by the plan.
(II) Cost differential.--The
difference in costs between the
benefits that the Office of Thrift
Supervision is providing on the date of
enactment of this Act and the benefits
provided by this section shall be paid
by the Comptroller of the Currency or
the Corporation.
(III) Funds transfer.--The Office
of the Comptroller of the Currency or
the Corporation shall transfer to the
Employees' Life Insurance Fund
established under section 8714 of title
5, United States Code, an amount
determined by the Director of the
Office of Personnel Management, after
consultation with the Office of the
Comptroller of the Currency or the
Corporation and the Office of
Management and Budget, to be necessary
to reimburse the Fund for the cost to
the Fund of providing benefits under
this subparagraph not otherwise paid
for by the employee under subclause
(I).
(IV) Credit for time enrolled in
other plans.--For employees transferred
under this section, enrollment in a
life insurance plan administered by the
Office of the Comptroller of the
Currency, the Office of Thrift
Supervision, or the Corporation
immediately before enrollment in a life
insurance plan under chapter 87 of
title 5, United States Code, shall be
considered as enrollment in a life
insurance plan under that chapter for
purposes of section 8706(b)(1)(A) of
title 5, United States Code.
(j) Equitable Treatment.--In administering the provisions of this
section, the Office of the Comptroller of the Currency and the
Corporation--
(1) shall take no action that would unfairly disadvantage
transferred employees relative to other employees of the Office
of the Comptroller of the Currency based on their prior
employment by the Office of Thrift Supervision;
(2) may take such action as is appropriate in individual
cases so that employees transferred under this section receive
equitable treatment, with respect to those employees' status,
tenure, pay, benefits (other than benefits under programs
administered by the Office of Personnel Management), and
accrued leave or vacation time, for prior periods of service
with any Federal agency.
SEC. 1212. PROPERTY TRANSFERRED.
(a) In General.--Not later than 90 days after the transfer date,
all property of the Office of Thrift Supervision shall be transferred
to the Office of the Comptroller of the Currency or the Corporation,
allocated in a manner consistent with section 1211(a).
(b) Contracts Related to Property Transferred.--All contracts,
agreements, leases, licenses, permits, and similar arrangements
relating to property transferred to the Office of the Comptroller of
the Currency or the Corporation by this section shall be transferred to
the Office of the Comptroller of the Currency or the Corporation
together with that property.
(c) Preservation of Property.--Property identified for transfer
under this section shall not be altered, destroyed, or deleted before
transfer under this section.
(d) Property Defined.--For purposes of this section, the term
``property'' includes all real property (including leaseholds) and all
personal property (including computers, furniture, fixtures, equipment,
books, accounts, records, reports, files, memoranda, paper, reports of
examination, work papers and correspondence related to such reports,
and any other information or materials).
SEC. 1213. FUNDS TRANSFERRED.
Except to the extent needed to dispose of affairs under section
1214, all funds that, on the day before the transfer date, are
available to the Director of the Office of Thrift Supervision to pay
the expenses of the Office of Thrift Supervision shall be transferred
to the Office of the Comptroller of the Currency or the Corporation,
allocated in a manner consistent with section 1211(a), on the transfer
date.
SEC. 1214. DISPOSITION OF AFFAIRS.
(a) In General.--During the 90-day period beginning on the transfer
date, the Director of the Office of Thrift Supervision--
(1) shall, solely for the purpose of winding up the affairs
of the agency related to any function transferred to the Office
of the Comptroller of the Currency or the Corporation by this
title--
(A) manage any employees of the Office of Thrift
Supervision and provide for the payment of the
compensation and benefits of any such employees that
accrue before the transfer date; and
(B) manage any property of the Office of Thrift
Supervision until the property is transferred under
section 1212; and
(2) may take any other action necessary to wind up the
affairs of the Office of Thrift Supervision relating to the
transferred functions.
(b) Authority and Status of Director.--
(1) In general.--Notwithstanding the transfers of functions
under this title, the Director of the Office of Thrift
Supervision shall, during the 90-day period beginning on the
transfer date, retain and may exercise any authority vested in
the Director on the day before the transfer date that is
necessary to carry out the requirements of this title during
that period.
(2) Other provisions.--For purposes of paragraph (1), the
Director of the Office of Thrift Supervision shall, during the
90-day period beginning on the transfer date, continue to be--
(A) treated as an officer of the United States; and
(B) entitled to receive compensation at the same
annual rate of basic pay that he or she was receiving
on the day before the transfer date.
SEC. 1215. CONTINUATION OF SERVICES.
Any agency, department, or other instrumentality of the United
States, and any successor to any such agency, department, or
instrumentality, that was, before the transfer date, providing support
services to the Office of Thrift Supervision in connection with
functions to be transferred to the Office of the Comptroller of the
Currency, shall--
(1) continue to provide those services, subject to
reimbursement, until the transfer of those functions is
complete; and
(2) consult with any such agency to coordinate and
facilitate a prompt and orderly transition.
SEC. 1216. TREATMENT OF SAVINGS AND LOAN HOLDING COMPANIES.
(a) Section 2 of the Home Owners' Loan Act (12 U.S.C. 1462) is
amended in paragraph (1) by striking ``Director.--The term `Director'
means the Director of the Office of Thrift Supervision'' and inserting
``Comptroller.--The term `Comptroller' means the Comptroller of the
Currency''.
(b) Section 10 of the Home Owners' Loan Act (12 U.S.C. 1467a) is
amended as follows:
(1) In subsection (a)(1)(A) by striking ``Director'' and
inserting ``Comptroller of the Currency'';
(2) In subsection (m) as follows:
(A) in paragraph (2) by striking ``Director'' and
inserting ``Comptroller'';
(B) in paragraph (2) by striking ``Director may
grant'' and inserting ``Comptroller of the Currency may
grant'';
(C) in paragraph (2) by striking ``the Director
deems'' and inserting ``the Comptroller deems'';
(D) in paragraph (2)(A) by striking ``Director''
and inserting ``Comptroller'';
(E) in paragraph (2)(B) by striking ``Director''
and inserting ``Comptroller'';
(F) in paragraph (2)(B)(iii) by striking
``Director'' and inserting ``Comptroller'';
(G) in paragraph (4)(D) by striking ``Director''
and inserting ``Comptroller'';
(H) in paragraph (4)(E) by striking ``Director''
and inserting ``Comptroller''; and
(I) in paragraph (7)(B) by striking ``Director''
and inserting ``Comptroller'';
(3) In subsection (o) as follows:
(A) in paragraph (3) in the heading by striking
``Director'' and inserting ``Board'';
(B) in paragraph (3)(A) by striking ``Director''
and inserting ``Board'';
(C) in paragraph (3)(B) by striking ``Director''
and inserting ``Board'';
(D) in paragraph (3)(C) by striking ``Director''
and inserting ``Board'';
(E) in paragraph (3)(D) by striking ``Director''
and inserting ``Comptroller'';
(F) in paragraph (7) by striking ``chartered by the
Director'' and inserting ``chartered by the
Comptroller''; and
(G) in paragraph (7) by striking ``regulations as
the Director may'' and inserting ``regulations as the
Board may''; and
[(4) by striking subsections ``(a)'' through ``(n)'', and
``(p)'' through ``(t)'', and redesignating current subsections
``(m)'' and ``(o)'' as ``(a)'' and ``(b)'', respectively.]
SEC. 1217. PRACTICES OF CERTAIN MUTUAL THRIFT HOLDING COMPANIES
PRESERVED.
(a) Treatment of Dividends by Certain Mutual Holding Companies.--
Section 3(g) of the Bank Holding Company Act (12 U.S.C. 1842(g)) is
amended by inserting new paragraphs (3) through (7) as follows:
``(3) Declaration of dividends.--Every subsidiary savings
association of a mutual holding company shall give the Board
not less than 30 days' advance notice of the proposed
declaration by its directors of any dividend on its guaranty,
permanent, or other nonwithdrawable stock. Such notice period
shall commence to run from the date of receipt of such notice
by the Board. Any such dividend declared within such period, or
without the giving of such notice to the Board, shall be
invalid and shall confer no rights or benefits upon the holder
of any such stock.
``(4) Waiver of dividends.--Any mutual thrift holding
company organized under section 10(b) of the Home Owners' Loan
Act shall be permitted to waive such company's right to receive
any dividend declared by a subsidiary, if--
``(A) no insider of the mutual holding company,
associate of an insider, or tax-qualified or non-tax-
qualified employee stock benefit plan of the mutual
holding company holds any share of the stock in the
class of stock to which the waiver would apply;
``(B) the mutual holding company provides the Board
with written notice of its intent to waive its right to
receive dividends 30 days prior to the proposed date of
payment of the dividend; and
``(C) the Board does not object.
``(5) Standards for waiver of dividend.--The Board shall
not object to a notice of intent to waive dividends under
paragraph (4) if--
``(A) the waiver would not be detrimental to the
safe and sound operation of the savings association;
and
``(B) the board of directors of the mutual holding
company expressly determines that a waiver of the
dividend by the mutual holding company is consistent
with the directors' fiduciary duties to the mutual
members of such company.
``(6) Resolution included in waiver notice.--A dividend
waiver notice shall include a copy of the resolution of the
board of directors of the mutual holding company, in form and
substance satisfactory to the Board, together with any
supporting materials relied upon by the board of directors,
concluding that the proposed dividend waiver is consistent with
the board of director's fiduciary duties to the mutual members
of the mutual holding company.
``(7) Valuation.--The Board will not consider waived
dividends in determining an appropriate exchange ratio in the
event of a full conversion to stock form.''.
SEC. 1218. COMPOSITION OF BOARD OF DIRECTORS OF THE FEDERAL DEPOSIT
INSURANCE CORPORATION.
Section 2 of the Federal Deposit Insurance Act (12 U.S.C. 1812) is
amended--
(1) in subsection (a)(1)--
(A) in subparagraph (B), by striking ``Director of
the Office of Thrift Supervision'' and inserting
``Chairman of the Board of Governors of the Federal
Reserve System, or such other member of the Board of
Governors as the Chairman of the Board of Governors
shall designate'';
(2) by amending subsection (d)(2) to read as follows:
``(2) Acting officials may serve.--In the event of a
vacancy in the office of the Comptroller of the Currency and
pending the appointment of a successor, or during the absence
or disability of the Comptroller of the Currency, the acting
Comptroller of the Currency shall be a member of the Board of
Directors in the place of the Comptroller of the Currency.'';
and
(3) in subsection (f)(2), by striking ``or of the Office of
Thrift Supervision''.
SEC. 1219. AMENDMENTS TO SECTION 3.
Section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) is
amended--
(1) in subsection (b)(1)(C) (relating to the definition of
the term ``savings association''), by striking ``Director of
the Office of Thrift Supervision'' and inserting ``Comptroller
of the Currency'';
(2) in subsection (l)(5) (relating to the definition of the
term ``deposit''), in the introductory text, by striking ``,
Director of the Office of Thrift Supervision,'' and inserting
``, and'';
(3) in subsection (q) (relating to the definition of the
term ``appropriate Federal banking agency'')--
(A) by amending paragraph (1) to read as follows:
``(1) the Comptroller of the Currency, in the case of any
national bank, any Federal branch or agency of a foreign bank,
or any savings association or savings and loan holding
company;'';
(B) in paragraph (2)(F), by adding ``and'' at the
end after the semicolon;
(C) in paragraph (3), by striking ``; and'' and
inserting a period;
(D) by amending paragraph (3) to read as follows:
``(3) the Federal Deposit Insurance Corporation in the case
of a State nonmember insured bank, State savings association,
or a foreign bank having an insured branch.''; and
(E) by striking paragraph (4); and
(4) in subsection (z) (relating to the definition of the
term ``Federal banking agency''), by striking ``the Director of
the Office of Thrift Supervision,''.
SEC. 1220. AMENDMENTS TO SECTION 7.
Section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. 1817)
is amended--
(1) in paragraph (2)--
(A) in subparagraph (A)--
(i) in the first sentence, by striking
``the Director of the Office of Thrift
Supervision''; and
(ii) in the second sentence, by striking
``the Director of the Office of Thrift
Supervision''; and
(B) in subparagraph (B), by striking ``Comptroller
of the Currency, the Board of Governors of the Federal
Reserve System, and the Director of the Office of
Thrift Supervision,'' and inserting ``Comptroller of
the Currency and the Board of Governors of the Federal
Reserve System,'';
(2) in paragraph (3), in the first sentence, by striking
``Comptroller of the Currency, the Chairman of the Board of
Governors of the Federal Reserve System, and the Director of
the Office of Thrift Supervision'' and inserting ``Comptroller
of the Currency and the Chairman of the Board of Governors of
the Federal Reserve System''; and
(3) in paragraph (7), by striking ``Director of the Office
of Thrift Supervision,''.
SEC. 1221. AMENDMENTS TO SECTION 8.
Section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) is
amended--
(1) in subsection (a)(8)(B)(ii), in the last sentence--
(A) by striking ``Director of the Office of Thrift
Supervision'' each place it appears and inserting
``Comptroller of the Currency''; and
(B) by inserting ``the Office of Thrift
Supervision, as successor to'' after ``as a successor
to'' and before ``the Federal Savings and Loan
Insurance Corporation'';
(2) in subsection (o)--
(A) by striking ``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of the
Currency''; and
(3) in subsection (w)(3)(A), by striking ``Office of Thrift
Supervision'' and inserting ``Office of the Comptroller of the
Currency''.
SEC. 1222. AMENDMENTS TO SECTION 11.
Section 11 of the Federal Deposit Insurance Act (12 U.S.C. 1821) is
amended--
(1) in subsection (c)(6) --
(A) in the heading, by striking ``Director of the
office of thrift supervision'' and inserting
``Comptroller of the currency'';
(B) in subparagraph (A), by striking ``Director of
the Office of Thrift Supervision'' and inserting
``Comptroller of the Currency''; and
(C) in subparagraph (B), by striking ``Director of
the Office of Thrift Supervision'' and inserting
``Comptroller of the Currency''; and
(2) in subsection (d)--
(A) in paragraph (2)(F)(i), by striking ``Director
of the Office of Thrift Supervision'' and inserting
``Comptroller of the Currency'';
(B) in paragraph (17)(A)--
(i) by striking ``Comptroller of the
Currency''; and
(ii) by striking ``appropriate''; and
(C) in paragraph (18)(B), by striking ``or the
Director of the Office of Thrift Supervision''.
SEC. 1223. AMENDMENTS TO SECTION 13.
Section 13(k)(1)(A)(iv) of the Federal Deposit Insurance Act (12
U.S.C. 1823(k)(1)(A)(iv)) is amended by striking ``Director of the
Office of Thrift Supervision'' and inserting ``Comptroller of the
Currency''.
SEC. 1224. AMENDMENTS TO SECTION 18.
Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is
amended--
(1) in subsection (c)(2)--
(A) in subparagraph (A), by striking ``bank;'' and
inserting ``bank or a savings association;'';
(B) in subparagraph (B), by inserting ``and'' at
the end after the semicolon;
(C) in subparagraph (C), by striking ``bank (except
a savings bank supervised by the Director of the Office
of Thrift Supervision); and'' and inserting ``bank or
State savings association.''; and
(D) by striking subparagraph (D);
(2) in subsection (g)(1), by striking ``Director of the
Office of Thrift Supervision'' and inserting ``Comptroller of
the Currency'';
(3) in subsection (i)(2)--
(A) by striking subparagraph (B) and inserting the
following new subparagraph:
``(B) the Corporation, if the resulting institution
is to be a State nonmember insured bank or insured
State savings association.''; and
(B) by striking subparagraph (C);
(4) in subsection (m)--
(A) in paragraph (1)--
(i) in subparagraph (A), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency''; and
(ii) in subparagraph (B), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency'';
(B) in paragraph (2)--
(i) in subparagraph (A), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency''; and
(ii) in subparagraph (B), by striking
``Director of the Office of Thrift
Supervision'' each place it appears and
inserting ``Comptroller of the Currency''; and
(C) in paragraph (3)--
(i) in subparagraph (A), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency''; and
(ii) in subparagraph (B), by striking
``Office of Thrift Supervision'' and inserting
``Comptroller of the Currency''.
SEC. 1225. AMENDMENTS TO SECTION 28.
Section 28 of the Federal Deposit Insurance Act (12 U.S.C. 1831e)
is amended--
(1) in subsection (e)--
(A) in paragraph (2)--
(i) in subparagraph (A)(ii), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency'';
(ii) in subparagraph (C), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency''; and
(iii) in subparagraph (F), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency''; and
(B) in paragraph (3)--
(i) in subparagraph (A), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency''; and
(ii) in subparagraph (B), by striking
``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of
the Currency''; and
(2) in subsection (h)(2), by striking ``Director of the
Office of Thrift Supervision'' and inserting ``Comptroller of
the Currency''.
SEC. 1226. AMENDMENTS TO THE ALTERNATIVE MORTGAGE TRANSACTION PARITY
ACT OF 1982.
(a) Amendments to Section 802.--Section 802(a)(3) of the
Alternative Mortgage Transaction Parity Act of 1982 (12 U.S.C. 3801) is
amended--
(1) by striking ``Comptroller of the Currency,'' and
inserting ``Comptroller of the Currency and''; and
(2) by striking ``, and the Director of the Office of
Thrift Supervision''.
(b) Amendments to Section 804.--Section 804(a) of the Alternative
Mortgage Transaction Parity Act of 1982 (12 U.S.C. 3803) is amended--
(1) by amending paragraph (1) to read as follows:
``(1) with respect to banks, savings associations, mutual
savings banks, and savings banks, only to transactions made in
accordance with regulations governing alternative mortgage
transactions as prescribed by the Comptroller of the Currency
to the extent that such regulations are authorized by
rulemaking authority granted to the Comptroller of the Currency
under laws other than this section.''; and
(2) by striking paragraph (3).
SEC. 1227. AMENDMENTS TO THE BANK HOLDING COMPANY ACT OF 1956.
Section 4(f)(12)(A) of the Bank Holding Company Act of 1956 (12
U.S.C. 1843) is amended striking ``Resolution Trust Corporation''.
SEC. 1228. AMENDMENTS TO THE BANK PROTECTION ACT OF 1968.
Section 2 of the Bank Protection Act of 1968 (12 U.S.C. 1881) is
amended--
(1) in paragraph (1), by striking ``national banks,'' and
inserting ``national banks and federal savings associations.'';
(2) in paragraph (2), by inserting ``and'' at the end;
(3) in paragraph (3), by striking ``, and'' at the end and
inserting a period; and
(4) by striking paragraph (4).
SEC. 1229. AMENDMENTS TO THE BANK SERVICE COMPANY ACT.
Section 1(b) of the Bank Service Company Act (12 U.S.C. 1861(b)) is
amended--
(1) in paragraph (4), by striking ``insured bank,'' and
inserting ``insured bank or'';
(2) by striking ``Office of Thrift Supervision'' and
inserting ``Office of the Comptroller of the Currency''; and
(3) by striking ``, the Federal Savings and Loan Insurance
Corporation,''.
SEC. 1230. AMENDMENTS TO THE COMMUNITY REINVESTMENT ACT OF 1977.
Section 803(1) of the Community Reinvestment Act of 1977 (12 U.S.C.
2902(1)) is amended--
(1) in subparagraph (A), by striking ``national banks'' and
inserting ``national banks or savings associations (the
deposits of which are insured by the Federal Deposit Insurance
Corporation)'';
(2) in subparagraph (B), by striking ``and bank holding
companies;'' and inserting ``, bank holding companies and
savings and loan holding companies;''; and
(3) by striking subparagraph (D).
SEC. 1231. AMENDMENTS TO THE DEPOSITORY INSTITUTION MANAGEMENT
INTERLOCKS ACT.
(a) Amendment to Section 207.--Section 207 of the Depository
Institution Management Interlocks Act (12 U.S.C. 3206) is amended--
(1) in paragraph (1), by striking ``national banks,'' and
inserting ``national banks and Federal savings associations
(the deposits of which are insured by the Federal Deposit
Insurance Corporation),'';
[(2) in paragraph (2), by striking ``and bank holding
companies,'' and inserting ``, bank holding companies, and
savings and loan holding companies,'';]
(3) by striking paragraph (4); and
(4) by redesignating paragraphs (5) and (6) as paragraphs
(4) and (5), respectively.
(b) Amendment to Section 209.--Section 209 of the Depository
Institution Management Interlocks Act (12 U.S.C. 3207) is amended--
(1) in paragraph (1), by striking ``national banks,'' and
inserting ``national banks and Federal savings associations
(the deposits of which are insured by the Federal Deposit
Insurance Corporation),'';
(2) in paragraph (2), by striking ``and bank holding
companies,'' and inserting ``, bank holding companies, and
savings and loan holding companies,'';
(3) at the end of paragraph (3), by inserting ``and'' after
the comma;
(4) by striking paragraph (4); and
(5) by redesignating paragraph (5) as paragraph (4).
(c) Amendment to Section 210.--Subsection 210(a) of the Depository
Institution Management Interlocks Act (12 U.S.C. 3208(a)) is amended--
(1) by striking ``his'' and inserting ``the''; and
(2) by inserting ``of the attorney General'' after
``enforcement functions''.
SEC. 1232. AMENDMENTS TO THE EMERGENCY HOMEOWNER'S RELIEF ACT.
Section 110 of the Emergency Homeowner's Relief Act (12 U.S.C.
2709) is amended--
(1) by striking the ``Federal Home Loan bank Board'' and
inserting ``Federal Housing Finance Agency''; and
(2) by striking ``the Federal Savings and Loan Insurance
Corporation''.
SEC. 1233. AMENDMENTS TO THE EQUAL CREDIT OPPORTUNITY ACT.
Section 704 of the Equal Credit Opportunity Act (15 U.S.C. 1691c)
is amended in subsection (a)--
(1) in paragraph (1)(A), by striking ``and Federal branches
and Federal agencies of foreign banks,'' and inserting ``,
Federal branches and Federal agencies of foreign banks, or a
savings association the deposits of which are insured by the
Federal Deposit Insurance Corporation;'';
(2) by striking paragraph (2); and
(3) by redesignating paragraphs (3) through (9) as
paragraphs (2) through (8).
SEC. 1234. AMENDMENTS TO THE FEDERAL CREDIT UNION ACT.
(a) Amendments to Section 206.--Section 206(g)(7) of the Federal
Credit Union Act (12 U.S.C. 1786(g)(7)) is amended--
(1) in subparagraph (A)--
[(A) by inserting ``and'' after the semicolon at
the end of clause (v);]
(B) in clause (vi)--
(i) by striking ``Federal Housing Finance
Board'' and inserting ``Federal Housing Finance
Agency''; and
(ii) by striking ``; and'' after the
semicolon and inserting a period; and
(C) by striking clause (vii);
(2) in subparagraph (D)--
[(A) by inserting ``and'' after the semicolon at
the end of clause (iii);]
(B) by striking ``; and'' at the end of clause (iv)
and inserting a period; and
(C) striking clause (v).
SEC. 1235. AMENDMENTS TO THE FEDERAL FINANCIAL INSTITUTIONS EXAMINATION
COUNCIL ACT OF 1978.
(a) Amendment to Section 1002.--Section 1002 of the Federal
Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3301)
is amended--
(1) by striking ``Federal Home Loan Bank Board'' and
inserting ``Federal Housing Finance Agency''.
(b) Amendment to Section 1003.--Section 1003(1) of the Federal
Financial Institutions Examination Council Act of 1978 (12 U.S.C.
3302(1)) is amended by striking ``the Office of Thrift Supervision''.
(c) Amendments to Section 1004.--Section 1004(a) of the Federal
Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3303)
is amended--
(1) by striking paragraph (4); and
(2) by redesignating paragraph (5) as paragraph (4).
SEC. 1236. AMENDMENTS TO THE FEDERAL HOME LOAN BANK ACT.
(a) Amendments to Section 18.--Section 18(c) of the Federal Home
Loan Bank Act (12 U.S.C. 1438(c)) is amended--
(1) by striking ``Director of the Office of Thrift
Supervision'' each place it appears and inserting ``Comptroller
of the Currency'';
(2) in paragraph (1)(B), by striking ``and the agencies
under its administration or supervision''; and
(3) in paragraph (5), by striking ``and such agencies''.
(b) Amendments to Section 21A.--Section 21A of the Federal Home
Loan Bank Act (12 U.S.C. 1441a) is repealed.
SEC. 1237. AMENDMENTS TO THE FEDERAL RESERVE ACT.
Section 19 of the Federal Reserve Act (12 U.S.C. 461(b)) is
amended--
(1) in paragraph (1)(F), by striking ``the Director of the
Office of Thrift Supervision'' and inserting ``the Comptroller
of the Currency''; and
(2) in paragraph (4)(B), by striking ``the Director of the
Office of Thrift Supervision'' and inserting ``the Comptroller
of the Currency''.
SEC. 1238. AMENDMENTS TO THE FINANCIAL INSTITUTIONS REFORM, RECOVERY,
AND ENFORCEMENT ACT OF 1989.
(a) Amendments to Section 302.--Section 302(1) of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
1467a nt.) is amended by striking ``Director of the Office of Thrift
Supervision'' and inserting ``Comptroller of the Currency''.
(b) Amendment to Section 305.--Section 305(b)(1) of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
1464(b)(1) nt.) is amended by striking ``Director of the Office of
Thrift Supervision'' and inserting ``Comptroller of the Currency''.
(c) Amendment to Section 308.--Section 308(a) of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
1463 nt.) is amended by striking ``Director of the Office of
Supervision'' and ``Comptroller of the Currency''.
(d) Amendments to Section 402.--Section 402 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
1437 nt.) is amended--
(1) in subsection (a), by striking ``Director of the Office
of Thrift Supervision'' and inserting ``Comptroller of the
Currency'';
(2) in subsection (b), by striking ``Director of the Office
of Thrift Supervision'' and inserting ``Comptroller of the
Currency''; and
(3) in subsection (e)--
(A) in paragraph (1), by striking ``the Office of
Thrift Supervision'' and inserting ``Office of the
Comptroller of the Currency'';
(B) in paragraph (2), by striking ``Director of the
Office of Thrift Supervision'' each place it appears
and inserting ``Comptroller of the Currency'';
(C) in paragraph (3), by striking ``Director of the
Office of Thrift Supervision'' and inserting
``Comptroller of the Currency''; and
(D) in paragraph (4), by striking ``Director of the
Office of Thrift Supervision'' and inserting
``Comptroller of the Currency''.
(e) Amendment to Section 1103.--Section 1103(a) of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3332(a)) is amended by striking ``and the Resolution Trust
Corporation''.
(f) Amendments to Section 1205.--Subsection 1205(b) of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989
(12 U.S.C. 1818 nt.) is amended--
(1) in paragraph (1)--
(A) in subparagraph (B), by striking ``Director of
the Office of Thrift Supervision'' and inserting
``Comptroller of the Currency'';
(B) by striking subparagraph (D); and
(C) by redesignating subparagraphs (E) and (F) as
paragraphs (D) and (E), respectively;
(2) in paragraph (2), by striking ``paragraph (1)(F)'' and
inserting ``paragraph (1)(E)''; and
(3) in paragraph (5), by striking ``through (E)'' and
inserting ``through (D)''.
(g) Amendments to Section 1206.--Section 1206 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
1833b) is amended--
(1) by striking ``the Thrift Depositor Protection Oversight
Board of the Resolution Trust Corporation'';
(2) by inserting ``and'' after ``the Federal Housing
Finance Board'' and before ``the Farm Credit Administration'';
and
(3) by striking ``, and the Office of Thrift Supervision''.
(h) Amendments to Section 1216.--Section 1216 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
1833e) is amended--
(1) in subsection (a)--
(A) by striking paragraphs (2), (5), and (6); and
(B) by redesignating paragraphs (3), and (4), as
paragraphs (2), and (3), respectively;
(2) in subsection (c)--
(A) by striking ``the Director of the Office of
Thrift Supervision,'' and inserting ``, and''; and
(B) by striking ``the Thrift Depositor protection
Oversight Board of the Resolution Trust Corporation,
and the Resolution Trust Corporation''; and
(3) in subsection (d)--
(A) by striking paragraphs (3), (5) and (6); and
(B) by redesignating paragraphs (4), (7), and (8)
as paragraphs (3), (4), and (5), respectively.
SEC. 1239. AMENDMENTS TO THE HOUSING ACT OF 1948.
Section 502(c) of the Housing Act of 1948 (12 U.S.C. 1701c(c)) is
amended in the introductory text by striking ``Director of the Office
of Thrift Supervision'' and inserting ``Comptroller of the Currency''.
SEC. 1240. AMENDMENTS TO THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF
1992.
(a) Amendments to Section 543.--Section 543 of the Housing and
Community Development Act of 1992 (12 U.S.C. 1707 nt.) is amended--
(1) in subsection (c)(1)--
(A) by amending subparagraph (C) to read as
follows:
``(C) Comptroller of the Currency'';
(B) by striking subparagraphs (D) through (F); and
(C) by redesignating subparagraphs (G) and (H) as
subparagraphs (D) and (E), respectively; and
(2) in subsection (f)--
(A) in paragraph (2)--
(i) by striking ``the Office of Thrift
Supervision,''; and
(ii) in subparagraph (D), by striking
``Office of Thrift Supervision,'' and inserting
``Comptroller of the Currency,''; and
(B) in paragraph (3)--
(i) by striking ``the Office of Thrift
Supervision,'' and inserting ``Comptroller of
the Currency,''; and
(ii) in subparagraph (D), by striking
``Office of Thrift Supervision,'' and inserting
``Comptroller of the Currency,''.
(b) Amendment to Section 1315.--Section 1315(b) of the Housing and
Community Development Act of 1992 (12 U.S.C. 4515(b)) is amended by
striking ``the Federal Deposit Insurance Corporation, and the Office of
Thrift Supervision.'' and inserting ``and the Federal Deposit Insurance
Corporation.''.
(c) Amendment to Section 1317.--Section 1317(c) of the Housing and
Community Development Act of 1992 (12 U.S.C. 4517(c)) is amended by
striking ``the Federal Deposit Insurance Corporation, or the Director
of the Office of Thrift Supervision'' and inserting ``or the Federal
Deposit Insurance Corporation.''
SEC. 1241. AMENDMENTS TO THE HOUSING AND URBAN-RURAL RECOVERY ACT OF
1983.
Section 469 of the Housing and Urban-Rural Recovery Act of 1983 (12
U.S.C. 1701p-1) is amended in the first sentence by striking ``Federal
Home Loan Bank Board'' and inserting ``Federal Housing Finance
Agency''.
SEC. 1242. AMENDMENTS TO THE NATIONAL HOUSING ACT.
Section 203(s) of the National Housing Act (12 U.S.C. 1709(s)) is
amended--
(1) in paragraph (5), by revising the paragraph to read as
follows:
``if the mortgagee is a national bank, a subsidiary or
affiliate of such a bank, a Federal savings association or a
subsidiary or affiliate of a savings association, the
Comptroller of the Currency;''
(2) in paragraph (7) by inserting ``or State savings
association'' after ``State bank''; and
(3) by striking paragraph (8).
SEC. 1243. AMENDMENTS TO THE RIGHT TO FINANCIAL PRIVACY ACT OF 1978.
Section 11(7) of the Right to Financial Privacy Act of 1978 (12
U.S.C. 3401(7)) is amended--
(1) by striking subparagraph (B); and
(2) by redesignating subparagraphs (C) through (I) as
subparagraphs (B) through (H), respectively.
SEC. 1244. AMENDMENTS TO THE BALANCED BUDGET AND EMERGENCY DEFICIT
CONTROL ACT OF 1985.
(a) Amendments to Section 255.--Section 255(g)(1)(A) of the
Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C.
905(g)(1)(A)) is amended by striking ``Director of the Office of Thrift
Supervision''.
(b) Amendments to Section 256.--Section 256(h)(4) of the Balanced
Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 906(h)(4))
is amended--
(1) by striking subparagraphs (C) and (G); and
(2) by redesignating subparagraphs (D), (E), (F), and (H)
as subparagraphs (C) through (G), respectively.
SEC. 1245. AMENDMENTS TO THE CRIME CONTROL ACT OF 1990.
(a) Amendments to Section 2539.--Section 2539(c)(2) of the Crime
Control Act of 1990 (Public Law 101-647) is amended by striking
subparagraph (F) and redesignating subparagraphs (G) and (H) as
subparagraphs (F) through (G), respectively.
(b) Amendment to Section 2554.--Section 2554(b)(2) of the Crime
Control Act of 1990 (Public Law 101-647) is amended by striking
``Director of the Office of Thrift Supervision'' and inserting
``Comptroller of the Currency''.
SEC. 1246. AMENDMENT TO THE FLOOD DISASTER PROTECTION ACT OF 1973.
Section 3(a)(5) of the Flood Disaster Protection Act of 1973, as
amended (42 U.S.C. 4003(a)(5)) is amended by striking ``the Office of
Thrift Supervision''.
SEC. 1247. AMENDMENTS TO THE INVESTMENT COMPANY ACT OF 1940.
Section 6(a)(3) of the Investment Company Act of 1940 (15 U.S.C.
80a-6(a)(3)) is amended by striking ``Federal Savings and Loan
Insurance Corporation'' and inserting ``Comptroller of the Currency''.
SEC. 1248. AMENDMENTS TO THE NEIGHBORHOOD REINVESTMENT CORPORATION ACT.
The Neighborhood Reinvestment Corporation Act (42 U.S.C.
8105(c)(3)) is amended by striking the ``Federal Home Loan Bank Board''
and inserting ``Federal Housing Finance Agency''.
SEC. 1249. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.
(a) Amendments to Section 3.--Section 3(a)(34) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(34)) is amended--
(1) in subparagraph (A)--
(A) in clause (i), by striking ``bank;'' and
inserting ``bank, or a savings association (as defined
in section 3(b) of the Federal Deposit Insurance Act
(12 U.S.C. 1813(b))), the deposits of which are insured
by the Federal Deposit Insurance Corporation, a
subsidiary or a department or division of any such
savings association, or a savings and loan holding;'';
(B) by striking clause (iv); and
(C) by redesignating clause (v) as clause (iv);
(2) in subparagraph (B)--
(A) in clause (i), by striking ``bank;'' and
inserting ``bank, or a savings association (as defined
in section 3(b) of the Federal Deposit Insurance Act
(12 U.S.C. 1813(b))), the deposits of which are insured
by the Federal Deposit Insurance Corporation, a
subsidiary or a department or division of any such
savings association, or a savings and loan holding;'';
(B) by striking clause (iv); and
(C) by redesignating clause (v) as clause (iv);
(3) in subparagraph (C)--
(A) in clause (i), by striking ``bank;'' and
inserting ``bank, or a savings association (as defined
in section 3(b) of the Federal Deposit Insurance Act
(12 U.S.C. 1813(b))), the deposits of which are insured
by the Federal Deposit Insurance Corporation, a
subsidiary or a department or division of any such
savings association, or a savings and loan holding;'';
(B) by striking clause (iv); and
(C) by redesignating clause (v) as clause (iv); and
(4) in subparagraph (F)--
(A) in clause (i), by striking ``bank;'' and
inserting ``or a savings association (as defined in
section 3(b) of the Federal Deposit Insurance Act (12
U.S.C. 1813(b))), the deposits of which are insured by
the Federal Deposit Insurance Corporation;''
(B) by striking clause (ii); and
(C) redesignating clauses (iii), (iv), and (v) as
clauses (ii), (iii) and (iv), respectively.
(b) Amendments to Section 15c.--Section 15C of the Securities
Exchange Act of 1934 (15 U.S.C. 78o-5) is amended in subsection (g)(1)
by striking ``the Director of the Office of Thrift Supervision, the
Federal Savings and Loan Insurance Corporation,''.
SEC. 1250. AMENDMENTS TO TITLE 18, UNITED STATES CODE.
(a) Amendment to Section 212.--Section 212(c)(2) of title 18,
United States Code, is amended--
(1) by striking subparagraph (C); and
(2) by redesignating subparagraphs (D) through (H) as
subparagraphs (C) through (G), respectively.
(b) Amendment to Section 657.--Section 657 of title 18, United
States Code, is amended by striking ``Office of Thrift Supervision, the
Resolution Trust Corporation''.
(c) Amendment to Section 981.--Section 981(a)(1)(D) of title 18,
United States Code, is amended--
(1) by striking ``Resolution Trust Corporation''; and
(2) by striking ``or the Office of Thrift Supervision''.
(d) Amendment to Section 982.--Section 982(a)(3) of title 18,
United States Code, is amended--
(1) by striking ``Resolution Trust Corporation''; and
(2) by striking ``or the Office of Thrift Supervision''.
(e) Amendment to Section 1006.--Section 1006 of title 18, United
States Code, is amended--
(1) by striking ``Office of Thrift Supervision''; and
(2) by striking ``the Resolution Trust Corporation''.
(f) Amendment to Section 1014.--Section 1014 of title 18, United
States Code, is amended--
(1) by striking ``Office of Thrift Supervision''; and
(2) by striking ``Resolution Trust Corporation''.
(g) Amendment to Section 1032.--Section 1032 of title 18, United
States Code, is amended--
(1) by striking ``or the Director of the Office of Thrift
Supervision''; and
(2) by striking ``the Resolution Trust Corporation''.
SEC. 1251. AMENDMENTS TO TITLE 31, UNITED STATES CODE.
(a) Amendment to Section 309.--Section 309 of title 31, United
States Code, is amended to read as follows:
``Sec. 309. Division of Thrift Supervision
``The Division of Thrift Supervision established under section 3(a)
of the Home Owners' Loan Act shall be a division in the Office of the
Comptroller of the Currency.''.
(b) Amendments to Section 321.--Section 321 of title 31, United
States Code, is amended--
(1) by inserting ``and'' at the end of subsection (c)(1);
(2) in subsection (c)(2) by striking ``Comptroller of the
Currency; and'' and inserting ``Comptroller of the Currency.'';
and
(3) by striking subsection (e).
(c) Amendments to Section 714.--Section 714 of title 31, United
States Code, is amended in subsection (a) by striking ``the Office of
the Comptroller of the Currency, and the Office of Thrift
Supervision.'' and inserting ``and the Office of the Comptroller of the
Currency.''.
Subtitle D--Further Improvements to the Regulation of Bank Holding
Companies and Depository Institutions
SEC. 1301. TREATMENT OF CREDIT CARD BANKS, INDUSTRIAL LOAN COMPANIES,
AND CERTAIN OTHER COMPANIES UNDER THE BANK HOLDING
COMPANY ACT.
(a) Definitions.--Section 2 of the Bank Holding Company Act of 1956
(12 U.S.C. 1841), is amended--
(1) in subsection (a)(5), by adding at the end the
following new subparagraph:
``(G) No company is a bank holding company by
virtue of its ownership or control of a section six
holding company or any subsidiary of a section six
holding company, so long as the requirements of
sections 4(p) and 6 of this Act are met, as applicable,
by the section six holding company;''
(2) in subsection (c)(1)(A), by striking ``insured bank''
and inserting ``insured depository institution'', and by
striking ``section 3(h) of the Federal Deposit Insurance Act''
and inserting ``section 3(c)(2) of the Federal Deposit
Insurance Act.'';
(3) in subsection (c)(2)--
(A) by striking subparagraph (B);
(B) by striking subparagraphs (F) and (H); and
(C) by redesignating existing subparagraphs (C),
(D), (E), and (G) as subparagraphs (B), (C), (D), and
(E), respectively; and
(4) at the end of section 2, adding the following new
subsection:
``(r) Section Six Holding Companies.--A `section six holding
company' means a company that is required to be established as an
intermediate holding company under section 6 of this Act.''.
(b) Nonbanking Activities Exceptions.--Section 4 of the Bank
Holding Company Act of 1956 (12 U.S.C. 1843) is amended--
(1) in subsection (f)(1)(B) by striking ``for purposes of
this Act'' and inserting ``for purposes of section 4(a)''; and
(2) by adding after subsection (f)(2)(C) the following:
``(D) such company fails to--
``(i) establish and register a section six
holding company pursuant to section 6 of this
Act within 90 days after the date of enactment
of the Financial Stability Improvement Act of
2009, unless the Board grants an extension of
such period for compliance which shall not
exceed 180 additional days; and
``(ii) conduct all its activities which are
financial in nature or incidental thereto as
determined under section 4(k) through such
section six holding company, in accordance with
regulations prescribed by or orders issued by
the Board, pursuant to section 6 of this
Act.''; and
(3) by inserting at the end the following new subsection:
``(p) Certain Companies Not Subject to This Act.--
``(1) In general.--Except as provided in paragraphs (6) and
(7), any company which--
``(A)(i) was--
``(I) a unitary savings and loan
holding company on May 4 1999, or
became a unitary savings and loan
holding company pursuant to an
application pending before the Office
of Thrift Supervision on of before that
date, and that--
``(aa) on June 30, 2009,
continued to control not fewer
than one savings association
that it controlled on May 4,
1999, which became a bank for
purposes of the Bank Holding
Company Act as a result of the
enactment of section
1301(a)(2)(A); and
``(bb) on June 30, 2009,
and the date of enactment of
the Financial Stability
Improvement Act of 2009, such
savings association subsidiary
was and remains a qualified
thrift lender (as determined by
section 10 of the Home Owners'
Loan Act); or
``(ii) on June 30, 2009, controlled--
``(I) an institution which became a bank as
a result of the enactment of section
1301(a)(2)(B) of the Financial Stability
Improvement Act of 2009, or
``(II) an institution it has continuously
controlled since March 5, 1987, which became a
bank as a result of the enactment of the
Competitive Equality Banking Act of 1987,
pursuant to subsection (f);
``(B) was not on June 30, 2009--
``(aa) a bank holding company; or
``(bb) subject to the Bank Holding
Company Act by reason of section 8(a)
of the International Banking Act of
1978 (12 U.S.C. 3106(a)); and
``(C) on June 30, 2009, directly or indirectly
controlled shares or engaged in activities that did
not, on the day before the date of enactment of the
Financial Stability Act of 2009 comply with the
activity or investment restrictions on financial
holding companies in section 4 in accordance with
regulations prescribed by the Board, that did not, on
the day before the date of enactment of the Financial
Stability Act of 2009 comply with the activity or
investment restrictions on financial holding companies
in section 4 in accordance with regulations prescribed
by the Board, shall not be treated as a bank holding
company for purposes of this Act solely by virtue of
such company's control of such institution and control
of a section six holding company established pursuant
to section 6.
``(2) Loss of exemption.--A company described in paragraph
(1) shall no longer qualify for the exemption provided under
that paragraph if--
``(A) such company fails to--
``(i) establish and register a section six
holding company pursuant to section 6 of this
Act within 90 days after the date of enactment
of the Financial Stability Improvement Act of
2009, unless the Board grants an extension of
such period for compliance which shall not
exceed 180 additional days; and
``(ii) maintain a section six holding
company in compliance with all the requirements
for a section six holding company under section
6 of this Act;
``(B) such company directly or indirectly
(including through the section six holding company it
must form pursuant to this subsection and section 6 of
this Act) acquires ownership or control of more than 5
percent of the shares or assets of an additional bank
or insured depository institution after June 30, 2009,
other than--
``(i) shares held as a bona fide fiduciary
(whether with or without the sole discretion to
vote such shares);
``(ii) shares held by any person as a bona
fide fiduciary solely for the benefit of
employees of either the company described in
paragraph (1) or any subsidiary of that company
and the beneficiaries of those employees;
``(iii) shares held temporarily pursuant to
an underwriting commitment in the normal course
of an underwriting business;
``(iv) shares held in an account solely for
trading purposes;
``(v) shares over which no control is held
other than control of voting rights acquired in
the normal course of a proxy solicitation;
``(vi) loans or other accounts receivable
acquired from an insured depository institution
in the normal course of business; and
``(vii) shares or assets acquired in
securing or collecting a debt previously
contracted in good faith, during the 2-year
period beginning on the date of such
acquisition or for such additional time (not
exceeding 3 years) as the Board may permit if
the Board determines that such an extension
will not be detrimental to the public interest;
``(C)(i) the section six holding company required
to be established by such company, or any subsidiary
bank of such company undergoes a change in control
after the date of enactment of the Financial Stability
Improvement Act of 2009, other than--
``(I) the merger or whole acquisition of
such parent company in a bona fide merger or
acquisition (as shall be determined by the
Board, which is authorized to find that a
transaction is not a bona fide merger or
acquisition and thus results in the loss of
exemption), with a company that is
predominantly engaged in activities not
permissible for a financial holding company
pursuant to section 4(k), or
``(II) the acquisition of additional shares
by a company that owned or controlled 7.5
percent or more of any class of such parent
company's outstanding voting stock on or before
June 30, 2009, and continuously owned or
controlled at least such 7.5 percent since June
30, 2009;
``(ii) nothing in this subparagraph shall be
construed as preventing the Board from requiring
compliance with this subsection, section 6 or the
requirements of the Change in Bank Control Act (12
U.S.C. 1817(j)), as applicable to a company that is
permitted to acquire control without loss of the
exemption in this subsection 4(p)(2); or
``(D) any subsidiary bank of such company engages
in any activity after the date of enactment of the
Financial Stability Improvement Act of 2009 which would
have caused such institution to be a bank (as defined
in section 2(c) of this Act, as in effect before such
date) if such activities had been engaged in before
such date.
``(3) Divestiture in case of loss of exemption.--If any
company described in paragraph (1) fails to qualify for the
exemption provided under paragraph (1) by operation of
paragraph (2), such exemption shall cease to apply to such
company and such company shall divest control of each bank it
controls before the end of the 180-day period beginning on the
date on which the company receives notice from the Board that
the company has failed to continue to qualify for such
exemption, unless, before the end of such 180-day period, the
company has--
``(A) either--
``(i) corrected the condition or ceased the
activity that caused the company to fail to
continue to qualify for the exemption; or
``(ii) submitted a plan to the Board for
approval to cease the activity or correct the
condition in a timely manner (which shall not
exceed 1 year); and
``(B) implemented procedures that are reasonably
adapted to avoid the reoccurrence of such condition or
activity.
``(4) Subsection ceases to apply under certain
circumstances.--This subsection shall cease to apply to any
company described in paragraph (1) if such company--
``(A) registers as a bank holding company under
section 2(a) of this Act;
``(B) immediately upon such registration, complies
with all of the requirements of this chapter, and
regulations prescribed by the Board pursuant to this
chapter, including the nonbanking restrictions of this
section; and
``(C) does not, at the time of such registration,
control banks in more than one State, the acquisition
of which would be prohibited by section 3(d) of this
Act if an application for such acquisition by such
company were filed under section 3(a) of this Act.
``(5) Information requirement.--Each company described in
paragraph (1) shall, within 60 days after the date of enactment
of the Financial Stability Improvement Act of 2009, provide the
Board with the name and address of such company, the name and
address of each bank such company controls, and a description
of each such bank's activities.
``(6) Examinations and reports.--The Board may, from time
to time, examine a company described in paragraph (1) or a bank
controlled by such a company, and may require reports under
oath from a company described in paragraph (1), and appropriate
officers or directors of such company, in each case solely for
purposes of assuring compliance with the provisions of this
subsection and enforcing such compliance.
``(7) Limited enforcement.--
``(A) In general.--In addition to any other power
of the Board, the Board may enforce compliance with the
provisions of this subsection which are applicable to
any company described in paragraph (1), and any bank
controlled by such company, under section 8 of the
Federal Deposit Insurance Act, and such company or bank
shall be subject to such section (for such purposes) in
the same manner and to the same extent as if such
company were a bank holding company.
``(B) Application of other act.--Any violation of
this subsection by any company described in paragraph
(1) or any bank controlled by such a company, may also
be treated as a violation of the Federal Deposit
Insurance Act for purposes of subparagraph (A).
``(C) No effect on other authority.--No provision
of this paragraph shall be construed as limiting any
authority of the Board or any other Federal agency
under any other provision of law.''.
(c) Section Six Holding Companies.--The Bank Holding Company Act
(12 U.S.C. 1841 et seq.) is amended by inserting after section 5 the
following new section:
``SEC. 6. SPECIAL-PURPOSE HOLDING COMPANIES.
``(a) Establishment, Purpose and Requirements of Special Purpose
Holding Companies.--
``(1) Requirement.--A special purpose holding company
(hereafter in this section referred to as a `section 6 holding
company') shall be established and maintained by a company--
``(A) described in section 4(f)(1) as required by
section 4(f)(2)(D) of this Act;
``(B) described in section 4(p)(1) as required by
section 4(p)(2)(A) of this Act; or
``(C) that--
``(i) is subject to heightened prudential
standards under Subtitle B of the Financial
Stability Improvement Act of 2009;
``(ii) is not--
``(I) a bank holding company, or
``(II) subject to the Bank Holding
Company Act by reason of section 8(a)
of the International Banking Act of
1978 (12 U.S.C. 3106(a)); and
``(iii) directly or indirectly controlled
shares or engaged in activities that did not,
on the date the company is first subject to
heightened prudential standards pursuant to
subtitle B of the Financial Stability
Improvement Act of 2009, comply with the
activity or investment restrictions on
financial holding companies in section 4 in
accordance with regulations prescribed by the
Board.
``(2) Purpose.--
``(A) A company that is required to form a section
6 holding company shall conduct all of its activities
that are determined to be financial in nature or
incidental thereto under section 4(k) and shall hold
any shares of a bank or insured depository institution
controlled by such company, through the section 6
holding company, unless the Board specifically
determines otherwise in accordance with paragraph (6).
``(B) A section 6 holding company shall be
prohibited from conducting any activities or investing
in any companies other than those permissible for a
financial holding company under section 4, unless the
Board specifically determines otherwise in accordance
with paragraph (6).
``(3) Registration.--
``(A) A section 6 holding company required to be
established by a company described in subparagraph
(1)(A) shall be established, and such company shall
register with the Board as a bank holding company,
pursuant to the requirements in section 4(f).
``(B) A section 6 holding company required to be
established by a company described in subparagraph
(1)(B) shall be established, and such company shall
register with the Board as a bank holding company,
pursuant to the requirements in section 4(p).
``(C) A section 6 holding company required to be
established by a company described in paragraph (1)(C)
shall be--
``(i) established, and such company shall
register with the Board, as a bank holding
company within 90 days after such company or
such company's parent holding company has been
notified by the Board that such company is
subject to heightened prudential standards
under Subtitle B of the Financial Stability
Improvement Act of 2009, unless the Board
grants an extension of such period for
compliance which shall not exceed 180
additional days;
``(ii) treated as a financial holding
company under this Act; and
``(iii) subject to the authority of the
Board to enforce compliance with the provisions
of this section under section 8 of the Federal
Deposit Insurance Act in the same manner and to
the same extent as if such company were a bank
holding company.
``(4) Rule of construction.--For purposes of this section,
designation of an already established intermediate holding
company that will serve as the section 6 holding company shall
satisfy the requirement to establish a section 6 holding
company, provided that such existing intermediate holding
company complies with all other provisions applicable to a
section 6 holding company.
``(5) Limitations on authority of commercial parent.--A
company that is not a bank holding company or treated as a bank
holding company pursuant to section 8(a) of the International
Bank Act of 1978 that has been notified that it is an
identified financial holding company, pursuant to subtitle A of
the Financial Stability Improvement Act of 2009, shall--
``(A) not be deemed to be, or treated as, a bank
holding company, solely because of its ownership or
control of a section 6 holding company; and
``(B) not be subject to this Act, except for such
provisions as are explicitly made applicable in this
section.
``(6) Board authority.--
``(A) Rules and exemptions.--In addition to any
other authority of the Board, the Board may, at its
discretion, prescribe rules and regulations or issue
orders regarding:
``(i) the establishment and operation of
section 6 holding companies;
``(ii) exemptions from the requirement to
conduct all activities that are financial or
incidental thereto, as defined in section 4(k),
through the section 6 holding company if such
exemption--
``(I) would not threaten the safety
and soundness of the section 6 holding
company or any subsidiary of the
section 6 holding company;
``(II) would not increase systemic
risk or threaten the stability of the
overall financial system; and
``(III) would not result in unfair
competitive advantage to the parent
company of such section 6 holding
company; and
``(iii) exemptions from the affiliate
transaction requirements of subsection (b) if
such exemption--
``(I) is consistent with the
purposes of this section, and section
23A and section 23B of the Federal
Reserve Act;
``(II) would not threaten the
safety and soundness of the section 6
holding company or any subsidiary of
the section 6 holding company;
``(III) would not increase systemic
risk or threaten the stability of the
overall financial system; and
``(IV) would not result in unfair
competitive advantage to the parent
company of such section 6 holding
company.
``(B) Parent company reports.--The Board may, from
time to time, require reports under oath from a company
that controls a section 6 holding company, and
appropriate officers or directors of such company,
solely for purposes of ensuring compliance with the
provisions of this section (including assessing the
company's ability to serve as a source of financial
strength pursuant to subsection (g)) and enforcing such
compliance.
``(C) Limited parent company enforcement.--
``(i) In general.--In addition to any other
power of the Board, the Board may enforce
compliance with the provisions of this
subsection which are applicable to any company
described in paragraph (1), and any bank
controlled by such company, under section 8 of
the Federal Deposit Insurance Act and such
company or bank shall be subject to such
section (for such purposes) in the same manner
and to the same extent as if such company were
a bank holding company.
``(ii) Application of other act.--Any
violation of this subsection by any company
that controls a section 6 holding company or
any bank controlled by such a company, may also
be treated as a violation of the Federal
Deposit Insurance Act for purposes of clause
(i).
``(iii) No effect on other authority.--No
provision of this subparagraph shall be
construed as limiting any authority of the
Board or any other Federal agency under any
other provision of law.
``(b) Restrictions on Affiliate Transactions.--
``(1) Section 23a and 23b applicability.--
``(A) In general.--Transactions between a section 6
holding company established under this section
(including any subsidiary of such company) and any
affiliate of such company that is not a subsidiary of
the section 6 holding company shall be subject to the
restrictions and limitations contained in section 23A
and section 23B of the Federal Reserve Act as if the
section 6 holding company were a member bank.
``(B) Covered transactions.--
``(i) A depository institution controlled
by a section 6 holding company may not engage
in a covered transaction (as defined in section
23A(b)(7) of the Federal Reserve Act) with any
affiliate that is not the section 6 holding
company or a subsidiary of the section 6
holding company.
``(ii) For purposes of this subparagraph
(B), any transaction by a depository
institution controlled by a section 6 holding
company with any person shall be deemed to be a
transaction with an affiliate that is not the
section 6 holding company or a subsidiary of
the section 6 holding company to the extent
that the proceeds of the transaction are used
for the benefit of, or transferred to, that
affiliate.
``(2) Rule of construction.--No provision of this
subsection shall be construed as exempting any subsidiary
insured depository institution of a section 6 holding company
from compliance with section 23A or 23B of the Federal Reserve
Act with respect to each affiliate of such institution (as
defined in section 23A or 23B of the Federal Reserve Act),
including any affiliate that is the section 6 holding company
or subsidiary of the section 6 holding company.
``(c) Tying Provisions.--A company that directly or indirectly
controls a section 6 holding company shall be--
``(1) treated as a bank holding company for purposes of
section 106 of the Bank Holding Company Act Amendments of 1970
and section 22(h) of the Federal Reserve Act and any regulation
prescribed under any such section; and
``(2) subject to the restrictions of section 106 of the
Bank Holding Company Act Amendments of 1970, in connection with
any transaction involving the products or services of such
company or affiliate and those of a bank affiliate, as if such
company or affiliate were a bank and such bank were a
subsidiary of a bank holding company.
``(d) Cross Marketing Restrictions Applicable to Commercial
Activities.--
``(1) In general.--A section 6 holding company shall not--
``(A) offer or market, directly or through any
arrangement, any product or service of an affiliate
that is not a subsidiary of the section 6 holding
company; or
``(B) permit any of the products or services of the
section 6 holding company or any subsidiary thereof to
be offered or marketed, directly or through any
arrangement, by or through any affiliate that is not a
subsidiary of the section 6 holding company.
``(2) Board authority to grant exemptions.--The Board may
grant exemptions from the restrictions in this subsection if--
``(A) the arrangement does not violate section 106
of the Bank Holding Company Act Amendments of 1970; and
``(B) the Board determines that the arrangement is
in the public interest, does not undermine the
separation of banking and commerce, and is consistent
with the safety and soundness of the section 6 holding
company.
``(e) Financial Holding Company Requirements.--A section 6 holding
company shall be subject to--
``(1) the conditions for engaging in expanded financial
activities in section 4(l); and
``(2) the provisions applicable to financial holding
companies that fail to meet certain requirements in section
4(m).
``(f) Independence of Section 6 Holding Company.--
``(1) No less than 25 percent of the members of the board
of directors of a section 6 holding company, and each
subsidiary of a section 6 holding company shall be independent
of the parent company of the section 6 holding company and any
subsidiary of such parent company. For purposes of this
subsection, a director shall be independent of the parent
company if such person is not currently serving, and has not
within the previous two-year period served, as a director,
officer, or employee of any affiliate of the section 6 holding
company that is not a subsidiary of the section 6 holding
company.
``(2) No executive officer of a section 6 holding company
or any subsidiary of a section 6 holding company may serve as a
director, officer, or employee of an affiliate of the section 6
holding company that is not a subsidiary of the section 6
holding company.
``(3) The Board shall issue regulations that require
effective legal and operational separation of the functions of
a section 6 holding company from its affiliates that are not
subsidiaries of such section 6 holding company.
``(g) Source of Strength.--A company that directly or indirectly
controls a section 6 holding company shall serve as a source of
financial strength to its subsidiary section 6 holding company.''.
(d) Conforming Changes.--Section 4(h) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1843(h)), is amended--
(1) in paragraph (1), by striking ``subparagraph (D), (F),
(G), or (H)'' and inserting ``subparagraph (C) or (D)''; and
(2) in paragraph (2), by striking ``subparagraph (D), (F),
(G), or (H)'' and inserting ``subparagraph (C) or (D)''.
SEC. 1302. REGISTRATION OF CERTAIN COMPANIES AS BANK HOLDING COMPANIES.
Section 5 of the Bank Holding Company Act of 1956 (12 U.S.C. 1844)
is amended by inserting at the end the following new subsection:
``(h) Conversion to Bank Holding Company by Operation of Law.--
``(1) Conversion by operation of law.--A company that, on
the day before the date of enactment of the Financial Stability
Improvement Act of 2009, was not a bank holding company but
which, by reason of sections 4(p) and 6 becomes a bank holding
company by operation of law, shall register as a bank holding
company with the Board in accordance with section 5(a) within
90 days of the date of enactment of that Act.
``(2) Compliance with bank holding company act.--With
respect to any company described in paragraph (1), the Board
may grant temporary exemptions or provide other appropriate
temporary relief to permit such company to implement measures
necessary to comply with the requirements under the Bank
Holding Company Act.''.
SEC. 1303. REPORTS AND EXAMINATIONS OF BANK HOLDING COMPANIES;
REGULATION OF FUNCTIONALLY REGULATED SUBSIDIARIES.
(a) Reports of Bank Holding Companies.--Sections 5(c)(1) (A) and
(B) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(1) (A)
and (B)) are amended to read as follows:
``(A) In general.--The Board, from time to time,
may require a bank holding company and any subsidiary
of such company to submit reports under oath that the
Board determines are necessary or appropriate for the
Board to carry out the purposes of this chapter,
prevent evasions thereof, and monitor compliance by the
company or subsidiary with the applicable provisions of
law.
``(B) Use of existing reports.--
``(i) In general.--The Board shall, to the
fullest extent possible, use:
``(I) reports that a bank holding
company or any subsidiary of such
company has been required to provide to
other Federal or State regulatory
agencies;
``(II) information that is
otherwise required to be reported
publicly; and
``(III) externally audited
financial statements.
``(ii) Availability.--A bank holding
company or a subsidiary of such company shall
promptly provide to the Board, at the request
of the Board, a report referred to in clause
(i)(I).''.
(b) Functionally Regulated Subsidiary.--Section 5(c)(1) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)) is amended by
inserting at the end the following new subparagraph:
``(C) Definition.--For purposes of this subsection
and section 6, the term `functionally regulated
subsidiary' means any subsidiary (other than a
depository institution) of a bank holding company that
is--
``(i) a broker or dealer registered with
the Securities and Exchange Commission under
the Securities Exchange Act of 1934, for which
the Securities and Exchange Commission is the
Federal regulatory agency;
``(ii) an investment company registered
with the Securities and Exchange Commission
under the Investment Company Act of 1940, for
which the Securities and Exchange Commission is
the Federal regulatory agency;
``(iii) an investment adviser registered
with the Securities and Exchange Commission
under the Investment Advisers Act of 1940, for
which the Securities and Exchange Commission is
the Federal regulatory agency, with respect to
the investment advisory activities of such
investment adviser and activities incidental to
such investment advisory activities; and
``(iv) a futures commission merchant,
commodity trading advisor, and commodity pool
operator registered with the Commodity Futures
Trading Commission under the Commodity Exchange
Act, for which the Commodity Futures Trading
Commission is the Federal regulatory agency,
with respect to the commodities activities of
such entity and activities incidental to such
commodities activities.''.
(c) Examinations of Bank Holding Companies.--Sections 5(c)(2) (A)
and (B) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(2)
(A) and (B)) are amended to read as follows:
``(A) In general.--The Board may make examinations
of a bank holding company and any subsidiary of such a
company to carry out the purposes of this chapter,
prevent evasions thereof, and monitor compliance by the
company or subsidiary with applicable provisions of
law.
``(B) Functionally regulated and depository
institution subsidiaries.--The Board shall, to the
fullest extent possible, use reports of examination of
functionally regulated subsidiaries and subsidiary
depository institutions made by other Federal or State
regulatory authorities.''.
(d) Regulation of Financial Holding Companies.--Section 5(c)(2) of
the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)) is amended by
striking subparagraphs (C), (D), and (E).
(e) Authority To Regulate Functionally Regulated Subsidiaries of
Bank Holding Companies.--The Bank Holding Company Act of 1956 (12
U.S.C. 1841 et seq.) is amended by striking section 10A (12 U.S.C.
1848a).
SEC. 1304. REQUIREMENTS FOR FINANCIAL HOLDING COMPANIES TO REMAIN WELL
CAPITALIZED AND WELL MANAGED.
Section 4(l)(1) of the Bank Holding Company Act of 1956 (12 U.S.C.
1843(l)(1)) is amended--
(1) in subparagraph (B), by striking ``and'';
(2) by redesignating subparagraph (C) as subparagraph (D);
(3) by inserting after subparagraph (B) the following new
subparagraph:
``(C) the bank holding company is well capitalized
and well managed; and''; and
(4) in subparagraph (D) (as so redesignated) by striking
clause (ii) and inserting the following new clause:
``(i) a certification that the company
meets the requirements of subparagraphs (A)
through (C).''.
SEC. 1305. STANDARDS FOR INTERSTATE ACQUISITIONS.
(a) Bank Holding Company Act of 1956 Amendment.--Section 3(d)(1)(A)
of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is
amended--
(1) by striking ``adequately capitalized'' and inserting
``well capitalized''; and
(2) by striking ``adequately managed'' and inserting ``well
managed''.
(b) Federal Deposit Insurance Act Amendment.--Section 44(b)(4)(B)
of the Federal Deposit Insurance Act (12 U.S.C. 1831u(b)(4)(B)) is
amended to read as follows:
``(B) the responsible agency determines that the
resulting bank will be well capitalized and well
managed upon the consummation of the transaction.''.
SEC. 1306. ENHANCING EXISTING RESTRICTIONS ON BANK TRANSACTIONS WITH
AFFILIATES.
(a) Section 23A of the Federal Reserve Act (12 U.S.C. 371c) is
amended--
(1) in subsection (b)(1), by striking subparagraph (D) and
inserting the following new subparagraph:
``(D) any investment fund with respect to which a
member bank or affiliate thereof is an investment
adviser; and'';
(2) in subsection (b)(7)(A), by inserting ``(including a
purchase of assets subject to an agreement to repurchase)''
after ``affiliate'';
(3) in subsection (b)(7)(C), by striking ``, including
assets subject to an agreement to repurchase,'';
(4) in subsection (b)(7)(D)--
(A) by inserting ``or other debt obligations''
after ``acceptance of securities'', and
(B) by striking ``or'' after the semicolon;
(5) in subsection (b)(7), by inserting at the end the
following new subparagraphs:
``(F) any securities borrowing and lending
transactions with an affiliate to the extent that the
transactions create credit exposure of the member bank
to the affiliate; or
``(G) current and potential future credit exposure
to the affiliate on derivative transactions with the
affiliate;'';
(6) in subsection (c)(1), by striking ``at the time of the
transaction,'' and inserting ``at all times'';
(7) in subsection (c)--
(A) by striking paragraph (2);
(B) by redesignating paragraphs (3), (4), and (5)
as paragraphs (2), (3), and (4), respectively;
(8) in subsection (c)(3) (as so redesignated by paragraph
(7)), by inserting ``or other debt obligations'' after
``securities'';
(9) in subsection (f)(2), by inserting at the end the
following: ``The Board may not, by regulation or order, grant
an exemption under this section unless the Board obtains the
concurrence of the Chairman of the Federal Deposit Insurance
Corporation.''; and
(10) in subsection (f)--
(A) by redesignating paragraph (3) as paragraph
(4); and
(B) and inserting after paragraph (2) the following
new paragraph:
``(3) Concurrence of the comptroller of the currency.--With
respect to a transaction or relationship involving a national
bank or Federal savings association, the Board may not grant an
exemption under this section unless the Board obtains the
concurrence of the Comptroller of the Currency (in addition to
obtaining the concurrence of the Chairman of the Federal
Deposit Insurance Corporation under paragraph (2)).''.
(b) Technical and Conforming Amendment.--Section 23B(e) of the
Federal Reserve Act (12 U.S.C. 371-1(e)), is amended by inserting at
the end the following new paragraph:
``(3) The Board may not grant an exemption or exclusion
under this section unless the Board obtains the concurrence of
the Chairman of the Federal Deposit Insurance Corporation.''.
SEC. 1307. ELIMINATING EXCEPTIONS FOR TRANSACTIONS WITH FINANCIAL
SUBSIDIARIES.
Section 23A(e) of the Federal Reserve Act (12 U.S.C. 371c(e)) is
amended--
(1) by striking paragraph (3); and
(2) by redesignating paragraph (4) as paragraph (3).
SEC. 1308. LENDING LIMITS APPLICABLE TO CREDIT EXPOSURE ON DERIVATIVE
TRANSACTIONS, REPURCHASE AGREEMENTS, REVERSE REPURCHASE
AGREEMENTS, AND SECURITIES LENDING AND BORROWING
TRANSACTIONS.
Section 5200 of the Revised Statutes of the United States (12
U.S.C. 84) is amended--
(1) in subsection (b)(1), by striking ``shall include all
direct or indirect'' and all that follows in that paragraph
through ``commitment;'' and inserting: ``shall include--
``(A) all direct or indirect advances of funds to a
person made on the basis of any obligation of that
person to repay the funds or repayable from specific
property pledged by or on behalf of the person;
``(B) to the extent specified by the Comptroller of
the Currency, such term shall also include any
liability of a national banking association to advance
funds to or on behalf of a person pursuant to a
contractual commitment; and
``(C) credit exposure to a person arising from a
derivative transaction, repurchase agreement, reverse
repurchase agreement, securities lending transaction,
or securities borrowing transaction between the
national banking association and the person;'';
(2) in subsection (b)(2) by striking the period at the end
and inserting ``; and'';
(3) in subsection (b), by inserting after paragraph (2) the
following new paragraph:
``(3) the term `derivative transaction' means any
transaction that is a contract, agreement, swap, warrant, note,
or option that is based, in whole or in part, on the value of,
any interest in, or any quantitative measure or the occurrence
of any event relating to, one or more commodities, securities,
currencies, interest or other rates, indices, or other
assets.''; and
(4) in subsection (d), by inserting after paragraph (2) the
following new paragraph:
``(3) The Comptroller of the Currency shall prescribe rules
to administer and carry out the purposes of this section with
respect to credit exposures arising from any derivative
transaction, repurchase agreement, reverse repurchase
agreement, securities lending transaction, or securities
borrowing transaction. Rules required to be prescribed under
this paragraph (3) shall take effect, in final form, not later
than 180 days after the date of enactment of the Financial
Stability Improvement Act of 2009.''.
SEC. 1309. APPLICATION OF NATIONAL BANK LENDING LIMITS TO INSURED STATE
BANKS.
Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is
amended by adding at the end a new subsection:
``(y) Application of Lending Limits to Insured State Banks.--
Section 84 of this title shall apply to every insured depository
institution in the same manner and to the same extent as if the insured
depository institution were a national banking association.''.
SEC. 1310. RESTRICTION ON CONVERSIONS OF TROUBLED BANKS.
(a) Conversion of a National Banking Association to a State Bank.--
The National Bank Consolidation and Merger Act (12 U.S.C. 215 et seq.)
is amended by redesignating section 7 as section 8 and by inserting
after section 6 the following:
``SEC. 7. PROHIBITION ON CERTAIN CONVERSIONS.
``A national bank may not convert to a State bank during any period
of time in which it is subject to a Cease and Desist order, memorandum
of understanding, or other enforcement action entered into with or
issued by the Comptroller of the Currency.''
(b) Conversion of a State Bank to a National Bank.--Section 5154 of
the Revised Statutes (12 U.S.C. 35) is amended by adding at the end the
following new sentence: ``The Comptroller of the Currency shall not
approve the conversion of a State bank to a national bank during any
period of time in which the State bank is subject to a Cease and Desist
order, memorandum of understanding, or other enforcement action entered
into or issued by a State bank supervisor, the Federal Deposit
Insurance Corporation, the Board of Governors of the Federal Reserve
System or a Federal Reserve Bank.''.
SEC. 1311. LENDING LIMITS TO INSIDERS.
Section 22(h)(9)(D)(ii) of the Federal Reserve Act (12 U.S.C.
375b(h)(9)(D)(ii)) is amended by inserting ``, except that a member
bank shall be deemed to have extended credit to a person if the member
bank has credit exposure to the person arising from a derivative
transaction, repurchase agreement, reverse repurchase agreement,
securities lending transaction, or securities borrowing transaction
between the member bank and the person.'' before the period at the end.
SEC. 1312. LIMITATIONS ON PURCHASES OF ASSETS FROM INSIDERS.
(a) Section 18 of the Federal Deposit Insurance Act (12 U.S.C.
1828) is amended by inserting after subsection (y) (as added by section
1408) the following new subsection:
``(z) General Prohibition.--An insured depository institution shall
not purchase an asset from, or sell an asset to, one of its executive
officers, directors, or principal shareholders or any related interest
of such person (as such terms are defined in 22(h) of Federal Reserve
Act) unless the transaction is on market terms and, if the transaction
represents more than 10 percent of the institution's capital stock and
surplus, the transaction has been approved in advance by a majority of
the institution's board of directors (with interested directors of the
insured depository institution not participating in the approval of the
transaction).''.
(b) FDIC Rulemaking Authority.--The Federal Deposit Insurance
Corporation may prescribe rules to implement the requirements of
section (a).
(c) Amendments to the Federal Reserve Act.--Section 22 of the
Federal Reserve Act (12 U.S.C. 375) is amended by striking subsection
(d).
SEC. 1313. RULES REGARDING CAPITAL LEVELS OF BANK HOLDING COMPANIES.
Section 5(b) of the Bank Holding Company Act of 1956 (12 U.S.C.
1844(b)) is amended by inserting ``, including regulations relating to
the capital levels of bank holding companies'' before the period at the
end.
SEC. 1314. ENHANCEMENTS TO FACTORS TO BE CONSIDERED IN CERTAIN
ACQUISITIONS.
(a) Bank Acquisitions.--Section 3(c) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1842(c)) is amended by inserting at the end the
following new paragraph:
``(7) Financial stability.--In every case, the Board shall
take into consideration the extent to which the proposed
acquisition, merger, or consolidation may pose risk to the
stability of the United States financial system or the economy
of the United States.''.
(b) Nonbank Acquisitions.--
(1) Section 4(j)(2)(A) of the Bank Holding Company is
amended by--
(A) striking ``or'' before ``unsound banking
practices''; and
(B) inserting before the period at the end ``, or
risk to the stability of the United States financial
system or the economy of the United States''.
(2) Section 4(k)(6) of the Bank Holding Company Act is
amended by striking subparagraph (B) and inserting the
following new subparagraph:
``(B) A financial holding company may commence any
activity or acquire any company, pursuant to paragraph
(4) or any regulation prescribed or order issued under
paragraph (5), without prior approval of the Board,
except--
``(i) for a transaction in which the total
assets to be acquired by the financial holding
company exceed $25 billion; and
``(ii) as provided in subsection (j) with
regard to the acquisition of a savings
association.''.
(c) Bank Merger Act Transactions.--Section 8(c)(5) of the Federal
Deposit Insurance Act (12 U.S.C. 1828(c)(5)) is amended by--
(1) striking ``and'' before ``the convenience and needs of
the community to be served''; and
(2) inserting before the period at the end ``, and the risk
to the stability of the United States financial system and the
economy of the United States''.
SEC. 1315. ELIMINATION OF ELECTIVE INVESTMENT BANK HOLDING COMPANY
FRAMEWORK.
Section 17 of the Securities Exchange Act of 1934 (15 U.S.C. 78q)
is amended by striking subsection (i) and redesignating the following
subsections accordingly.
SEC. 1316. EXAMINATION FEES FOR LARGE BANK HOLDING COMPANIES.
The Bank Holding Company Act is amended by adding a new section 5A:
``SEC. 5A. EXAMINATION FEES.
``The Board of Governors of the Federal Reserve System or the
Federal Reserve Banks shall assess fees on bank holding companies with
total consolidated assets of $10 billion or more. Such fees shall be
sufficient to defray the cost of the examination of such bank holding
companies.''.
Subtitle E--Payment, Clearing, and Settlement Supervision
SEC. 1401. SHORT TITLE.
This subtitle may be cited as the ``Payment, Clearing, and
Settlement Supervision Act of 2009''.
SEC. 1402. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds the following:
(1) The proper functioning of the financial markets is
dependent upon safe and efficient arrangements for the clearing
and settlement of payment, securities and other financial
transactions.
(2) Financial market utilities that conduct or support
multilateral payment, clearing, or settlement activities may
reduce risks for their participants and the broader financial
system, but such utilities may also concentrate and create new
risks and thus must be well designed and operated in a safe and
sound manner.
(3) Payment, clearing and settlement activities conducted
by financial institutions also present important risks to the
participating financial institutions and to the financial
system.
(4) Enhancements to the regulation and supervision of
systemically important financial market utilities and the
conduct of systemically important payment, clearing, and
settlement activities by financial institutions are necessary
to provide consistency, to promote robust risk management and
safety and soundness, to reduce systemic risks, and to support
the stability of the broader financial system.
(b) Purposes.--The purposes of this subtitle are to mitigate
systemic risk in the financial system and promote financial stability
by--
(1) authorizing the Board of Governors of the Federal
Reserve System to prescribe uniform standards for the
management of risks by systemically important financial market
utilities and for the conduct of systemically important
payment, clearing and settlement activities by financial
institutions;
(2) providing for appropriate supervision and enforcement
of such risk management standards for systemically important
financial market utilities and payment, clearing, and
settlement activities; and
(3) strengthening the liquidity of systemically important
financial market utilities.
SEC. 1403. DEFINITIONS.
For purposes of this subtitle, the following definitions shall
apply:
(1) Affiliate.--The term ``affiliate'' means any company
that controls, is controlled by, or is under common control
with another company.
(2) Appropriate financial regulator.--The term
``appropriate financial regulator'' means the following:
(A) The Comptroller of the Currency, with respect
to--
(i) any national banks or a Federal branch
or Federal agency of a foreign bank; and
(ii) after the functions of the Director of
the Office of Thrift Supervision are
transferred under subtitle C, any Federal
savings association.
(B) the Board of Directors of the Corporation, with
respect to--
(i) any insured State nonmember bank or any
insured branch of a foreign bank (other than a
Federal branch); and
(ii) after the functions of the Director of
the Office of Thrift Supervision are
transferred under subtitle C, any State savings
association.
(C) The Director of the Office of Thrift
Supervision, with respect to any savings association
and any savings and loan holding company, until the
functions of the Director of the Office of Thrift
Supervision are transferred under subtitle C.
(D) The Board, with respect to--
(i) any State member bank;
(ii) any branch or agency of a foreign bank
(other than any Federal branch, Federal agency,
or insured State branch of a foreign bank);
(iii) any commercial lending company owned
or controlled by a foreign bank;
(iv) any organization operating under
section 25 or 25A of the Federal Reserve Act
(12 U.S.C. 601 et seq. or 611 et seq.);
(v) any bank holding company and any
nondepository subsidiary of a bank holding
company (other than any broker, dealer,
investment company, or investment adviser
registered with the Securities and Exchange
Commission, or any futures commission merchant,
commodity trading advisor, or commodity pool
operator registered with the Commodity Futures
Trading Commission); and
(vi) after the functions of the Director of
Thrift Supervision are transferred under
subtitle C, any savings and loan holding
company and any non-depository subsidiary of a
savings and loan holding company (other than
any broker, dealer, investment company, or
investment adviser registered with the
Securities and Exchange Commission, or any
futures commission merchant, commodity trading
advisor, or commodity pool operator registered
with the Commodity Futures Trading Commission).
(E) The National Credit Union Administration Board,
with respect to any insured credit union under the
Federal Credit Union Act (12 U.S.C. 1751 et seq.).
(F) The Securities and Exchange Commission, with
respect to--
(i) any broker or dealer registered with
the Securities and Exchange Commission under
the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.);
(ii) any investment company registered with
the Securities and Exchange Commission under
the Investment Company Act of 1940 (15 U.S.C.
80a-1 et seq.); and
(iii) any investment adviser registered
with the Securities and Exchange Commission
under the Investment Advisers Act of 1940 (15
U.S.C. 80b-1 et seq.).
(G) The Commodity Futures Trading Commission, with
respect to futures commission merchants, commodity
trading advisors, and commodity pool operators
registered with the Commodity Futures Trading
Commission under the Commodity Exchange Act (7 U.S.C. 1
et seq.).
(H) The State insurance authority of the State in
which an insurance company is domiciled, with respect
to any financial institution engaged in providing
insurance under State insurance law.
(I) The Board, with respect to any other financial
institution engaged in an identified activity.
(3) Board.--The term ``Board'' means the Board of Governors
of the Federal Reserve System.
(4) Corporation.--The term ``Corporation'' means the
Federal Deposit Insurance Corporation.
(5) Financial institution.--The term ``financial
institution'' means an entity other than a financial market
utility that is--
(A) a depository institution (as defined in section
3 of the Federal Deposit Insurance Act) (12 U.S.C.
1813);
(B) a branch or agency of a foreign bank (as
defined in section 1(b) of the International Banking
Act of 1978) (12 U.S.C. 3101);
(C) an organization operating under section 25 or
25A of the Federal Reserve Act (12 U.S.C. 601 et seq.
and 611 et seq.);
(D) a credit union (as defined in section 101 of
the Federal Credit Union Act) (12 U.S.C. 1752);
(E) a broker or dealer (as defined in section 3 of
the Securities Exchange Act of 1934) (15 U.S.C. 78c);
(F) an investment company (as defined in section 3
of the Investment Company Act of 1940) (15 U.S.C. 80a-
3);
(G) an insurance company (as defined in section 2
of the Investment Company Act of 1940) (15 U.S.C. 80a-
2);
(H) an investment adviser (as defined in section
202 of the Investment Advisers Act of 1940) (15 U.S.C.
80b-2);
(I) a futures commission merchant, commodity
trading advisor, or commodity pool operator (as defined
in section 1a of the Commodity Exchange Act) (7 U.S.C.
1a); and
(J) any company engaged in activities that are
financial in nature or incidental to a financial
activity, as described in section 4 of the Bank Holding
Company Act of 1956 (12 U.S.C. 1843(k)).
(6) Financial market utility.--The term ``financial market
utility'' means any person that manages or operates a
multilateral system for the purpose of transferring, clearing,
or settling payments, securities, or other financial
transactions among financial institutions or between financial
institutions and the person.
(7) Identified activity.--The term ``identified activity''
means a payment, clearing, or settlement activity that the
Council has identified as systemically important under section
1404.
(8) Identified financial market utility.--The term
``identified financial market utility'' means a financial
market utility that the Council has identified as systemically
important under section 1404.
(9) Payment, clearing, or settlement activity.--
(A) In general.--The term ``payment, clearing, or
settlement activity'' means one of the following
activities carried out by one or more financial
institutions after the parties to a financial
transaction agree to the transaction to facilitate the
completion of the financial transaction: the
calculation and communication of unsettled financial
transactions between financial institutions; netting or
aggregating of financial transactions; provision and
maintenance of trade, contract, or instrument
information; the management of risks associated with
unsettled financial transactions; transmittal and
storage of payment instructions; movement of funds;
final settlement of financial transactions; and other
similar activities that the Board may determine by rule
or order. ``Payment, clearing, or settlement activity''
does not include, among other things, activities
inclusive of or prior to trade execution.
(B) Financial transaction.--For purposes of
subparagraph (A), the term ``financial transaction''
means a funds transfer, securities contract, contract
of sale of a commodity for future delivery, forward
contract, repurchase agreement, swap agreement, foreign
exchange contract, financial derivatives contract, and
any similar transaction that the Board determines, by
rule or order, to be a financial transaction for
purposes of this subtitle.
(10) Person.--The term ``person'' means any corporation,
company, association, firm, partnership, society, joint stock
company, or other legal entity other than a natural person.
(11) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(12) State.--The term ``State'' means any State,
commonwealth, territory, or possession of the United States,
the District of Columbia, the Commonwealth of Puerto Rico, the
Commonwealth of the Northern Mariana Islands, American Samoa,
Guam, or the United States Virgin Islands.
(13) Supervisory agency.--The term ``Supervisory Agency''
means the Federal agency that has primary jurisdiction over an
identified financial market utility under Federal banking,
securities, or commodity futures laws, including--
(A) the Securities and Exchange Commission, with
respect to an identified financial market utility that
is a clearing agency registered with the Securities and
Exchange Commission;
(B) the Commodity Futures Trading Commission, with
respect to an identified financial market utility that
is a derivatives clearing organization registered with
the Commodity Futures Trading Commission;
(C) the Board of Directors of the Corporation, with
respect to an identified financial market utility that
is--
(i) an insured State nonmember bank or an
insured branch of a foreign bank; and
(ii) after the functions of the Director of
the Office of Thrift Supervision are
transferred under subtitle C, a State savings
association;
(D) the Comptroller of the Currency, with respect
to an identified financial market utility that is--
(i) a national bank or a Federal branch
(other than an insured branch) or a Federal
agency of a foreign bank; and
(ii) after the functions of the Director of
the Office of Thrift Supervision are
transferred under subtitle C, a Federal savings
association;
(E) the Board, with respect to an identified
financial market utility that is--
(i) a State member bank;
(ii) a branch or agency of a foreign bank
(other than any Federal branch, Federal agency,
or insured State branch of a foreign bank);
(iii) a commercial lending company owned or
controlled by a foreign bank;
(iv) an organization operating under
section 25 or 25A of the Federal Reserve Act
(12 U.S.C. 601 et seq. or 611 et seq.);
(v) a bank holding company and any non-
depository subsidiary of a bank holding company
(other than any broker, dealer, investment
company, or investment adviser registered with
the Securities and Exchange Commission, or any
futures commission merchant, commodity trading
advisor, or commodity pool operator registered
with the Commodity Futures Trading Commission);
and
(vi) after the functions of the Director of
the Office of Thrift Supervision are
transferred under subtitle C, any savings and
loan holding company and any non-depository
subsidiary of a savings and loan holding
company (other than any broker, dealer,
investment company, or investment adviser
registered with the Securities and Exchange
Commission, or any futures commission merchant,
commodity trading advisor, or commodity pool
operator registered with the Commodity Futures
Trading Commission); and
(F) the Director of the Office of Thrift
Supervision, with respect to an identified financial
market utility that is a savings association or a
savings and loan holding company, until the functions
of the Director of the Office of Thrift Supervision are
transferred under subtitle C.
If a financial market utility is subject to supervision by more
than one agency listed in paragraphs (A) through (F), and those
agencies cannot agree which has primary jurisdiction, the
Council shall decide which agency is the Supervisory Agency for
purposes of this subtitle.
(14) Systemically important and systemic importance.--The
terms ``systemically important'' and ``systemic importance''
mean a situation in which the failure of or a disruption to the
functioning of a financial market utility or the conduct of a
payment, clearing, or settlement activity could create, or
increase, the risk of significant liquidity, credit, or other
problems spreading among financial institutions or markets and
thereby threaten the stability of the financial system.
SEC. 1404. IDENTIFICATION OF SYSTEMICALLY IMPORTANT FINANCIAL MARKET
UTILITIES AND PAYMENT, CLEARING, AND SETTLEMENT
ACTIVITIES.
(a) In General.--The Council shall, at its own initiative or at the
request of the Board, consider whether to identify a financial market
utility or a payment, clearing, or settlement activity as systemically
important.
(b) Criteria for Identification.--The Council shall identify a
financial market utility or payment, clearing, or settlement activity
if the Council determines that such financial market utility or
activity is, or is likely to become, systemically important, based on
consideration of the following:
(1) The aggregate monetary value of the transactions
processed by the financial market utility or carried out
through the payment, clearing, or settlement activity.
(2) The aggregate exposure of counterparties to the
financial market utility.
(3) The relationship, interdependencies, or other
interactions of the financial market utility or payment,
clearing, or settlement activity with other financial market
utilities or payment, clearing, or settlement activities.
(4) The effect that the failure of or a disruption to the
financial market utility or payment, clearing, or settlement
activity would have on critical markets, financial
institutions, or the broader financial system.
(5) Any other factors that the Council deems appropriate.
(c) Periodic Review and Rescission of Identifications.--The Council
shall, at its own initiative or at the request of the Board--
(1) review periodically whether a financial market utility
or a payment, clearing, or settlement activity continues to be
systemically important; and
(2) rescind identification of a financial market utility or
a payment, clearing, or settlement activity that it determines
no longer should be identified.
(d) Procedure for Identifying or Rescinding a Systemically
Important Identification.--
(1) Consultation.--Before making any determination under
this section, the Council shall consult with the Board, and in
the case of a determination regarding identification or
rescission of identification of a financial market utility, the
Council shall consult with the relevant Supervisory Agency.
(2) Notice and opportunity for consideration of written
materials.--
(A) In general.--The Board shall, in an executive
capacity on behalf of the Council, provide notice to a
financial market utility or, in the case of a payment,
clearing, or settlement activity, financial
institutions, that the Council is considering whether
to identify or cease to identify such financial market
utility or such payment, clearing, or settlement
activity, including an explanation of the basis of the
Council's consideration, and provide such financial
market utilities or financial institutions 30 days to
submit written materials to inform the Council's
decision. The Council shall make its decision, and the
Board shall notify the financial market utility or
financial institutions of the Council's decision,
within 60 days of the due date for such written
materials.
(B) Emergency exception.--The Council may waive or
modify the requirements of subparagraph (A) if the
Council determines that the waiver or modification is
necessary or appropriate to prevent or mitigate an
immediate threat to financial stability posed by the
financial market utility or the payment, clearing, or
settlement activity. The Board shall, in an executive
capacity on behalf of the Council, notify the financial
market utility concerned or, in the case of a payment,
clearing, or settlement activity, financial
institutions, as soon as practicable, which shall be no
later than 24 hours after the waiver or modification in
the case of a financial market utility.
(3) Form of notification.--The Board shall, in an executive
capacity on behalf of the Council, provide notice of a decision
under this section regarding--
(A) a financial market utility to such financial
market utility by order; and
(B) a payment, clearing, or settlement activity to
financial institutions by posting a notice on the
Board's Web site and by publishing a notice in the
Federal Register.
SEC. 1405. STANDARDS FOR SYSTEMICALLY IMPORTANT FINANCIAL MARKET
UTILITIES AND PAYMENT, CLEARING, OR SETTLEMENT
ACTIVITIES.
(a) Board Requirement To Prescribe Standards.--The Board shall, by
regulation or order and in consultation with the Council and relevant
supervisory agencies, prescribe or issue risk management standards
governing the operations of identified financial market utilities and
the conduct of identified activities by financial institutions, taking
into consideration relevant international standards and existing
prudential requirements applicable to such financial market utilities
and payment, clearing, or settlement activities.
(b) Objectives and Principles.--The objectives and principles for
the risk management standards prescribed under subsection (a) shall be
to--
(1) promote robust risk management;
(2) promote safety and soundness;
(3) reduce systemic risks; and
(4) support the stability of the broader financial system.
(c) Scope.--
(1) In general.--The standards prescribed under subsection
(a) may address areas such as risk management policies and
procedures; margin and collateral requirements; participant or
counterparty default policies and procedures; the ability to
complete timely clearing and settlement of financial
transactions; capital and financial resource requirements for
identified financial market utilities; and other areas that the
Board determines, by rule or order, are necessary to achieve
the objectives and principles in subsection (b).
(2) Interaction with existing standards.--The standards
prescribed under this section may--
(A) be different than existing standards that
address the same or similar subject areas; and
(B) may address subject areas that are not covered
by existing regulations.
(3) Threshold level.--The standards prescribed under
subsection (a) governing the conduct of identified activities
shall, where appropriate, establish a threshold as to the level
or significance of engagement in the activity at which a
financial institution will become subject to the standards with
respect to that activity.
(4) Categorization and tiering.--In prescribing or issuing
standards under subsection (a) governing the conduct of
identified activities and the operations of identified
financial market utilities, the Board shall, where appropriate,
differentiate among identified financial market utilities and
identified activities by taking into consideration their risk,
complexity, leverage, frequency and dollar amount,
interconnectedness to the financial system, and any other
factors the Board deems appropriate.
(d) Compliance Required.--Identified financial market utilities and
financial institutions engaged in identified activities shall conduct
their operations in compliance with the applicable risk management
standards prescribed by the Board.
SEC. 1406. OPERATIONS AND CHANGES TO RULES, PROCEDURES, OR OPERATIONS
OF IDENTIFIED FINANCIAL MARKET UTILITIES.
(a) Reference.--For purposes of paragraphs (b) and (c), all
references to the phrase ``Supervisory Agency or the Board'' mean
``Supervisory Agency or, in the absence of a Supervisory Agency, the
Board''.
(b) Advance Notice of Proposed Changes.--
(1) Advance notice required.--Subject to subsection (c), an
identified financial market utility shall provide at least 60
days advance notice to the Supervisory Agency or the Board of
any proposed change to its rules, procedures, or operations
that could, as defined in rules of the Board, materially affect
the nature or level of risks presented by the identified
financial market utility.
(2) Terms and standards prescribed by the board.--The Board
shall prescribe regulations that define and describe the
standards for determining when notice is required to be
provided under paragraph (1).
(3) Consultation and avoidance of duplication.--In
prescribing regulations under paragraph (2), the Board shall--
(A) consult with the Commodity Futures Trading
Commission and the Securities and Exchange Commission
regarding the extent to which the regulations of those
agencies already require advance notice of rule,
procedural, or operational changes; and
(B) seek to avoid duplicative requirements under
this section whenever possible.
(4) Contents of notice.--Any notice of a proposed change
provided by an identified financial market utility under
paragraph (1) shall describe--
(A) the nature of the change;
(B) any expected effects on risks to the identified
financial market utility, its participants, or the
market; and
(C) the manner in which the identified financial
market utility plans to manage any identified risks.
(5) Additional information.--The Supervisory Agency or the
Board may require an identified financial market utility to
provide any information necessary to assess--
(A) the effect the proposed change would have on
the nature or level of risks associated with the
identified financial market utility's payment,
clearing, or settlement activities; and
(B) the sufficiency of any proposed risk management
techniques.
(6) Notice of objection.--The Supervisory Agency or the
Board will notify the identified financial market utility of
any objection regarding the proposed change before the end of
the 60-day period beginning on the later of--
(A) the date that the notice of the proposed change
is received; or
(B) the date any further information requested for
consideration of the notice is received.
(7) Change not allowed if objection.--An identified
financial market utility shall not implement a change to which
the Supervisory Agency or Board has an objection.
(8) Change allowed if no objection within 60 days.--An
identified financial market utility may implement a change if
it has not received an objection to the proposed change before
the end of the 60-day period beginning on the later of--
(A) the date that the Supervisory Agency or the
Board receives the notice of proposed change; or
(B) the date the Supervisory Agency or the Board
receives any further information that the Supervisory
Agency or the Board requests for consideration of the
notice.
(9) Review extension for novel or complex issues.--
(A) In general.--The Supervisory Agency or the
Board may, during the 60-day review period, extend the
review period for an additional 60 days for proposed
changes that raise novel or complex issues, subject to
the Supervisory Agency or the Board providing the
identified financial market utility with prompt written
notice of the extension.
(B) Extension of other time periods.--Any time
period referred to under paragraphs (6) and (8) shall
be extended by the amount of any extension of time
under clause (A).
(10) Change allowed earlier if notified of no objection.--
An identified financial market utility may implement a change
in less than 60 days from the date of receipt of the notice of
proposed change by the Supervisory Agency or the Board, or the
date the Supervisory Agency or the Board receives any further
information it requested, if--
(A) the Supervisory Agency or the Board notifies
the identified financial market utility in writing that
it does not object to the proposed change; and
(B) authorizes the identified financial market
utility to implement the change on an earlier date,
subject to any conditions imposed by the Supervisory
Agency or the Board.
(c) Emergency Changes.--
(1) In general.--An identified financial market utility may
implement a change that would otherwise require advance notice
under this subsection if it determines that--
(A) an emergency exists; and
(B) immediate implementation of the change is
necessary for the identified financial market utility
to continue to provide its services in a safe and sound
manner.
(2) Notice required within 24 hours.--Any identified
financial market utility that implements a change pursuant to a
determination under paragraph (1) shall provide notice of such
an emergency change to its Supervisory Agency or the Board as
soon as practicable, which shall be no later than 24 hours
after implementation of the change.
(3) Contents of emergency notice.--In addition to the
information required under subsection (b) for any change
requiring an advance notice, the notice under paragraph (2) of
an emergency change must describe--
(A) the nature of the emergency; and
(B) the reason the change was necessary for the
identified financial market utility to continue to
provide its services in a safe and sound manner.
(4) Modification or rescission of change may be required.--
The Supervisory Agency or the Board may require a modification
or a rescission of any change of which the Supervisory Agency
or the Board receives notice under this subsection if the
Supervisory Agency or the Board finds that the change is not
consistent with the purposes of this subtitle or any
regulations, orders, or standards prescribed, issued, or
established by the Board hereunder.
(d) Coordination Between Agencies and the Board.--In the case of an
identified financial market utility that has a Supervisory Agency other
than the Board, the Supervisory Agency shall--
(1) provide the Board concurrently with a complete copy of
any notice, request, or other information such agency issues,
submits, or receives under this subsection with respect to such
utility; and
(2) consult with the Board before taking any action on or
completing any review of a change proposed by an identified
financial market utility.
SEC. 1407. EXAMINATION OF AND ENFORCEMENT ACTIONS AGAINST IDENTIFIED
FINANCIAL MARKET UTILITIES.
(a) Examination.--Notwithstanding any other provision of law and
subject to subsection (d), the Supervisory Agency shall conduct
examinations of an identified financial market utility at least
annually in order to inform itself of--
(1) the nature of the operations of, and the risks borne
by, the identified financial market utility;
(2) the financial and operational risks presented by the
identified financial market utility to financial institutions,
critical markets, or the broader financial system;
(3) the resources and capabilities of the identified
financial market utility to monitor and control such risks;
(4) the safety and soundness of the identified financial
market utility; and
(5) the identified financial market utility's compliance
with this subtitle and the rules and orders prescribed by the
Board under this subtitle.
(b) Service Providers.--
(1) Whenever a service integral to the operation of an
identified financial market utility is performed for the
identified financial market utility by another entity, whether
an affiliate or non-affiliate and whether on or off the
premises of the identified financial market utility, the
Supervisory Agency may examine whether the provision of that
service is in compliance with applicable law, rules, orders,
and standards to the same extent as if the identified financial
market utility were performing the service on its own premises.
(c) Enforcement.--Except as provided in subsections (e) and (g), an
identified financial market utility shall be subject to the provisions
of subsections (b) through (n) of section 8 of the Federal Deposit
Insurance Act (12 U.S.C. 1818) in the same manner and to the same
extent as if the identified financial market utility were an insured
depository institution for which the Supervisory Agency is the
appropriate Federal banking agency as defined in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813).
(d) Board Involvement in Examinations.--
(1) Board consultation on examination planning.--The
Supervisory Agency shall consult with the Board regarding the
scope and methodology of any examination conducted under
subsections (a) and (b).
(2) Board participation in examination.--The Board may, in
its discretion, participate in any examination led by a
Supervisory Agency and conducted under subsections (a) and (b).
(e) Board Enforcement Recommendations.--
(1) Recommendation.--The Board may at any time recommend to
the Supervisory Agency that it take enforcement action against
an identified financial market utility. The recommendation
shall be in writing and shall provide a detailed analysis
supporting the Board's recommendation.
(2) Consideration.--The Supervisory Agency shall consider
the Board's recommendation and submit a response to the Board
within 30 days.
(3) Mediation.--If the Supervisory Agency rejects, in whole
or in the part, the Board's recommendation, then the Council
shall mediate between the parties and encourage them to reach
agreement on whether an enforcement action should be brought,
and if so by which agency.
(4) Enforcement action.--If the Supervisory Agency fails to
respond to the Board's recommendation in accordance with
paragraph (2), if the Supervisory Agency reaches agreement with
the Board that the Board should take an enforcement action, or
if the Supervisory Agency rejects the Board's recommendation
and the Council is unable to resolve the dispute under
paragraph (3), then the Board may exercise the enforcement
authority referenced in subsection (c) as if it were the
Supervisory Agency and take enforcement action against the
identified financial market utility.
(f) Identified Financial Market Utilities Without a Supervisory
Agency.--In the case of an identified financial market utility that is
not under the primary jurisdiction of a Supervisory Agency, the Board
shall have examination and enforcement authority under subsections (a)
through (c) with respect to the identified financial market utility and
any service providers in the same manner and to the same extent as if
the Board were the Supervisory Agency.
(g) Emergency Enforcement Actions by the Board.--
(1) Imminent risk of substantial harm.--The Board may,
after consulting with the Supervisory Agency, take enforcement
action against an identified financial market utility if the
Board has reasonable cause to believe that--
(A) either--
(i) an action engaged in, or contemplated
by, an identified financial market utility
(including any change proposed by the
identified financial market utility to its
rules, procedures, or operations that would
otherwise be subject to section 1406(b) or
(c)); or
(ii) the condition of an identified
financial market utility, poses an imminent
risk of substantial harm to financial
institutions, critical markets, or the broader
financial system; and
(B) the imminent risk of substantial harm precludes
the Board's use of the procedures in subsection (e).
(2) Enforcement authority.--The Board is authorized to take
action under paragraph (1) against an identified financial
market utility as if the identified financial market utility
were an insured depository institution for which the Board is
the appropriate Federal banking agency as defined in section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813).
(3) Prompt notice to supervisory agency of enforcement
action.--Within 24 hours of taking an enforcement action under
this subsection, the Board shall provide written notice to the
identified financial market utility's Supervisory Agency
containing a detailed analysis of the Board's action, with
supporting documentation included.
SEC. 1407. EXAMINATION OF AND ENFORCEMENT ACTIONS AGAINST IDENTIFIED
FINANCIAL MARKET UTILITIES.
(a) Examination.--Notwithstanding any other provision of law and
subject to subsection (d), the Supervisory Agency shall conduct
examinations of an identified financial market utility at least
annually in order to inform itself of--
(1) the nature of the operations of, and the risks borne
by, the identified financial market utility;
(2) the financial and operational risks presented by the
identified financial market utility to financial institutions,
critical markets, or the broader financial system;
(3) the resources and capabilities of the identified
financial market utility to monitor and control such risks;
(4) the safety and soundness of the identified financial
market utility; and
(5) the identified financial market utility's compliance
with this subtitle and the rules and orders prescribed by the
Board under this subtitle.
(b) Service Providers.--Whenever a service integral to the
operation of an identified financial market utility is performed for
the identified financial market utility by another entity, whether an
affiliate or nonaffiliate and whether on or off the premises of the
identified financial market utility, the Supervisory Agency may examine
whether the provision of that service is in compliance with applicable
law, rules, orders, and standards to the same extent as if the
identified financial market utility were performing the service on its
own premises.
(c) Enforcement.--Except as provided in subsections (e) and (g), an
identified financial market utility shall be subject to the provisions
of subsections (b) through (n) of section 8 of the Federal Deposit
Insurance Act (12 U.S.C. 1818) in the same manner and to the same
extent as if the identified financial market utility were an insured
depository institution for which the Supervisory Agency is the
appropriate Federal banking agency as defined in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813).
(d) Board Involvement in Examinations.--
(1) Board consultation on examination planning.--The
Supervisory Agency shall consult with the Board regarding the
scope and methodology of any examination conducted under
subsections (a) and (b).
(2) Board participation in examination.--The Board may, in
its discretion, participate in any examination led by a
Supervisory Agency and conducted under subsections (a) and (b).
(e) Board Enforcement Recommendations.--
(1) Recommendation.--The Board may at any time recommend to
the Supervisory Agency that it take enforcement action against
an identified financial market utility. The recommendation
shall be in writing and shall provide a detailed analysis
supporting the Board's recommendation.
(2) Consideration.--The Supervisory Agency shall consider
the Board's recommendation and submit a response to the Board
within 30 days.
(3) Mediation.--If the Supervisory Agency rejects, in whole
or in the part, the Board's recommendation, then the Council
shall mediate between the parties and encourage them to reach
agreement on whether an enforcement action should be brought,
and if so by which agency.
(4) Enforcement action.--If the Supervisory Agency fails to
respond to the Board's recommendation in accordance with
paragraph (2), if the Supervisory Agency reaches agreement with
the Board that the Board should take an enforcement action, or
if the Supervisory Agency rejects the Board's recommendation
and the Council is unable to resolve the dispute under
paragraph (3), then the Board may exercise the enforcement
authority referenced in subsection (c) as if it were the
Supervisory Agency and take enforcement action against the
identified financial market utility.
(f) Identified Financial Market Utilities Without a Supervisory
Agency.--In the case of an identified financial market utility that is
not under the primary jurisdiction of a Supervisory Agency, the Board
shall have examination and enforcement authority under subsections (a)
through (c) with respect to the identified financial market utility and
any service providers in the same manner and to the same extent as if
the Board were the Supervisory Agency.
(g) Emergency Enforcement Actions by the Board.--
(1) Imminent risk of substantial harm.--The Board may,
after consulting with the Supervisory Agency, take enforcement
action against an identified financial market utility if the
Board has reasonable cause to believe that--
(A) either--
(i) an action engaged in, or contemplated
by, an identified financial market utility
(including any change proposed by the
identified financial market utility to its
rules, procedures, or operations that would
otherwise be subject to section 1406(b) or
(c)); or
(ii) the condition of an identified
financial market utility, poses an imminent
risk of substantial harm to financial
institutions, critical markets, or the broader
financial system; and
(B) the imminent risk of substantial harm precludes
the Board's use of the procedures in subsection (e).
(2) Enforcement authority.--The Board is authorized to take
action under paragraph (1) against an identified financial
market utility as if the identified financial market utility
were an insured depository institution for which the Board is
the appropriate Federal banking agency as defined in section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813).
(3) Prompt notice to supervisory agency of enforcement
action.--Within 24 hours of taking an enforcement action under
this subsection, the Board shall provide written notice to the
identified financial market utility's Supervisory Agency
containing a detailed analysis of the Board's action, with
supporting documentation included.
SEC. 1408. EXAMINATION OF AND ENFORCEMENT ACTIONS AGAINST FINANCIAL
INSTITUTIONS SUBJECT TO STANDARDS FOR IDENTIFIED
ACTIVITIES.
(a) Examination.--The appropriate financial regulator shall
periodically conduct examinations of a financial institution that is
subject to the standards prescribed by the Board for an identified
activity in order to inform the appropriate financial regulator of the
following:
(1) the nature and scope of the identified activities
engaged in by the financial institution;
(2) the financial and operational risks the identified
activities engaged in by the financial institution may pose to
the safety and soundness of the financial institution;
(3) the financial and operational risks the identified
activities engaged in by the financial institution may pose to
other financial institutions, critical markets, or the broader
financial system;
(4) the resources available to and the capabilities of the
financial institution to monitor and control the risks
described in paragraphs (2) and (3); and
(5) the financial institution's compliance with this
subtitle and the rules and orders prescribed by the Board under
this subtitle.
(b) Enforcement.--The appropriate financial regulator shall take
such actions that it deems necessary to ensure that a financial
institution that is subject to the standards prescribed by the Board
for an identified activity complies with this subtitle and the rules
and orders prescribed by the Board under this subtitle.
(c) Technical Assistance.--The Board shall consult with and provide
such technical assistance as may be required by the appropriate
financial regulators to ensure that the Board's rules and orders
prescribed under this subtitle are interpreted and applied in as
consistent and uniform a manner as practicable.
(d) Delegation.--
(1) Examination.--
(A) Request to board.--The appropriate financial
regulator may request the Board to conduct, or to
participate in, an examination of a financial
institution subject to the standards prescribed by the
Board for an identified activity in order to assess the
financial institution's compliance with this subtitle
or the Board's rules or orders prescribed under this
subtitle.
(B) Examination by board.--Upon receipt of an
appropriate written request, the Board will conduct the
examination under such terms and conditions to which
the Board and the appropriate financial regulator
mutually agree.
(2) Enforcement.--
(A) Request to board.--An appropriate financial
regulator may request the Board to enforce this
subtitle or the rules or orders prescribed by the Board
under this subtitle against a financial institution
subject to the standards prescribed by the Board for an
identified activity.
(B) Enforcement by board.--Upon receipt of an
appropriate written request, the Board shall--
(i) determine whether an enforcement action
is warranted; and
(ii) if so, it shall enforce compliance
with this subtitle or the rules or orders
prescribed by the Board under this subtitle.
(C) Enforcement authority.--For purposes of
carrying out subparagraph (B), the Board shall have
authority under subsections (b) through (n) of section
8 of the Federal Deposit Insurance Act with respect to
a financial institution in the same manner and to the
same extent as if the financial institution were an
insured depository institution for which the Board is
the appropriate Federal banking agency (as defined in
section 3 of such Act).
(e) Back-Up Authority of the Board.--
(1) Examination and enforcement.--Notwithstanding any other
provision of law, the Board may--
(A) conduct an examination of any financial
institution that is subject to the standards prescribed
by the Board for an identified activity; and
(B) enforce the provisions of this subtitle or any
rules or orders prescribed by the Board under this
subtitle against any financial institution subject to
the standards prescribed by the Board for an identified
activity.
(2) Limitations.--
(A) Examination.--The Board may exercise the
authority described in paragraph (1)(A) only if the
Board has--
(i) reasonable cause to believe that a
financial institution is not in compliance with
this subtitle or the rules or orders prescribed
by the Board under this subtitle with respect
to an identified activity;
(ii) notified, in writing, the appropriate
financial regulator of its belief under clause
(i) with supporting documentation included;
(iii) requested the appropriate financial
regulator to conduct a prompt examination of
the financial institution; and
(iv) either--
(I) not been afforded a reasonable
opportunity to participate in an
examination of the financial
institution by the appropriate
financial regulator within 30 days
after the date of the Board's
notification under clause (ii); or
(II) reasonable cause to believe
that the financial institution's
noncompliance with this subtitle or the
rules or orders prescribed by the Board
under this subtitle poses a substantial
risk to other financial institutions,
critical markets, or the broader
financial system, subject to the Board
affording the appropriate financial
regulator a reasonable opportunity to
participate in the examination.
(B) Enforcement.--The Board may exercise the
authority described in paragraph (1)(B) only if the
Board has--
(i) reasonable cause to believe that a
financial institution is not in compliance with
this subtitle or the rules or orders prescribed
by the Board under this subtitle with respect
to an identified activity;
(ii) notified, in writing, the appropriate
financial regulator of its belief under clause
(i) with supporting documentation included and
with a recommendation that the appropriate
financial regulator take one or more specific
enforcement actions against the financial
institution; and
(iii) either--
(I) not been notified, in writing,
by the appropriate financial regulator
of the commencement of an enforcement
action recommended by the Board against
the financial institution within 30
days from the date of the notification
under clause (ii); or
(II) reasonable cause to believe
that the financial institution's
noncompliance with this subtitle or the
rules or orders prescribed by the Board
under this subtitle poses a substantial
risk to other financial institutions,
critical markets, or the broader
financial system, subject to the Board
notifying the appropriate financial
regulator of the Board's enforcement
action.
(3) Enforcement provisions.--The Board shall have authority
under subsections (b) through (n) of section 8 of the Federal
Deposit Insurance Act (12 U.S.C. 1818) with respect to a
financial institution subject to the standards prescribed by
the Board for an identified activity in the same manner and to
the same extent as if the financial institution were an insured
depository institution for which the Board is the appropriate
Federal banking agency (as defined in section 3 of such Act).
SEC. 1409. PROVISION OF INFORMATION, REPORTS, OR RECORDS.
(a) Information To Assess Systemic Importance.--
(1) Financial market utilities.--The Council is authorized
to require any financial market utility to submit such
information as the Council may require for the purpose of
assessing whether that financial market utility is systemically
important if the Council has reasonable cause to believe that
the financial market utility meets the standards for systemic
importance set out in section 1404 of this subtitle.
(2) Financial institutions engaged in payment, clearing, or
settlement activities.--The Council is authorized to require
any financial institution to submit such information as the
Council may require for the purpose of assessing whether any
payment, clearing, or settlement activity engaged in or
supported by a financial institution is systemically important
if the Council has reasonable cause to believe that the
activity meets the standards for systemic importance set out in
section 1404 of this subtitle.
(b) Reporting After Identification.--
(1) Identified financial market utilities.--The Board may
require an identified financial market utility to submit
reports or data to the Board in such frequency and form as
deemed necessary by the Board in order to assess the safety and
soundness of the utility and the systemic risk that the
utility's operations pose to the financial system.
(2) Financial institutions subject to the standards
prescribed by the board.--The Board may require 1 or more
financial institutions subject to the standards prescribed by
the Board for an identified activity to submit, in such
frequency and form as deemed necessary by the Board, reports
and data to the Board solely with respect to the conduct of the
identified activity and solely to assess whether--
(A) any regulation, order, standard, or guideline
prescribed by the Board with respect to the identified
activity appropriately address the risks to the
financial system presented by such activity; and
(B) the financial institutions are in compliance
with this subtitle and the rules and orders prescribed
by the Board under this subtitle with respect to the
identified activity.
(c) Coordination With Appropriate Federal Supervisory Agency.--
(1) Advance coordination.--Before directly requesting any
material information from, or imposing reporting or
recordkeeping requirements on, any financial market utility or
any financial institution engaged in a payment, clearing, or
settlement activity, the Council and the Board shall coordinate
with the Supervisory Agency for a financial market utility or
the appropriate financial regulator for a financial institution
to determine if the information is available from or may be
obtained by the agency in the form, format, or detail required
by the Council or the Board.
(2) Supervisory reports.--Notwithstanding any other
provision of law, the Supervisory Agencies, the appropriate
financial regulators, the Council, and the Board are authorized
to disclose to each other a copy of the relevant portion of any
examination report or similar report regarding any financial
market utility or any financial institution engaged in payment,
clearing, or settlement activities.
(d) Timing of Response From Appropriate Federal Supervisory
Agency.--If the information, report, records, or data requested by the
Council or the Board under subsection (c)(1) are not provided in full
by the Supervisory Agency or the appropriate financial regulator within
30 days after the date on which the material is requested, the Council
or the Board may request the information or impose recordkeeping or
reporting requirements directly on such persons as provided in
subsections (a) and (b) with notice to the Supervisory Agency or the
appropriate financial regulator.
(e) Sharing of Information.--
(1) Material concerns.--Notwithstanding any other provision
of law, the Council, the Board, the appropriate financial
regulator, and any Supervisory Agency are authorized to--
(A) promptly notify each other of material concerns
about an identified financial market utility or any
financial institution subject to the standards
prescribed by the Board for an identified activity; and
(B) share appropriate reports, information or data
relating to such concerns.
(2) Other.--Notwithstanding any other provision of law, the
Council or the Board may, under such terms and conditions it
deems appropriate and subject to reasonable assurances of
confidentiality, provide confidential supervisory information
and other information obtained under this subtitle to other
persons it deems appropriate, including the Secretary, State
financial institution supervisory agencies, foreign financial
supervisors, foreign central banks, and foreign finance
ministries.
(f) Privilege Maintained.--The Council, the Board, the appropriate
financial regulator, the Supervisory Agency, and any financial market
utility or financial institution providing reports or data under this
section shall not be deemed to have waived any privilege applicable to
those reports or data, or any portion thereof, by providing the reports
or data to the other party or by permitting the reports or data, or any
copies thereof, to be used by the other party.
(g) Disclosure Exemption.--
(1) In general.--Information obtained by the Board under
this section and any materials prepared by the Board in
connection with its supervision of identified financial market
utilities and identified activities, shall be confidential
supervisory information exempt from disclosure under section
552 of title 5, United States Code.
(2) For purposes of section 552 of title 5, United States
Code, this subsection shall be considered a statute described
in subsection (b)(3) of section 552.
SEC. 1410. RULEMAKING.
The Board is authorized to prescribe such rules and issue such
orders as may be necessary to administer and carry out the purposes of
this subtitle and prevent evasions thereof.
SEC. 1411. OTHER AUTHORITY.
The authorities granted to agencies under this subtitle are in
addition to any rulemaking, examination, enforcement, or other
authorities that those agencies may have under other law and in no way
shall be construed to limit such other authority, except that any
standards imposed by the Board under section 1405 shall supersede any
less stringent requirements established under other authority to the
extent of any conflict.
SEC. 1412. EFFECTIVE DATE.
This subtitle is effective as of the date of enactment.
Subtitle F--Improvements to the Asset-backed Securitization Process
SEC. 1501. SHORT TITLE.
This subtitle may be cited as the ``Credit Risk Retention Act of
2009''.
SEC. 1502. CREDIT RISK RETENTION.
The Securities Act of 1933 (15 U.S.C. 77a et seq.) is amended by
inserting after section 28 the following new section:
``SEC. 29. CREDIT RISK RETENTION.
``(a) In General.--
``(1) Interest in loans made by creditors.--Within 180 days
of the date of the enactment of this section, the Federal
banking agencies and the Commission shall jointly prescribe
regulations to require any creditor that makes a loan to retain
an economic interest in a material portion of the credit risk
of any such loan that the creditor transfers, sells, or conveys
to a third party, including for the purpose of including such
loan in a pool of loans backing an issuance of asset-backed
securities.
``(2) Interest in assets backing assetbacked securities.--
The Federal banking agencies and the Commission shall prescribe
regulations to require any securitizer of asset-backed
securities that are backed by assets not described in paragraph
(1) to retain an economic interest in a material portion of any
such asset used to back an issuance of securities.
``(b) Alternative Risk Retention for Credit Securitizers.--The
Federal banking agencies and the Commission may jointly apply the risk
retention requirements of this section to securitizers of loans or
particular types of loans in addition to or in substitution for any or
all of the requirements that apply to creditors that make such loans or
types of loans, if the agencies jointly determine that applying the
requirements to such securitizers would--
``(1) be consistent with helping to ensure high quality
underwriting standards for creditors, taking into account other
applicable laws, regulations, and standards; and
``(2) facilitate appropriate risk management practices by
such creditors, improve access of consumers to credit on
reasonable terms, or otherwise serve the public interest.
``(c) Standards for Regulation.--Regulations prescribed under
subsections (a) and (b) shall--
``(1) prohibit a creditor or securitizer from directly or
indirectly hedging or otherwise transferring the credit risk
such creditor or securitizer is required to retain under the
regulations;
``(2) require a creditor or securitizer to retain 10
percent of the credit risk on any loan that is transferred,
sold, or conveyed by such creditor or securitized by such
securitizer except--
``(A) if the Federal banking agencies and the
Commission determine the credit underwriting by the
creditor or the due diligence by the securitizer meets
such standards as the Federal banking agencies and the
Commission shall specify, the percentage of risk
retention may be less than 10 percent of the credit
risk, but in no case less than 5 percent of credit
risk; and
``(B) if the Federal banking agencies and the
Commission determine the underwriting by the creditor
or due diligence by the securitizer is insufficient,
the percentage of risk retention may be higher than 10
percent;
``(3) specify that the credit risk retained must be no less
at risk for loss than the average of the credit risk not so
retained; and
``(4) set the minimum duration of the required risk
retention.
``(d) Exemptions and Adjustments.--
``(1) In general.--The Federal banking agencies and the
Commission shall have authority to jointly provide exemptions
or adjustments to the requirements of this section, including
exemptions or adjustments relating to the 10 percent risk
retention threshold and the hedging prohibition.
``(2) Applicable standards.--Any exemptions or adjustments
provided under paragraph (1) shall--
``(A) be consistent with the purpose of ensuring
high quality underwriting standards for creditors,
taking into account other applicable laws, regulations,
or standards; and
``(B) facilitate appropriate risk management
practices by such creditors, improve access for
consumers to credit on reasonable terms, or otherwise
serve the public interest.
``(e) Enforcement.--
``(1) Compliance with the requirements imposed under this
subchapter shall be enforced under--
``(A) section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818), in the case of--
``(i) national banks, and Federal branches
and Federal agencies of foreign banks, by the
Office of the Comptroller of the Currency;
``(ii) member banks of the Federal Reserve
System (other than national banks), branches
and agencies of foreign banks (other than
Federal branches, Federal agencies, and insured
State branches of foreign banks), commercial
lending companies owned or controlled by
foreign banks, and organizations operating
under section 25 or 25(a) of the Federal
Reserve Act (12 U.S.C. 601 et seq., 611 et
seq.), bank holding companies, and subsidiaries
of bank holding companies (other than insured
depository institutions), by the Board; and
``(iii) banks insured by the Federal
Deposit Insurance Corporation (other than
members of the Federal Reserve System) and
insured State branches of foreign banks, by the
Board of Directors of the Federal Deposit
Insurance Corporation;
``(B) section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818), by the Director of the Office of
Thrift Supervision, in the case of a savings
association the deposits of which are insured by the
Federal Deposit Insurance Corporation and a savings and
loan holding company and to any subsidiary (other than
a bank or subsidiary of that bank); and
``(C) the Federal Credit Union Act (12 U.S.C. 1751
et seq.), by the National Credit Union Administration
Board with respect to any Federal credit union.
``(2) Except to the extent that enforcement of the
requirements imposed under this subchapter is specifically
committed to some other Government agency under subparagraph
(1), the Commission shall enforce such requirements.
``(3) The authority of the Commission under this section
shall be in addition to its existing authority to enforce the
securities laws.
``(f) Definitions.--For purposes of this section:
``(1) The term `asset-backed security' has the meaning
given such term in section 229.1101(c) of title 17, Code of
Federal Regulations, or any successor thereto.
``(2) The term `Federal banking agencies' means the Board
of Governors of the Federal Reserve System, the Office of the
Comptroller of the Currency, the Office of Thrift Supervision,
and the Federal Deposit Insurance Corporation.
``(3) The term `insured depository institution' has the
meaning given such term in section 3(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(c)).
``(4) The term `securitization vehicle' means a trust,
corporation, partnership, limited liability entity, special
purpose entity, or other structure that--
``(A) is the issuer, or is created by the issuer,
of pass-through certificates, participation
certificates, asset-backed securities, or other similar
securities backed by a pool of assets that includes
loans; and
``(B) holds such loans.
``(5) The term `securitizer' means the person that
transfers, conveys, or assigns, or causes the transfer,
conveyance, or assignment of, loans, including through a
special purpose vehicle, to any securitization vehicle,
excluding any trustee that holds such loans for the benefit of
the securitization vehicle.''.
SEC. 1503. PERIODIC AND OTHER REPORTING UNDER THE SECURITIES EXCHANGE
ACT OF 1934 FOR ASSET-BACKED SECURITIES.
Section 15(d) of Securities Exchange Act of 1934 (15 U.S.C. 78o(d))
is amended--
(1) by inserting ``, other than securities of any class of
asset-backed security (as defined in section 229.1101(c) of
title 17, Code of Federal Regulations, or any successor
thereto),'' after ``securities of each class'';
(2) by inserting at the end the following: ``The Commission
may by rules and regulations provide for the suspension or
termination of the duty to file under this subsection for any
class of issuer of asset-backed security upon such terms and
conditions and for such period or periods as it deems necessary
or appropriate in the public interest or for the protection of
investors. The Commission may, for the purposes of this
subsection, classify issuers and prescribe requirements
appropriate for each class of issuer of asset-backed
security.''; and
(3) by inserting after the fifth sentence the following:
``The Commission shall adopt regulations under this subsection
requiring each issuer of an asset-backed security to disclose,
for each tranche or class of security, information regarding
the assets backing that security. In adopting regulations under
this subsection, the Commission shall set standards for the
format of the data provided by issuers of an asset-backed
security, which shall, to the extent feasible, facilitate
comparison of such data across securities in similar types of
asset classes. The Commission shall require issuers of asset-
backed securities at a minimum to disclose asset-level or loan-
level data necessary for investors to independently perform due
diligence. Asset-level or loan-level data shall include data
with unique identifiers relating to loan brokers or
originators, the nature and extent of the compensation of the
broker or originator of the assets backing the security, and
the amount of risk retention of the originator or the
securitizer of such assets.''.
SEC. 1504. REPRESENTATIONS AND WARRANTIES IN ASSET-BACKED OFFERINGS.
The Commission shall prescribe regulations on the use of
representations and warranties in the asset-backed securities market
that--
(1) require credit rating agencies to include in reports
accompanying credit ratings a description of the
representations, warranties, and enforcement mechanisms
available to investors and how they differ from
representations, warranties, and enforcement mechanisms in
similar issuances; and
(2) require disclosure on fulfilled repurchase requests
across all trusts aggregated by originator, so that investors
may identify asset originators with clear underwriting
deficiencies.
SEC. 1505. EXEMPTED TRANSACTIONS UNDER THE SECURITIES ACT OF 1933.
(a) In General.--Section 4 of the Securities Act of 1933 (15 U.S.C.
77d) is amended--
(1) by striking paragraph (5); and
(2) by redesignating paragraph (6) as paragraph (5).
(b) Conforming Amendment.--Section 3(a)(4)(B)(vii)(I) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)(B)(vii)(I)) is
amended by striking ``4(6)'' and inserting ``4(5)''.
Subtitle G--Enhanced Resolution Authority
SEC. 1601. SHORT TITLE.
This subtitle may be cited as the ``Resolution Authority for Large,
Interconnected Financial Companies Act of 2009''.
SEC. 1602. DEFINITIONS.
For purposes of this subtitle, the following definitions shall
apply:
(1) Appropriate federal regulatory agency.--
(A) Corporation and commission.--The term
``appropriate Federal regulatory agency'' means--
(i) the Corporation; and
(ii) the Commission, if the financial
company, or an affiliate thereof, is a broker
or dealer registered with the Commission under
section 15(b) of the Securities Exchange Act of
1934 (15 U.S.C. 78o(b) (other than an insured
depository institution)).
(B) Rules of construction.--More than 1 agency may
be an appropriate Federal regulatory agency with
respect to any given financial company. In such
instances, the Commission shall be the appropriate
Federal regulatory agency for purposes of section 1603
if the largest subsidiary of the financial company is a
broker or dealer as measured by total assets as of the
end of the previous calendar quarter, and otherwise the
Corporation shall be the appropriate Federal regulatory
agency for purposes of section 1603.
(2) Bridge financial company.--The term ``bridge financial
company'' means a new financial company organized in accordance
with section 1609(h) by the Corporation.
(3) Commission.--The term ``Commission'' means the
Securities and Exchange Commission.
(4) Corporation.--The term ``Corporation'' means the
Federal Deposit Insurance Corporation.
(5) Covered financial company.--The term ``covered
financial company'' means a financial company for which a
determination has been made pursuant to and in accordance with
section 1603(b).
(6) Covered subsidiary.--The term ``covered subsidiary''
means a subsidiary covered in paragraph (9)(B)(iv) of this
section.
(7) Customer property.--The term ``customer property'' has
the meaning ascribed to it in the Securities Investor
Protection Act of 1970.
(8) Federal reserve board.--The term ``Federal Reserve
Board'' means the Board of Governors of the Federal Reserve
System.
(9) Financial company.--The term ``financial company''
means any company that--
(A) is incorporated or organized under Federal law
or the laws of any State; and
(B) is--
(i) a bank holding company as defined in
section 2(a) of the Bank Holding Company Act of
1956 (12 U.S.C. 1841(a));
(ii) any identified financial holding
company, as defined in section 1000(b)(5), that
has been subjected to heightened prudential
regulation;
(iii) any company predominantly engaged in
activities that are financial in nature or
incidental thereto for purposes of section 4(k)
of the Bank Holding Company Act of 1956 (12
U.S.C. 1843(k)) or that have been identified
for heightened prudential standards under
section 1106 of this title; or
(iv) any subsidiary of companies described
in clauses (i) through (iii) (other than an
insured depository institution, any broker or
dealer registered with the Commission under
section 15(b) of the Securities Exchange Act of
1934 (15 U.S.C. 78o(b)) that is a member of the
Securities Investor Protection Corporation, or
an insurance company).
(10) Fund.--The term ``Fund'' means the Systemic Resolution
Fund established in accordance with section 1609(n).
(11) Identified financial holding company.--The term
``identified financial holding company'' means a financial
company that is subject to heightened prudential standards, as
defined in section 1000(b)(5) of this Act.
(12) Insurance company.--The term ``insurance company''
means a domestic insurance company, as that term is defined for
purposes of title 11 of the United States Code.
(13) Secretary.--The term ``Secretary'' shall mean the
Secretary of the Treasury.
(14) State.--The term ``State'' means any State,
commonwealth, territory, or possession of the United States,
the District of Columbia, the Commonwealth of Puerto Rico, the
Commonwealth of the Northern Mariana Islands, American Samoa,
Guam, and the United States Virgin Islands.
(15) Certain other terms.--The terms ``affiliate'',
``company'', ``control'', ``deposit'', ``depository
institution'', ``foreign bank'', ``insured depository
institution'', and ``subsidiary'' have the same meanings as in
section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813).
SEC. 1603. SYSTEMIC RISK DETERMINATION.
(a) Written Recommendation of the Federal Reserve Board and the
Appropriate Federal Regulatory Agency.--
(1) Vote required.--At the request of the Secretary or the
Chairman of the Federal Reserve Board or, in cases where an
financial company has a broker or dealer as its largest
subsidiary as measured by total assets as of the end of the
previous calendar quarter, the Commission, the Federal Reserve
Board and the appropriate Federal regulatory agency shall, or
on their own initiative the Federal Reserve Board and the
appropriate Federal regulatory agency may, consider whether to
make the written recommendation provided for in paragraph (2)
with respect to a financial company that is an identified
financial holding company, which recommendation shall be made
upon a vote of not less than two-thirds of the members of the
Federal Reserve Board then serving and two-thirds of the
members of the board or of the commission then serving of the
appropriate Federal regulatory agency, as applicable.
(2) Recommendation required.--Any written recommendations
made by the Federal Reserve Board and the appropriate Federal
regulatory agency under paragraph (1) shall contain the
following:
(A) A description of the effect that the default of
the identified financial holding company would have on
economic conditions or financial stability in the
United States.
(B) A recommendation regarding the nature and the
extent of actions that the Board and the appropriate
Federal regulatory agency recommend be taken under
section 1604 regarding the identified financial holding
company.
(b) Determination by the Secretary.--Notwithstanding any other
provision of Federal law or the law of any State, if, upon the written
recommendation of the Federal Reserve Board and the board of directors
or commission of the appropriate Federal regulatory agency as provided
for in subsection (a)(1), the Secretary (in consultation with the
President) determines that--
(1) the identified financial holding company is in default
or is in danger of default;
(2) the failure of the identified financial holding company
and its resolution under otherwise applicable Federal or State
law would have serious adverse effects on financial stability
or economic conditions in the United States; and
(3) any action under section 1604 would avoid or mitigate
such adverse effects, taking into consideration the
effectiveness of the action in mitigating potential adverse
effects on the financial system or economic conditions, the
cost to the general fund of the Treasury, and the potential to
increase moral hazard on the part of creditors, counterparties,
and shareholders in the identified financial holding company,
then the Secretary must take action under section 1604(a), the
Corporation must act in accordance with section 1604(b), and the
Corporation may take one or more actions specified in section 1604(c)
in accordance with the requirements of that subsection.
(c) Documentation and Review.--
(1) In general.--The Secretary shall--
(A) document any determination under subsection
(b); and
(B) retain the documentation for review under
paragraph (2).
(2) GAO review.--The Comptroller General of the United
States shall review and report to the Congress on any
determination under subsection (b), including--
(A) the basis for the determination;
(B) the purpose for which any action was taken
pursuant thereto; and
(C) the likely effect of the determination and such
action on the incentives and conduct of identified
financial holding companies and their creditors,
counterparties, and shareholders.
(3) Report to congress.--Within 30 days after a
determination is made under subsection (b), the Secretary shall
provide written notice of the determination to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives. The notice shall include a description of the
basis for the determination.
(d) Default or in Danger of Default.--For purposes of subsection
(b), an identified financial holding company shall be considered to be
in default or in danger of default if any of the following conditions
exist, as determined in accordance with that subsection:
(1) A case has been, or likely will promptly be, commenced
with respect to the identified financial holding company under
title 11, United States Code.
(2) The identified financial holding company is critically
undercapitalized, as such term has been or may be defined by
the Federal Reserve Board.
(3) The identified financial holding company has incurred,
or is likely to incur, losses that will deplete all or
substantially all of its capital, and there is no reasonable
prospect for the company to avoid such depletion without
assistance under section 1604.
(4) The identified financial holding company's assets are,
or are likely to be, less than its obligations to creditors and
others.
(5) The identified financial holding company is, or is
likely to be, unable to pay its obligations (other than those
subject to a bona fide dispute) in the normal course of
business.
SEC. 1604. RESOLUTION; STABILIZATION.
(a) Appointment of Receiver.--Upon the Secretary making a
determination in accordance with section 1603(b), the Secretary shall
appoint the Corporation as receiver or qualified receiver for the
covered financial company. There shall be a strong presumption that the
Secretary will appoint the Corporation as receiver. The presumption may
be overcome only if the Secretary, the Federal Reserve Board, and the
Corporation agree that the appointment of a qualified receiver is
necessary to avoid or mitigate serious adverse effects on financial
stability.
(b) Consultation.--The Corporation, as receiver or qualified
receiver--
(1) shall consult with the regulators of the covered
financial company and its covered subsidiaries for purposes of
ensuring an orderly resolution of the covered financial
company;
(2) may consult with, or under section 1609(a)(1)(B)(v) or
section 1609(a)(1)(K) acquire services of, any outside experts
as appropriate to inform and aid the Corporation in the
resolution process; and
(3) shall consult with the primary regulators of any
subsidiaries of the covered financial company that are not
covered subsidiaries as described in section 1602(9)(B)(iv) and
coordinate with such regulators regarding the treatment of such
solvent subsidiaries and the separate resolution of any such
insolvent subsidiaries under other governmental authority, as
appropriate.
(c) Emergency Stabilization After Appointment of Receiver or
Qualified Receiver.--Upon the Secretary appointing the Corporation as
receiver or qualified receiver under subsection (a), the Corporation
may, in its corporate capacity and as an agency of the United States,
with the approval of the Secretary and subject to the conditions in
subsections (d) through (e), take the following actions under such
terms and conditions that the Corporation and the Secretary jointly
deem appropriate:
(1) Making loans to, or purchasing any debt obligation of,
the covered financial company or any covered subsidiary.
(2) Purchasing assets of the covered financial company or
any covered subsidiary directly or through an entity
established by the Corporation for such purpose.
(3) Assuming or guaranteeing the obligations of the covered
financial company or any covered subsidiary to one or more
third parties.
(4) Acquiring any type of equity interest or security of
the covered financial company or any covered subsidiary.
(5) Taking a lien on any or all assets of the covered
financial company or any covered subsidiary, including a first
priority lien on all unencumbered assets of the company or any
covered subsidiary to secure repayment of any transactions
conducted under this subsection.
(6) Selling or transferring all, or any part thereof, of
such acquired assets, liabilities, obligations, equity
interests or securities of the covered financial company or any
covered subsidiary.
(d) Mandatory Terms and Conditions for All Stabilization Actions.--
The Corporation as receiver or qualified receiver is authorized to take
the stabilization actions listed in subsection (c) only if--
(1) the Secretary and the Corporation determine that such
action is necessary for the purpose of financial stability and
not for the purpose of preserving the covered financial
company;
(2) the Corporation ensures that the shareholders of a
covered financial company do not receive payment until after
all other claims are fully paid;
(3) the Corporation ensures that unsecured creditors bear
losses; and
(4) the Corporation ensures that management responsible for
the failed condition of the covered financial company is
removed (if such management has not already been removed at the
time the Corporation is appointed as receiver or qualified
receiver).
(e) Recoupment of Funds Expended for Systemic Stabilization
Purposes.--Amounts expended from the Fund by the Corporation under this
section shall be repaid in full to the Fund from the following sources:
(1) Resolution process.--Amounts attributable to--
(A) the proceeds of the sale of, or income from,
the assets of the covered financial company; and
(B) the proceeds of the transfer of any securities
obtained under subsection (c).
(2) Industry assessments.--If the sources described in
paragraph (1) are insufficient to repay the amount of the
stabilization action in full, the difference shall be recouped
through assessments on financial companies in accordance with
section 1609(o).
SEC. 1605. JUDICIAL REVIEW.
If a receiver or qualified receiver is appointed, the covered
financial company may, not later than 30 days thereafter, bring an
action in the United States district court for the judicial district in
which the home office of such covered financial company is located, or
in the United States District Court for the District of Columbia, for
an order requiring that the receiver or qualified receiver be removed,
and the court shall, upon the merits, dismiss such action or direct the
receiver or qualified receiver to be removed. Review of such an action
shall be limited to the appointment of a receiver or qualified receiver
under section 1604.
SEC. 1606. DIRECTORS NOT LIABLE FOR ACQUIESCING IN APPOINTMENT OF
RECEIVER OR QUALIFIED RECEIVER.
The members of the board of directors (or body performing similar
functions) of a covered financial company shall not be liable to the
covered financial company's shareholders or creditors for acquiescing
in or consenting in good faith to--
(1) the Secretary's appointment of the Corporation as
receiver or qualified receiver for the covered financial
company under section 1604; or
(2) an acquisition, combination, or transfer of assets or
liabilities under section 1609.
SEC. 1607. TERMINATION AND EXCLUSION OF OTHER ACTIONS.
The Corporation's acting as receiver or qualified receiver for a
covered financial company under this title shall immediately, and by
operation of law, terminate any case commenced with respect to the
covered financial company under title 11, United States Code, or any
proceeding under any State insolvency law with respect to the covered
financial company, and no such case or proceeding may be commenced with
respect to the covered financial company at any time while the
Corporation acts as receiver or qualified receiver for the covered
financial company.
SEC. 1608. RULEMAKING.
The Corporation may prescribe such rules or regulations it
considers necessary or appropriate to implement the provisions of this
title.
SEC. 1609 POWERS AND DUTIES OF CORPORATION.
(a) Powers and Authorities.--
(1) General powers.--
(A) Successor to covered financial company.--The
Corporation shall, upon appointment as receiver or
qualified receiver for a covered financial company
under section 1604, and by operation of law, succeed
to--
(i) all rights, titles, powers, and
privileges of the covered financial company,
and of any stockholder, member, officer, or
director of such institution with respect to
the covered financial company and the assets of
the covered financial company; and
(ii) title to the books, records, and
assets of any previous receiver or other legal
custodian of such covered financial company.
(B) Operate the covered financial company.--The
Corporation as receiver or qualified receiver for a
covered financial company may--
(i) take over the assets of and operate the
covered financial company with all the powers
of the members or shareholders, the directors,
and the officers of the covered financial
company and conduct all business of the covered
financial company;
(ii) collect all obligations and money due
the covered financial company;
(iii) perform all functions of the covered
financial company in the name of the covered
financial company;
(iv) preserve and conserve the assets and
property of the covered financial company; and
(v) provide by contract for assistance in
fulfilling any function, activity, action, or
duty of the Corporation as receiver or
qualified receiver.
(C) Functions of covered financial company's
officers, directors, and shareholders.--
(i) In general.--The Corporation may
provide for the exercise of any function by any
member or stockholder, director, or officer of
any covered financial company for which the
Corporation has been appointed as receiver or
qualified receiver under this section.
(ii) Presumption.--There shall be a strong
presumption that the Corporation, as receive or
qualified receiver, will remove management
responsible for the failed condition of the
covered financial company (if such management
has not already been removed at the time the
Corporation is appointed as receiver or
qualified receiver).
(D) Powers of and duration as qualified receiver.--
(i) In general.--The Corporation may, as
qualified receiver, and subject to all legally
enforceable and perfected security interests in
the assets of the covered financial company,
take such action as may be--
(I) necessary to put the covered
financial company in a sound and
solvent condition; and
(II) appropriate to carry on the
business of the covered financial
company and preserve and conserve the
assets and property of the covered
financial company.
(ii) Duration.--The status of the
Corporation as qualified receiver shall
terminate at the end of the 2-year period
following the date of its appointment as
qualified receiver, unless the Corporation,
with the approval of the Secretary and the
Federal Reserve Board, terminates the qualified
receivership before the end of the 2-year
period. At the end of the two-year period, the
qualified receivership shall become a
receivership with the Corporation as receiver.
(iii) Extension of qualified
receivership.--The Corporation may, with the
approval of the Secretary and the Federal
Reserve Board, extend the qualified
receivership for 3 additional 1-year periods
beyond the initial two-year period if necessary
to promote financial stability.
(E) Additional powers as receiver.--The Corporation
may, as receiver, and subject to all legally
enforceable and perfected security interests, place the
covered financial company in liquidation and proceed to
realize upon the assets of the covered financial
company in such manner as the Corporation deems
appropriate, including through the sale of assets, the
transfer of assets to a bridge financial company
established under subsection (h), or the exercise of
any other rights or privileges granted to the receiver
under this section.
(F) Organization of new companies.--The Corporation
as receiver may organize a bridge financial company
under subsection (h).
(G) Merger; transfer of assets and liabilities.--
(i) In general.--Subject to clause (ii),
the Corporation as receiver or qualified
receiver may--
(I) merge the covered financial
company with another company; or
(II) transfer any asset or
liability of the covered financial
company (including assets and
liabilities associated with any trust
or custody business) without obtaining
any approval, assignment, or consent
with respect to such transfer.
(ii) Federal agency approval; antitrust
review.--
(I) In general.--If a transaction
described in clause (i) requires
approval by a Federal agency, the
transaction may not be consummated
before the 5th calendar day after the
date of approval by the Federal agency
responsible for such approval with
respect thereto. If, in connection with
any such approval, a report on
competitive factors is required, the
Federal agency responsible for such
approval shall promptly notify the
Attorney General of the proposed
transaction and the Attorney General
shall provide the required report
within 10 days of the request. If a
filing is required under the Hart
Scott-Rodino Antitrust Improvements Act
of 1976 with the Department of Justice
or the Federal Trade Commission, the
waiting period shall expire not later
than the 30th day following such filing
notwithstanding any other provision of
Federal law or any attempt by any
Federal agency to extend such waiting
period, and no further request for
information by any Federal agency shall
be permitted.
(II) Emergency.--If the Secretary
in consultation with the Chairman of
the Federal Reserve Board has found
that the Corporation must act
immediately to prevent the probable
failure of 1 or more of the covered
financial companies involved, the
approvals and filings referred to in
subclause (I) shall not be required and
the transactions may be consummated
immediately by the Corporation.
(H) Payment of valid obligations.--The Corporation,
as receiver or qualified receiver, shall, to the extent
funds are available, pay all valid obligations of the
covered financial company that are due and payable at
the time of the appointment of the Corporation as
receiver or qualified receiver in accordance with the
prescriptions and limitations of this title.
(I) Subpoena authority.--
(i) In general.--The Corporation may, for
purposes of carrying out any power, authority,
or duty with respect to a covered financial
company (including determining any claim
against the covered financial company and
determining and realizing upon any asset of any
person in the course of collecting money due
the covered financial company), exercise any
power established under section 8(n) of the
Federal Deposit Insurance Act as if the covered
financial company were an insured depository
institution.
(ii) Rule of construction.--This section
shall not be construed as limiting any rights
that the Corporation, in any capacity, might
otherwise have to exercise any powers described
in clause (i) under any other provision of law.
(J) Incidental powers.--The Corporation, as
receiver or qualified receiver, may--
(i) exercise all powers and authorities
specifically granted to receivers or qualified
receivers under this section and such
incidental powers as shall be necessary to
carry out such powers; and
(ii) take any action authorized by this
section, which the Corporation determines is in
the best interests of the covered financial
company, its customers, its creditors, its
counterparties, or the stability of the
financial system.
(K) Utilization of private sector.--In carrying out
its responsibilities in the management and disposition
of assets from a covered financial company, the
Corporation, as receiver or qualified receiver, may
utilize the services of private persons, including real
estate and loan portfolio asset management, property
management, auction marketing, legal, and brokerage
services, if such services are available in the private
sector and the Corporation determines utilization of
such services is practicable, efficient, and cost
effective.
(L) Shareholders and creditors of covered financial
company.--Notwithstanding any other provision of law,
the Corporation as receiver or qualified receiver for a
covered financial company pursuant to this section and
its succession, by operation of law, to the rights,
titles, powers, and privileges described in
subparagraph (A) shall terminate all rights and claims
that the stockholders and creditors of the covered
financial company may have against the assets of the
covered financial company or the Corporation arising
out of their status as stockholders or creditors,
except for their right to payment, resolution, or other
satisfaction of their claims, as permitted under this
section. The Corporation shall ensure that shareholders
and unsecured creditors bear losses, consistent with
the priority of claims provision s in section 1609(b).
(M) Coordination with foreign financial
authorities.--The Corporation as receiver or qualified
receiver for a covered financial company shall
coordinate with the appropriate foreign financial
authorities regarding the resolution of subsidiaries of
the covered financial company that are established in a
country other than the United States.
(2) Authority of corporation to determine claims.--
(A) In general.--The Corporation may, as receiver,
determine claims in accordance with the requirements of
this subsection and regulations prescribed under
paragraph (3).
(B) Notice requirements.--The receiver, in any case
involving the liquidation or winding up of the affairs
of a covered financial company, shall--
(i) promptly publish a notice to the
covered financial company's creditors to
present their claims, together with proof, to
the receiver by a date specified in the notice
which shall be not less than 90 days after the
publication of such notice; and
(ii) republish such notice approximately 1
month and 2 months, respectively, after the
publication under clause (i).
(C) Mailing required.--The receiver shall mail a
notice similar to the notice published under
subparagraph (B)(i) at the time of such publication to
any creditor shown on the covered financial company's
books--
(i) at the creditor's last address
appearing in such books; or
(ii) upon discovery of the name and address
of a claimant not appearing on the covered
financial company's books, within 30 days after
the discovery of such name and address.
(3) Rulemaking authority relating to determination of
claims.--
(A) In general.--Subject to subsection (b), the
Corporation shall prescribe rules and regulations
regarding the allowance or disallowance of claims by
the Corporation and providing for administrative
determination of claims and review of such
determination.
(B) Existing rules.--The Corporation may elect to
use the regulations adopted pursuant to the provisions
of section 11 of the Federal Deposit Insurance Act with
respect to the determination of claims for a covered
financial company as if the covered financial company
were an insured depository institution.
(4) Procedures for determination of claims.--
(A) Determination period.--
(i) In general.--Before the end of the 180-
day period beginning on the date any claim
against a covered financial company is filed
with the Corporation as receiver, the
Corporation shall determine whether to allow or
disallow the claim and shall notify the
claimant of any determination with respect to
such claim.
(ii) Extension of time.--The period
described in clause (i) may be extended by a
written agreement between the claimant and the
Corporation.
(iii) Mailing of notice sufficient.--The
requirements of clause (i) shall be deemed to
be satisfied if the notice of any determination
with respect to any claim is mailed to the last
address of the claimant which appears--
(I) on the covered financial
company's books;
(II) in the claim filed by the
claimant; or
(III) in documents submitted in
proof of the claim.
(iv) Contents of notice of disallowance.--
If any claim filed under clause (i) is
disallowed, the notice to the claimant shall
contain--
(I) a statement of each reason for
the disallowance; and
(II) the procedures available for
obtaining agency review of the
determination to disallow the claim or
judicial determination of the claim.
(B) Allowance of proven claim.--The Corporation
shall allow any claim received on or before the date
specified in the notice published under paragraph
(2)(B)(i) by the Corporation from any claimant which is
proved to the satisfaction of the Corporation.
(C) Disallowance of claims filed after end of
filing period.--
(i) In general.--Except as provided in
clause (ii), claims filed after the date
specified in the notice published under
paragraph (2)(B)(i) shall be disallowed and
such disallowance shall be final.
(ii) Certain exceptions.--Clause (i) shall
not apply with respect to any claim filed by
any claimant after the date specified in the
notice published under paragraph (2)(B)(i) and
such claim may be considered by the receiver
if--
(I) the claimant did not receive
notice of the appointment of the
receiver in time to file such claim
before such date; and
(II) such claim is filed in time to
permit payment of such claim.
(D) Authority to disallow claims.--
(i) In general.--The Corporation may
disallow any portion of any claim by a creditor
or claim of security, preference, or priority
which is not proved to the satisfaction of the
Corporation.
(ii) Payments to less than fully secured
creditors.--In the case of a claim of a
creditor against a covered financial company
which is secured by any property or other asset
of such covered financial company, the
receiver--
(I) may treat the portion of such
claim which exceeds an amount equal to
the fair market value of such property
or other asset as an unsecured claim
against the covered financial company;
and
(II) may not make any payment with
respect to such unsecured portion of
the claim other than in connection with
the disposition of all claims of
unsecured creditors of the covered
financial company.
(iii) Exceptions.--No provision of this
paragraph shall apply with respect to--
(I) any extension of credit from
any Federal Reserve bank, or the
Corporation, to any covered financial
company; or
(II) subject to clause (ii), any
legally enforceable or perfected
security interest in the assets of the
covered financial company securing any
such extension of credit.
(E) No judicial review of determination pursuant to
subparagraph (d).--No court may review the Corporation
determination pursuant to subparagraph (D) to disallow
a claim.
(F) Legal effect of filing.--
(i) Statute of limitation tolled.--For
purposes of any applicable statute of
limitations, the filing of a claim with the
Corporation shall constitute a commencement of
an action.
(ii) No prejudice to other actions.--
Subject to paragraph (9), the filing of a claim
with the Corporation shall not prejudice any
right of the claimant to continue any action
which was filed before the appointment of the
Corporation as receiver for the covered
financial company.
(5) Provision for judicial determination of claims.--
(A) In general.--Before the end of the 60-day
period beginning on the earlier of--
(i) the end of the period described in
paragraph (4)(A)(i) (or, if extended by
agreement of the Corporation and the claimant,
the period described in paragraph (4)(A)(ii))
with respect to any claim against a covered
financial company for which the Corporation is
receiver; or
(ii) the date of any notice of disallowance
of such claim pursuant to paragraph (4)(A)(i),
the claimant may file suit on a claim (or continue an
action commenced before the appointment of the
receiver) in the district or territorial court of the
United States for the district within which the covered
financial company's principal place of business is
located or the United States District Court for the
District of Columbia (and such court shall have
jurisdiction to hear such claim).
(B) Statute of limitations.--If any claimant fails
to file suit on such claim (or continue an action
commenced before the appointment of the receiver)
before the end of the 60-day period described in
subparagraph (A), the claim shall be deemed to be
disallowed (other than any portion of such claim which
was allowed by the receiver) as of the end of such
period, such disallowance shall be final, and the
claimant shall have no further rights or remedies with
respect to such claim.
(6) Expedited determination of claims.--
(A) Establishment required.--The Corporation shall
establish a procedure for expedited relief outside of
the routine claims process established under paragraph
(4) for claimants who--
(i) allege the existence of legally valid
and enforceable or perfected security interests
in assets of any covered financial company for
which the Corporation has been appointed as
receiver; and
(ii) allege that irreparable injury will
occur if the routine claims procedure is
followed.
(B) Determination period.--Before the end of the
90-day period beginning on the date any claim is filed
in accordance with the procedures established pursuant
to subparagraph (A), the Corporation shall--
(i) determine--
(I) whether to allow or disallow
such claim; or
(II) whether such claim should be
determined pursuant to the procedures
established pursuant to paragraph (4);
and
(ii) notify the claimant of the
determination, and if the claim is disallowed,
provide a statement of each reason for the
disallowance and the procedure for obtaining
judicial determination.
(C) Period for filing or renewing suit.--Any
claimant who files a request for expedited relief shall
be permitted to file a suit, or to continue such a suit
filed before the appointment of the Corporation as
receiver, seeking a determination of the claimant's
rights with respect to such security interest after the
earlier of--
(i) the end of the 90-day period beginning
on the date of the filing of a request for
expedited relief; or
(ii) the date the Corporation denies the
claim.
(D) Statute of limitations.--If an action described
in subparagraph (C) is not filed, or the motion to
renew a previously filed suit is not made, before the
end of the 30-day period beginning on the date on which
such action or motion may be filed in accordance with
subparagraph (B), the claim shall be deemed to be
disallowed as of the end of such period (other than any
portion of such claim which was allowed by the
receiver), such disallowance shall be final, and the
claimant shall have no further rights or remedies with
respect to such claim.
(E) Legal effect of filing.--
(i) Statute of limitation tolled.--For
purposes of any applicable statute of
limitations, the filing of a claim with the
receiver shall constitute a commencement of an
action.
(ii) No prejudice to other actions.--
Subject to paragraph (9), the filing of a claim
with the receiver shall not prejudice any right
of the claimant to continue any action which
was filed before the appointment of the
Corporation as receiver for the covered
financial company.
(7) Agreements against interest of the receiver.--No
agreement that tends to diminish or defeat the interest of the
Corporation as receiver in any asset acquired by the receiver
under this section shall be valid against the receiver unless
such agreement is in writing and executed by an authorized
officer or representative of the covered financial company.
(8) Payment of claims.--
(A) In general.--The Corporation as receiver may,
in its discretion and to the extent funds are
available, pay creditor claims, in such manner and
amounts as are authorized under this section, which
are--
(i) allowed by the receiver;
(ii) approved by the Corporation pursuant
to a final determination pursuant to paragraph
(6); or
(iii) determined by the final judgment of
any court of competent jurisdiction.
(B) Payment of dividends on claims.--The receiver
may, in the receiver's sole discretion and to the
extent otherwise permitted by this section, pay
dividends on proven claims at any time, and no
liability shall attach to the Corporation (in the
Corporation's capacity as receiver), by reason of any
such payment, for failure to pay dividends to a
claimant whose claim is not proved at the time of any
such payment.
(C) Rulemaking authority of corporation.--The
Corporation may prescribe such rules, including
definitions of terms, as it deems appropriate to
establish a single uniform interest rate for, or to
make payments of post insolvency interest to creditors
holding proven claims against the receivership estates
of a covered financial company following satisfaction
by the receiver of the principal amount of all creditor
claims.
(9) Suspension of legal actions.--
(A) In general.--After the appointment of the
Corporation as receiver or qualified receiver for a
covered financial company, the Corporation may request
a stay for a period not to exceed--
(i) 45 days, in the case of any qualified
receiver; and
(ii) 90 days, in the case of any receiver,
in any noncriminal judicial action or proceeding to
which such covered financial company is or becomes a
party.
(B) Grant of stay by all courts required.--Upon
receipt of a request by the Corporation pursuant to
subparagraph (A) for a stay of any non-criminal
judicial action or proceeding in any court with
jurisdiction of such action or proceeding, the court
shall grant such stay as to all parties.
(10) Additional rights and duties.--
(A) Prior final adjudication.--The Corporation
shall abide by any final unappealable judgment of any
court of competent jurisdiction which was rendered
before the appointment of the Corporation as receiver
or qualified receiver.
(B) Rights and remedies of receiver.--In the event
of any appealable judgment, the Corporation as receiver
or qualified receiver shall--
(i) have all the rights and remedies
available to the covered financial company
(before the appointment of the receiver or
qualified receiver under section 1604) and the
Corporation, including but not limited to
removal to Federal court and all appellate
rights; and
(ii) not be required to post any bond in
order to pursue such remedies.
(C) No attachment or execution.--No attachment or
execution may issue by any court upon assets in the
possession of the receiver.
(D) Limitation on judicial review.--Except as
otherwise provided in this subsection, no court shall
have jurisdiction over--
(i) any claim or action for payment from,
or any action seeking a determination of rights
with respect to, the assets of any covered
financial company for which the Corporation has
been appointed receiver, including any assets
which the Corporation may acquire from itself
as such receiver; or
(ii) any claim relating to any act or
omission of such covered financial company or
the Corporation as receiver.
(E) Disposition of assets.--In exercising any
right, power, privilege, or authority as receiver or
qualified receiver in connection with any covered
financial company for which the Corporation is acting
as receiver or qualified receiver under this section,
the Corporation shall, to the greatest extent
practicable, conduct its operations in a manner which--
(i) maximizes the net present value return
from the sale or disposition of such assets;
(ii) minimizes the amount of any loss
realized in the resolution of cases;
(iii) minimizes the cost to the general
fund of the Treasury;
(iv) mitigates the potential for serious
adverse effects to the financial system and the
U.S. economy;
(v) ensures timely and adequate competition
and fair and consistent treatment of offerors;
and
(vi) prohibits discrimination on the basis
of race, sex, or ethnic groups in the
solicitation and consideration of offers.
(11) Statute of limitations for actions brought by
receiver.--
(A) In general.--Notwithstanding any provision of
any contract, the applicable statute of limitations
with regard to any action brought by the Corporation as
receiver or qualified receiver shall be--
(i) in the case of any contract claim, the
longer of--
(I) the 6-year period beginning on
the date the claim accrues; or
(II) the period applicable under
State law; and
(ii) in the case of any tort claim, the
longer of--
(I) the 3-year period beginning on
the date the claim accrues; or
(II) the period applicable under
State law.
(B) Determination of the date on which a claim
accrues.--For purposes of subparagraph (A), the date on
which the statute of limitations begins to run on any
claim described in such subparagraph shall be the later
of--
(i) the date of the appointment of the
Corporation as receiver or qualified receiver
under this title; or
(ii) the date on which the cause of action
accrues.
(C) Revival of expired state causes of action.--
(i) In general.--In the case of any tort
claim described in clause (ii) for which the
statute of limitation applicable under State
law with respect to such claim has expired not
more than 5 years before the appointment of the
Corporation as receiver or qualified receiver,
the Corporation may bring an action as receiver
or qualified receiver on such claim without
regard to the expiration of the statute of
limitation applicable under State law.
(ii) Claims described.--A tort claim
referred to in clause (i) is a claim arising
from fraud, intentional misconduct resulting in
unjust enrichment, or intentional misconduct
resulting in substantial loss to the covered
financial company.
(12) Fraudulent transfers.--
(A) In general.--The Corporation, as receiver or
qualified receiver for any covered financial company,
may avoid a transfer of any interest of an institution
affiliated party, or any person who the Corporation
determines is a debtor of the covered financial
company, in property, or any obligation incurred by
such party or person, that was made within 5 years of
the date on which the Corporation was appointed
receiver or qualified receiver if such party or person
voluntarily or involuntarily made such transfer or
incurred such liability with the intent to hinder,
delay, or defraud the covered financial company or the
Corporation.
(B) Right of recovery.--To the extent a transfer is
avoided under subparagraph (A), the Corporation may
recover, for the benefit of the covered financial
company, the property transferred or, if a court so
orders, the value of such property (at the time of such
transfer) from--
(i) the initial transferee of such transfer
or the institution-affiliated party or person
for whose benefit such transfer was made; or
(ii) any immediate or mediate transferee of
any such initial transferee.
(C) Rights of transferee or obligee.--The
Corporation may not recover under subparagraph (B)--
(i) any transfer that takes for value,
including satisfaction or securing of a present
or antecedent debt, in good faith, or
(ii) any immediate or mediate good faith
transferee of such transferee.
(D) Rights under this subsection.--The rights of
the Corporation as receiver or qualified receiver of a
covered financial company under this subsection shall
be superior to any rights of a trustee or any other
party (other than any party which is a Federal agency)
under title 11, United States Code.
(E) Definition.--For purposes of this subsection,
the term ``institution affiliated party'' means--
(i) any director, officer, employee, or
controlling stockholder of, or agent for, a
covered financial company;
(ii) any shareholder, consultant, joint
venture partner, and any other person as
determined by the Corporation (by regulation or
otherwise) who participates in the conduct of
the affairs of a covered financial company; and
(iii) any independent contractor (including
any attorney, appraiser, or accountant) who
knowingly or recklessly participates in--
(I) any violation of any law or
regulation;
(II) any breach of fiduciary duty;
or
(III) any unsafe or unsound
practice,
which caused or is likely to cause more than a
minimal financial loss to, or a significant
adverse effect on, the covered financial
company.
(13) Attachment of assets and other injunctive relief.--
Subject to paragraph (14), any court of competent jurisdiction
may, at the request of the Corporation, issue an order in
accordance with rule 65 of the Federal Rules of Civil
Procedure, including an order placing the assets of any person
designated by the Corporation under the control of the court
and appointing a trustee to hold such assets.
(14) Standards.--
(A) Showing.--Rule 65 of the Federal Rules of Civil
Procedure shall apply with respect to any proceeding
under paragraph (13) without regard to the requirement
of such rule that the applicant show that the injury,
loss, or damage is irreparable and immediate.
(B) State proceeding.--If, in the case of any
proceeding in a State court, the court determines that
rules of civil procedure available under the laws of
such State provide substantially similar protections to
such party's right to due process as rule 65 (as
modified with respect to such proceeding by
subparagraph (A)), the relief sought by the Corporation
pursuant to paragraph (14) may be requested under the
laws of such State.
(15) Treatment of claims arising from breach of contracts
executed by the corporation as receiver or qualified
receiver.--Notwithstanding any other provision of this
subsection, any final and unappealable judgment for monetary
damages entered against the Corporation as receiver or
qualified receiver for a covered financial company for the
breach of an agreement executed or approved by the Corporation
after the date of its appointment shall be paid as an
administrative expense of the receiver or the qualified
receiver. Nothing in this paragraph shall be construed to limit
the power of a receiver or qualified receiver to exercise any
rights under contract or law, including to terminate, breach,
cancel, or otherwise discontinue such agreement.
(16) Accounting and recordkeeping requirements.--
(A) In general.--The Corporation as receiver or
qualified receiver shall, consistent with the
accounting and reporting practices and procedures
established by the Corporation, maintain a full
accounting of each qualified receivership,
receivership, or other disposition of any covered
financial company.
(B) Annual accounting or report.--With respect to
each receivership or qualified receivership to which
the Corporation was appointed, the Corporation shall
make an annual accounting or report, as appropriate,
available to the Secretary and the Comptroller General
of the United States.
(C) Availability of reports.--Any report prepared
pursuant to subparagraph (B) shall be made available by
the Corporation upon request to any member of the
public.
(D) Recordkeeping requirement.--
(i) In general.--Except as provided in
clause (ii), after the end of the 6-year period
beginning on the date the Corporation is
appointed as receiver of a covered financial
company the Corporation may destroy any records
of such covered financial company which the
Corporation, in the Corporation's discretion,
determines to be unnecessary unless directed
not to do so by a court of competent
jurisdiction or governmental agency, or
prohibited by law.
(ii) Old records.--Notwithstanding clause
(i), the Corporation may destroy records of a
covered financial company which are at least 10
years old as of the date on which the
Corporation is appointed as the receiver of
such company in accordance with clause (i) at
any time after such appointment is final,
without regard to the 6-year period of
limitation contained in clause (i).
(b) Priority of Expenses and Unsecured Claims.--
(1) In general.--Unsecured claims against a covered
financial company, or the receiver for such covered financial
company under this section, that are proven to the satisfaction
of the receiver shall have priority in the following order:
(A) Administrative expenses of the receiver.
(B) Any amounts owed to the United States, unless
the United States agrees or consents otherwise.
(C) Any other general or senior liability of the
covered financial company (which is not a liability
described under subparagraph (D) or (E)).
(D) Any obligation subordinated to general
creditors (which is not an obligation described under
subparagraph (E)).
(E) Any obligation to shareholders, members,
general partners, limited partners or other persons
with interests in the equity of the covered financial
company arising as a result of their status as
shareholders, members, general partners, limited
partners or other persons with interests in the equity
of the covered financial company.
(2) Post-receivership financing priority.--In the event
that the Corporation as receiver is unable to obtain unsecured
credit for the covered financial company from commercial
sources, the Corporation as receiver may obtain credit or incur
debt on the part of the covered financial company which shall
have priority over any or all administrative expenses of the
receiver under paragraph (1)(A).
(3) Claims of the united states.--Unsecured claims of the
United States shall, at a minimum, have a higher priority than
liabilities of the covered financial company that count as
regulatory capital.
(4) Creditors similarly situated.--All claimants of a
covered financial company that are similarly situated under
paragraph (1) shall be treated in a similar manner, except that
the receiver may take any action (including making payments)
that does not comply with this subsection, if--
(A) the Corporation determines that such action is
necessary to maximize the value of the assets of the
covered financial company, to maximize the present
value return from the sale or other disposition of the
assets of the covered financial company, to minimize
the amount of any loss realized upon the sale or other
disposition of the assets of the covered financial
company, or to contain or address serious adverse
effects on financial stability or the U.S. economy; and
(B) all claimants that are similarly situated under
paragraph (1) receive not less than the amount provided
in subsection (d)(2).
(5) Secured claims unaffected.--This subsection shall not
affect secured claims, except to the extent that the security
is insufficient to satisfy the claim and then only with regard
to the difference between the claim and the amount realized
from the security.
(6) Definitions.--As used in this subsection, the term
``administrative expenses of the receiver'' includes--
(A) the actual, necessary costs and expenses
incurred by the receiver in preserving the assets of a
covered financial company or liquidating or otherwise
resolving the affairs of a covered financial company
for which the Corporation has been appointed as
receiver; and
(B) any obligations that the receiver determines
are necessary and appropriate to facilitate the smooth
and orderly liquidation or other resolution of the
covered financial company.
(c) Provisions Relating to Contracts Entered Into Before
Appointment of Receiver or Qualified Receiver.--
(1) Authority to repudiate contracts.--In addition to any
other rights a receiver or qualified receiver may have, the
Corporation as receiver or qualified receiver for any covered
financial company may disaffirm or repudiate any contract or
lease--
(A) to which the covered financial company is a
party;
(B) the performance of which the receiver or
qualified receiver, in the receiver's or qualified
receiver's discretion, determines to be burdensome; and
(C) the disaffirmance or repudiation of which the
receiver or qualified receiver determines, in the
receiver's or qualified receiver's discretion, will
promote the orderly administration of the covered
financial company's affairs.
(2) Timing of repudiation.--The receiver or qualified
receiver appointed for any covered financial company under
section 1604 shall determine whether or not to exercise the
rights of repudiation under this subsection within a reasonable
period following such appointment.
(3) Claims for damages for repudiation.--
(A) In general.--Except as otherwise provided in
subparagraph (C) and paragraphs (4), (5), and (6), the
liability of the receiver or qualified receiver for the
disaffirmance or repudiation of any contract pursuant
to paragraph (1) shall be--
(i) limited to actual direct compensatory
damages; and
(ii) determined as of--
(I) the date of the appointment of
the receiver or qualified receiver; or
(II) in the case of any contract or
agreement referred to in paragraph (8),
the date of the disaffirmance or
repudiation of such contract or
agreement.
(B) No liability for other damages.--For purposes
of subparagraph (A), the term ``actual direct
compensatory damages'' does not include--
(i) punitive or exemplary damages;
(ii) damages for lost profits or
opportunity; or
(iii) damages for pain and suffering.
(C) Measure of damages for repudiation of qualified
financial contracts.--In the case of any qualified
financial contract or agreement to which paragraph (8)
applies, compensatory damages shall be--
(i) deemed to include normal and reasonable
costs of cover or other reasonable measures of
damages utilized in the industries for such
contract and agreement claims; and
(ii) paid in accordance with this
subsection and subsection (d) except as
otherwise specifically provided in this
subsection.
(4) Leases under which the covered financial company is the
lessee.--
(A) In general.--If the receiver or qualified
receiver disaffirms or repudiates a lease under which
the covered financial company was the lessee, the
receiver or qualified receiver shall not be liable for
any damages (other than damages determined pursuant to
subparagraph (B)) for the disaffirmance or repudiation
of such lease.
(B) Payments of rent.--Notwithstanding subparagraph
(A), the lessor under a lease to which such
subparagraph applies shall--
(i) be entitled to the contractual rent
accruing before the later of the date--
(I) the notice of disaffirmance or
repudiation is mailed; or
(II) the disaffirmance or
repudiation becomes effective, unless
the lessor is in default or breach of
the terms of the lease;
(ii) have no claim for damages under any
acceleration clause or other penalty provision
in the lease; and
(iii) have a claim for any unpaid rent,
subject to all appropriate offsets and
defenses, due as of the date of the appointment
which shall be paid in accordance with this
subsection and subsection (d).
(5) Leases under which the covered financial company is the
lessor.--
(A) In general.--If the receiver or qualified
receiver repudiates an unexpired written lease of real
property of the covered financial company under which
the covered financial company is the lessor and the
lessee is not, as of the date of such repudiation, in
default, the lessee under such lease may either--
(i) treat the lease as terminated by such
repudiation; or
(ii) remain in possession of the leasehold
interest for the balance of the term of the
lease unless the lessee defaults under the
terms of the lease after the date of such
repudiation.
(B) Provisions applicable to lessee remaining in
possession.--If any lessee under a lease described in
subparagraph (A) remains in possession of a leasehold
interest pursuant to clause (ii) of such subparagraph--
(i) the lessee--
(I) shall continue to pay the
contractual rent pursuant to the terms
of the lease after the date of the
repudiation of such lease; and
(II) may offset against any rent
payment which accrues after the date of
the repudiation of the lease, any
damages which accrue after such date
due to the nonperformance of any
obligation of the covered financial
company under the lease after such
date; and
(ii) the receiver or qualified receiver
shall not be liable to the lessee for any
damages arising after such date as a result of
the repudiation other than the amount of any
offset allowed under clause (i)(II).
(6) Contracts for the sale of real property.--
(A) In general.--If the receiver or qualified
receiver repudiates any contract (which meets the
requirements of subsection (a)(7)) for the sale of real
property and the purchaser of such real property under
such contract is in possession and is not, as of the
date of such repudiation, in default, such purchaser
may either--
(i) treat the contract as terminated by
such repudiation; or
(ii) remain in possession of such real
property.
(B) Provisions applicable to purchaser remaining in
possession.--If any purchaser of real property under
any contract described in subparagraph (A) remains in
possession of such property pursuant to clause (ii) of
such subparagraph--
(i) the purchaser--
(I) shall continue to make all
payments due under the contract after
the date of the repudiation of the
contract; and
(II) may offset against any such
payments any damages which accrue after
such date due to the nonperformance
(after such date) of any obligation of
the covered financial company under the
contract; and
(ii) the receiver or qualified receiver
shall--
(I) not be liable to the purchaser
for any damages arising after such date
as a result of the repudiation other
than the amount of any offset allowed
under clause (i)(II);
(II) deliver title to the purchaser
in accordance with the provisions of
the contract; and
(III) have no obligation under the
contract other than the performance
required under subclause (II).
(C) Assignment and sale allowed.--
(i) In general.--No provision of this
paragraph shall be construed as limiting the
right of the receiver or qualified receiver to
assign the contract described in subparagraph
(A) and sell the property subject to the
contract and the provisions of this paragraph.
(ii) No liability after assignment and
sale.--If an assignment and sale described in
clause (i) is consummated, the receiver or
qualified receiver shall have no further
liability under the contract described in
subparagraph (A) or with respect to the real
property which was the subject of such
contract.
(7) Provisions applicable to service contracts.--
(A) Services performed before appointment.--In the
case of any contract for services between any person
and any covered financial company for which the
Corporation has been appointed receiver or qualified
receiver, any claim of such person for services
performed before the appointment of the receiver or
qualified receiver shall be--
(i) a claim to be paid in accordance with
subsections (a), (b) and (d); and
(ii) deemed to have arisen as of the date
the receiver or qualified receiver was
appointed.
(B) Services performed after appointment and prior
to repudiation.--If, in the case of any contract for
services described in subparagraph (A), the receiver or
qualified receiver accepts performance by the other
person before the receiver or qualified receiver makes
any determination to exercise the right of repudiation
of such contract under this section--
(i) the other party shall be paid under the
terms of the contract for the services
performed; and
(ii) the amount of such payment shall be
treated as an administrative expense of the
receivership or qualified receivership.
(C) Acceptance of performance no bar to subsequent
repudiation.--The acceptance by any receiver or
qualified receiver of services referred to in
subparagraph (B) in connection with a contract
described in such subparagraph shall not affect the
right of the receiver or qualified receiver to
repudiate such contract under this section at any time
after such performance.
(8) Certain qualified financial contracts.--
(A) Rights of parties to contracts.--Subject to
paragraphs (9) and (10) of this subsection and
notwithstanding any other provision of this section
(other than subsection (a)(7)), any other Federal law,
or the law of any State, no person shall be stayed or
prohibited from exercising--
(i) any right such person has to cause the
termination, liquidation, or acceleration of
any qualified financial contract with a covered
financial company which arises upon the
appointment of the Corporation as receiver for
such covered financial company at any time
after such appointment;
(ii) any right under any security agreement
or arrangement or other credit enhancement
related to one or more qualified financial
contracts described in clause (i); and
(iii) any right to offset or net out any
termination value, payment amount, or other
transfer obligation arising under or in
connection with 1 or more contracts and
agreements described in clause (i), including
any master agreement for such contracts or
agreements.
(B) Applicability of other provisions.--Subsection
(a)(9) shall apply in the case of any judicial action
or proceeding brought against any receiver referred to
in subparagraph (A), or the covered financial company
for which such receiver was appointed, by any party to
a contract or agreement described in subparagraph
(A)(i) with such company.
(C) Certain transfers not avoidable.--
(i) In general.--Notwithstanding paragraph
(11), section 5242 of the Revised Statutes of
the United States or any other provision of
Federal or State law relating to the avoidance
of preferential or fraudulent transfers, the
Corporation, whether acting as such or as
receiver or qualified receiver of a covered
financial company, may not avoid any transfer
of money or other property in connection with
any qualified financial contract with a covered
financial company.
(ii) Exception for certain transfers.--
Clause (i) shall not apply to any transfer of
money or other property in connection with any
qualified financial contract with a covered
financial company if the Corporation determines
that the transferee had actual intent to
hinder, delay, or defraud such company, the
creditors of such company, or any receiver or
qualified receiver appointed for such company.
(D) Certain contacts and agreements defined.--For
purposes of this subsection, the following definitions
shall apply:
(i) Qualified financial contract.--The term
``qualified financial contract'' means any
securities contract, commodity contract,
forward contract, repurchase agreement, swap
agreement, and any similar agreement that the
Corporation determines by regulation,
resolution, or order to be a qualified
financial contract for purposes of this
paragraph.
(ii) Securities contract.--The term
``securities contract''--
(I) means a contract for the
purchase, sale, or loan of a security,
a certificate of deposit, a mortgage
loan, any interest in a mortgage loan,
a group or index of securities,
certificates of deposit, or mortgage
loans or interests therein (including
any interest therein or based on the
value thereof) or any option on any of
the foregoing, including any option to
purchase or sell any such security,
certificate of deposit, mortgage loan,
interest, group or index, or option,
and including any repurchase or reverse
repurchase transaction on any such
security, certificate of deposit,
mortgage loan, interest, group or
index, or option (whether or not such
repurchase or reverse repurchase
transaction is a ``repurchase
agreement,'' as defined in clause (v));
(II) does not include any purchase,
sale, or repurchase obligation under a
participation in a commercial mortgage
loan unless the Corporation determines
by regulation, resolution, or order to
include any such agreement within the
meaning of such term;
(III) means any option entered into
on a national securities exchange
relating to foreign currencies;
(IV) means the guarantee (including
by novation) by or to any securities
clearing agency of any settlement of
cash, securities, certificates of
deposit, mortgage loans or interests
therein, group or index of securities,
certificates of deposit or mortgage
loans or interests therein (including
any interest therein or based on the
value thereof) or option on any of the
foregoing, including any option to
purchase or sell any such security,
certificate of deposit, mortgage loan,
interest, group or index, or option
(whether or not such settlement is in
connection with any agreement or
transaction referred to in subclauses
(I) through (XII) (other than subclause
(II));
(V) means any margin loan;
(VI) means any extension of credit
for the clearance or settlement of
securities transactions;
(VII) means any loan transaction
coupled with a securities collar
transaction, any prepaid securities
forward transaction, or any total
return swap transaction coupled with a
securities sale transaction;
(VIII) means any other agreement or
transaction that is similar to any
agreement or transaction referred to in
this clause;
(IX) means any combination of the
agreements or transactions referred to
in this clause;
(X) means any option to enter into
any agreement or transaction referred
to in this clause;
(XI) means a master agreement that
provides for an agreement or
transaction referred to in subclause
(I), (III), (IV), (V), (VI), (VII),
(VIII), (IX), or (X), together with all
supplements to any such master
agreement, without regard to whether
the master agreement provides for an
agreement or transaction that is not a
securities contract under this clause,
except that the master agreement shall
be considered to be a securities
contract under this clause only with
respect to each agreement or
transaction under the master agreement
that is referred to in subclause (I),
(III), (IV), (V), (VI), (VII), (VIII),
(IX), or (X); and
(XII) means any security agreement
or arrangement or other credit
enhancement related to any agreement or
transaction referred to in this clause,
including any guarantee or
reimbursement obligation in connection
with any agreement or transaction
referred to in this clause.
(iii) Commodity contract.--The term
``commodity contract'' means--
(I) with respect to a futures
commission merchant, a contract for the
purchase or sale of a commodity for
future delivery on, or subject to the
rules of, a contract market or board of
trade;
(II) with respect to a foreign
futures commission merchant, a foreign
future;
(III) with respect to a leverage
transaction merchant, a leverage
transaction;
(IV) with respect to a clearing
organization, a contract for the
purchase or sale of a commodity for
future delivery on, or subject to the
rules of, a contract market or board of
trade that is cleared by such clearing
organization, or commodity option
traded on, or subject to the rules of,
a contract market or board of trade
that is cleared by such clearing
organization;
(V) with respect to a commodity
options dealer, a commodity option;
(VI) any other agreement or
transaction that is similar to any
agreement or transaction referred to in
this clause;
(VII) any combination of the
agreements or transactions referred to
in this clause;
(VIII) any option to enter into any
agreement or transaction referred to in
this clause;
(IX) a master agreement that
provides for an agreement or
transaction referred to in subclause
(I), (II), (III), (IV), (V), (VI),
(VII), or (VIII), together with all
supplements to any such master
agreement, without regard to whether
the master agreement provides for an
agreement or transaction that is not a
commodity contract under this clause,
except that the master agreement shall
be considered to be a commodity
contract under this clause only with
respect to each agreement or
transaction under the master agreement
that is referred to in subclause (I),
(II), (III), (IV), (V), (VI), (VII), or
(VIII); or
(X) any security agreement or
arrangement or other credit enhancement
related to any agreement or transaction
referred to in this clause, including
any guarantee or reimbursement
obligation in connection with any
agreement or transaction referred to in
this clause.
(iv) Forward contract.--The term ``forward
contract'' means--
(I) a contract (other than a
commodity contract) for the purchase,
sale, or transfer of a commodity or any
similar good, article, service, right,
or interest which is presently or in
the future becomes the subject of
dealing in the forward contract trade,
or product or byproduct thereof, with a
maturity date more than 2 days after
the date the contract is entered into,
including a repurchase or reverse
repurchase transaction (whether or not
such repurchase or reverse repurchase
transaction is a ``repurchase
agreement'', as defined in clause (v)),
consignment, lease, swap, hedge
transaction, deposit, loan, option,
allocated transaction, unallocated
transaction, or any other similar
agreement;
(II) any combination of agreements
or transactions referred to in
subclauses (I) and (III);
(III) any option to enter into any
agreement or transaction referred to in
subclause (I) or (II);
(IV) a master agreement that
provides for an agreement or
transaction referred to in subclauses
(I), (II), or (III), together with all
supplements to any such master
agreement, without regard to whether
the master agreement provides for an
agreement or transaction that is not a
forward contract under this clause,
except that the master agreement shall
be considered to be a forward contract
under this clause only with respect to
each agreement or transaction under the
master agreement that is referred to in
subclause (I), (II), or (III); or
(V) any security agreement or
arrangement or other credit enhancement
related to any agreement or transaction
referred to in subclause (I), (II),
(III), or (IV), including any guarantee
or reimbursement obligation in
connection with any agreement or
transaction referred to in any such
subclause.
(v) Repurchase agreement.--The term
``repurchase agreement'' (which definition also
applies to a reverse repurchase agreement)--
(I) means an agreement, including
related terms, which provides for the
transfer of one or more certificates of
deposit, mortgage-related securities
(as such term is defined in the
Securities Exchange Act of 1934),
mortgage loans, interests in mortgage-
related securities or mortgage loans,
eligible bankers' acceptances,
qualified foreign government securities
(which for purposes of this clause
shall mean a security that is a direct
obligation of, or that is fully
guaranteed by, the central government
of a member of the Organization for
Economic Cooperation and Development as
determined by regulation or order
adopted by the Federal Reserve Board)
or securities that are direct
obligations of, or that are fully
guaranteed by, the United States or any
agency of the United States against the
transfer of funds by the transferee of
such certificates of deposit, eligible
bankers' acceptances, securities,
mortgage loans, or interests with a
simultaneous agreement by such
transferee to transfer to the
transferor thereof certificates of
deposit, eligible bankers' acceptances,
securities, mortgage loans, or
interests as described above, at a date
certain not later than 1 year after
such transfers or on demand, against
the transfer of funds, or any other
similar agreement;
(II) does not include any
repurchase obligation under a
participation in a commercial mortgage
loan unless the Corporation determines
by regulation, resolution, or order to
include any such participation within
the meaning of such term;
(III) means any combination of
agreements or transactions referred to
in subclauses (I) and (IV);
(IV) means any option to enter into
any agreement or transaction referred
to in subclause (I) or (III);
(V) means a master agreement that
provides for an agreement or
transaction referred to in subclause
(I), (III), or (IV), together with all
supplements to any such master
agreement, without regard to whether
the master agreement provides for an
agreement or transaction that is not a
repurchase agreement under this clause,
except that the master agreement shall
be considered to be a repurchase
agreement under this subclause only
with respect to each agreement or
transaction under the master agreement
that is referred to in subclause (I),
(III), or (IV); and
(VI) means any security agreement
or arrangement or other credit
enhancement related to any agreement or
transaction referred to in subclause
(I), (III), (IV), or (V), including any
guarantee or reimbursement obligation
in connection with any agreement or
transaction referred to in any such
subclause.
(vi) Swap agreement.--The term ``swap
agreement'' means--
(I) any agreement, including the
terms and conditions incorporated by
reference in any such agreement, which
is an interest rate swap, option,
future, or forward agreement, including
a rate floor, rate cap, rate collar,
cross-currency rate swap, and basis
swap; a spot, same day-tomorrow,
tomorrow-next, forward, or other
foreign exchange, precious metals, or
other commodity agreement; a currency
swap, option, future, or forward
agreement; an equity index or equity
swap, option, future, or forward
agreement; a debt index or debt swap,
option, future, or forward agreement; a
total return, credit spread or credit
swap, option, future, or forward
agreement; a commodity index or
commodity swap, option, future, or
forward agreement; weather swap,
option, future, or forward agreement;
an emissions swap, option, future, or
forward agreement; or an inflation
swap, option, future, or forward
agreement;
(II) any agreement or transaction
that is similar to any other agreement
or transaction referred to in this
clause and that is of a type that has
been, is presently, or in the future
becomes, the subject of recurrent
dealings in the swap or other
derivatives markets (including terms
and conditions incorporated by
reference in such agreement) and that
is a forward, swap, future, option or
spot transaction on one or more rates,
currencies, commodities, equity
securities or other equity instruments,
debt securities or other debt
instruments, quantitative measures
associated with an occurrence, extent
of an occurrence, or contingency
associated with a financial,
commercial, or economic consequence, or
economic or financial indices or
measures of economic or financial risk
or value;
(III) any combination of agreements
or transactions referred to in this
clause;
(IV) any option to enter into any
agreement or transaction referred to in
this clause;
(V) a master agreement that
provides for an agreement or
transaction referred to in subclause
(I), (II), (III), or (IV), together
with all supplements to any such master
agreement, without regard to whether
the master agreement contains an
agreement or transaction that is not a
swap agreement under this clause,
except that the master agreement shall
be considered to be a swap agreement
under this clause only with respect to
each agreement or transaction under the
master agreement that is referred to in
subclause (I), (II), (III), or (IV);
and
(VI) any security agreement or
arrangement or other credit enhancement
related to any agreements or
transactions referred to in subclause
(I), (II), (III), (IV), or (V),
including any guarantee or
reimbursement obligation in connection
with any agreement or transaction
referred to in any such subclause.
(vii) Definitions relating to default.--
When used in this paragraph and paragraph
(10)--
(I) The term ``default'' shall
mean, with respect to a covered
financial company, any adjudication or
other official determination by any
court of competent jurisdiction, or
other public authority pursuant to
which a conservator, receiver, or other
legal custodian is appointed; and
(II) The term ``in danger of
default'' shall mean a covered
financial company with respect to which
the Corporation or appropriate State
authority has determined that--
(aa) in the opinion of the
Corporation or such authority--
(AA) the covered
financial company is
not likely to be able
to pay its obligations
in the normal course of
business; and
(BB) there is no
reasonable prospect
that the covered
financial company will
be able to pay such
obligations without
Federal assistance; or
(CC) in the opinion
of the Corporation or
such authority--
(bb) the covered financial
company has incurred or is
likely to incur losses that
will deplete all or
substantially all of its
capital; and
(cc) there is no reasonable
prospect that the capital will
be replenished without Federal
assistance.
(viii) Treatment of master agreement as one
agreement.--Any master agreement for any
contract or agreement described in any
preceding clause of this subparagraph (or any
master agreement for such master agreement or
agreements), together with all supplements to
such master agreement, shall be treated as a
single agreement and a single qualified
financial contact. If a master agreement
contains provisions relating to agreements or
transactions that are not themselves qualified
financial contracts, the master agreement shall
be deemed to be a qualified financial contract
only with respect to those transactions that
are themselves qualified financial contracts.
(ix) Transfer.--The term ``transfer'' means
every mode, direct or indirect, absolute or
conditional, voluntary or involuntary, of
disposing of or parting with property or with
an interest in property, including retention of
title as a security interest and foreclosure of
the covered financial company's equity of
redemption.
(x) Person.--The term ``person'' includes
any governmental entity in addition to any
entity included in the definition of such term
in section 1, title 1, United States Code.
(E) Certain protections in event of appointment of
qualified receiver.--Notwithstanding any other
provision of this section (other than paragraph (10) of
this subsection and subsection (a)(7) of this section),
any other Federal law, or the law of any State, no
person shall be stayed or prohibited from exercising--
(i) any right such person has to cause the
termination, liquidation, or acceleration of
any qualified financial contract with a covered
financial company in a qualified receivership
based upon a default under such financial
contract which is enforceable under applicable
noninsolvency law;
(ii) any right under any security agreement
or arrangement or other credit enhancement
related to one or more qualified financial
contracts described in clause (i); or
(iii) any right to offset or net out any
termination values, payment amounts, or other
transfer obligations arising under or in
connection with such qualified financial
contracts.
(F) Clarification.--No provision of law shall be
construed as limiting the right or power of the
Corporation, or authorizing any court or agency to
limit or delay, in any manner, the right or power of
the Corporation to transfer any qualified financial
contract in accordance with paragraphs (9) and (10) of
this subsection or to disaffirm or repudiate any such
contract in accordance with subsection (c)(1) of this
section.
(G) Walkaway clauses not effective.--
(i) In general.--Notwithstanding the
provisions of subparagraphs (A) and (E) and
sections 403 and 404 of the Federal Deposit
Insurance Corporation Improvement Act of 1991,
no walkaway clause shall be enforceable in a
qualified financial contract of a covered
financial company in default.
(ii) Limited suspension of certain
obligations.--In the case of a qualified
financial contract referred to in clause (i),
any payment or delivery obligations otherwise
due from a party pursuant to the qualified
financial contract shall be suspended from the
time the receiver is appointed until the
earlier of--
(I) the time such party receives
notice that such contract has been
transferred pursuant to paragraph
(10)(A); or
(II) 5:00 p.m. (eastern time) on
the business day following the date of
the appointment of the receiver.
(iii) Walkaway clause defined.--For
purposes of this subparagraph, the term
``walkaway clause'' means any provision in a
qualified financial contract that suspends,
conditions, or extinguishes a payment
obligation of a party, in whole or in part, or
does not create a payment obligation of a party
that would otherwise exist, solely because of
such party's status as a nondefaulting party in
connection with the insolvency of a covered
financial company that is a party to the
contract or the appointment of or the exercise
of rights or powers by a receiver or qualified
receiver of such covered financial company, and
not as a result of a party's exercise of any
right to offset, setoff, or net obligations
that exist under the contract, any other
contract between those parties, or applicable
law.
(H) Recordkeeping.--The Corporation, in
consultation with the Federal Reserve Board, may
prescribe regulations requiring that the covered
financial company maintain such records with respect to
qualified financial contracts (including market
valuations) as the Corporation determines to be
necessary or appropriate in order to assist the
receiver or qualified receiver of the covered financial
company in being able to exercise its rights and
fulfill its obligations under this paragraph or
paragraph (9) or (10).
(9) Transfer of qualified financial contracts.--
(A) In general.--In making any transfer of assets
or liabilities of a covered financial company in
default which includes any qualified financial
contract, the receiver or qualified receiver for such
covered financial company shall either--
(i) transfer to one financial institution,
other than a financial institution for which a
conservator, receiver, trustee in bankruptcy,
or other legal custodian has been appointed or
which is otherwise the subject of a bankruptcy
or insolvency proceeding--
(I) all qualified financial
contracts between any person or any
affiliate of such person and the
covered financial company in default;
(II) all claims of such person or
any affiliate of such person against
such covered financial company under
any such contract (other than any claim
which, under the terms of any such
contract, is subordinated to the claims
of general unsecured creditors of such
company);
(III) all claims of such covered
financial company against such person
or any affiliate of such person under
any such contract; and
(IV) all property securing or any
other credit enhancement for any
contract described in subclause (I) or
any claim described in subclause (II)
or (III) under any such contract; or
(ii) transfer none of the qualified
financial contracts, claims, property or other
credit enhancement referred to in clause (i)
(with respect to such person and any affiliate
of such person).
(B) Transfer to foreign bank, financial
institution, or branch or agency thereof.--In
transferring any qualified financial contracts and
related claims and property under subparagraph (A)(i),
the receiver or qualified receiver for the covered
financial company shall not make such transfer to a
foreign bank, financial institution organized under the
laws of a foreign country, or a branch or agency of a
foreign bank or financial institution unless, under the
law applicable to such bank, financial institution,
branch or agency, to the qualified financial contracts,
and to any netting contract, any security agreement or
arrangement or other credit enhancement related to one
or more qualified financial contracts, the contractual
rights of the parties to such qualified financial
contracts, netting contracts, security agreements or
arrangements, or other credit enhancements are
enforceable substantially to the same extent as
permitted under this section.
(C) Transfer of contracts subject to the rules of a
clearing organization.--In the event that a receiver or
qualified receiver transfers any qualified financial
contract and related claims, property, and credit
enhancements pursuant to subparagraph (A)(i) and such
contract is cleared by or subject to the rules of a
clearing organization, the clearing organization shall
not be required to accept the transferee as a member by
virtue of the transfer.
(D) Definitions.--For purposes of this paragraph,
the term ``financial institution'' means a broker or
dealer, a depository institution, a futures commission
merchant, a bridge financial company, or any other
institution determined by the Corporation by regulation
to be a financial institution, and the term ``clearing
organization'' has the same meaning as in section 402
of the Federal Deposit Insurance Corporation
Improvement Act of 1991.
(10) Notification of transfer.--
(A) In general.--If--
(i) the receiver or qualified receiver for
a covered financial company in default or in
danger of default transfers any assets and
liabilities of the covered financial company;
and
(ii) the transfer includes any qualified
financial contract,
the receiver or qualified receiver shall notify any
person who is a party to any such contract of such
transfer by 5:00 p.m. (eastern time) on the business
day following the date of the appointment of the
receiver in the case of a receivership, or the business
day following such transfer in the case of a qualified
receivership.
(B) Certain rights not enforceable.--
(i) Receivership.--A person who is a party
to a qualified financial contract with a
covered financial company may not exercise any
right that such person has to terminate,
liquidate, or net such contract under paragraph
(8)(A) of this subsection solely by reason of
or incidental to the appointment under this
section of a receiver for the covered financial
company (or the insolvency or financial
condition of the covered financial company for
which the receiver has been appointed)--
(I) until 5:00 p.m. (eastern time)
on the business day following the date
of the appointment of the receiver; or
(II) after the person has received
notice that the contract has been
transferred pursuant to paragraph
(9)(A).
(ii) Qualified receivership.--A person who
is a party to a qualified financial contract
with a covered financial company may not
exercise any right such person has to
terminate, liquidate, or net such contract
under paragraph (8)(E) of this subsection or
section 403 of Federal Deposit Insurance
Corporation Improvement Act of 1991 solely by
reason of or incidental to the appointment
under this section of a qualified receiver for
the covered financial company (or the
insolvency or financial condition of the
covered financial company for which the
qualified receiver has been appointed).
(iii) Notice.--For purposes of this
paragraph, the receiver or qualified receiver
for a covered financial company shall be deemed
to have notified a person who is a party to a
qualified financial contract with such covered
financial company if the receiver or qualified
receiver has taken steps reasonably calculated
to provide notice to such person by the time
specified in subparagraph (A).
(C) Treatment of bridge financial company.--For
purposes of paragraph (9), a bridge financial company
shall not be considered to be a financial institution
for which a conservator, receiver, trustee in
bankruptcy, or other legal custodian has been appointed
or which is otherwise the subject of a bankruptcy or
insolvency proceeding.
(D) Business day defined.--For purposes of this
paragraph, the term ``business day'' means any day
other than any Saturday, Sunday, or any day on which
either the New York Stock Exchange or the Federal
Reserve Bank of New York is closed.
(11) Disaffirmance or repudiation of qualified financial
contracts.--In exercising the rights of disaffirmance or
repudiation of a receiver or qualified receiver with respect to
any qualified financial contract to which a covered financial
company is a party, the receiver or qualified receiver for such
covered financial shall either--
(A) disaffirm or repudiate all qualified financial
contracts between--
(i) any person or any affiliate of such
person; and
(ii) the covered financial company in
default; or
(B) disaffirm or repudiate none of the qualified
financial contracts referred to in subparagraph (A)
(with respect to such person or any affiliate of such
person).
(12) Certain security and customer interests not
avoidable.--No provision of this subsection shall be construed
as permitting the avoidance of any--
(A) legally enforceable or perfected security
interest in any of the assets of any covered financial
company except where such an interest is taken in
contemplation of the company's insolvency or with the
intent to hinder, delay, or defraud the company or the
creditors of such company; or
(B) legally enforceable interest in customer
property.
(13) Authority to enforce contracts.--
(A) In general.--The receiver or qualified receiver
may enforce any contract, other than a director's or
officer's liability insurance contract or a financial
institution bond, entered into by the covered financial
company notwithstanding any provision of the contract
providing for termination, default, acceleration, or
exercise of rights upon, or solely by reason of,
insolvency or the appointment of or the exercise of
rights or powers by a receiver or qualified receiver.
(B) Certain rights not affected.--No provision of
this paragraph may be construed as impairing or
affecting any right of the receiver or qualified
receiver to enforce or recover under a director's or
officer's liability insurance contract or financial
institution bond under other applicable law.
(C) Consent requirement.--
(i) In general.--Except as otherwise
provided by this section, no person may
exercise any right or power to terminate,
accelerate, or declare a default under any
contract to which the covered financial company
is a party, or to obtain possession of or
exercise control over any property of the
covered financial company or affect any
contractual rights of the covered financial
company, without the consent of the receiver or
qualified receiver, as appropriate, of the
covered financial company during the 45-day
period beginning on the date of the appointment
of the qualified receiver, or during the 90-day
period beginning on the date of the appointment
of the receiver, as applicable.
(ii) Certain exceptions.--No provision of
this subparagraph shall apply to a director or
officer liability insurance contract or a
financial institution bond, to the rights of
parties to certain qualified financial
contracts pursuant to paragraph (8), or to the
rights of parties to netting contracts pursuant
to subtitle A of title IV of the Federal
Deposit Insurance Corporation Improvement Act
of 1991 (12 U.S.C. 4401 et seq.), or shall be
construed as permitting the receiver or
qualified receiver to fail to comply with
otherwise enforceable provisions of such
contract.
(14) Exception for federal reserve banks and corporation
security interest.--No provision of this subsection shall apply
with respect to--
(A) any extension of credit from any Federal
Reserve bank or the Corporation to any covered
financial company; or
(B) any security interest in the assets of the
covered financial company securing any such extension
of credit.
(15) Savings clause.--The meanings of terms used in this
subsection are applicable for purposes of this subsection only,
and shall not be construed or applied so as to challenge or
affect the characterization, definition, or treatment of any
similar terms under any other statute, regulation, or rule,
including, but not limited, to the Gramm Leach Bliley Act, the
Legal Certainty for Bank Products Act of 2000, the securities
laws (as that term is defined in section 3(a)(47) of the
Securities Exchange Act of 1934), and the Commodity Exchange
Act.
(d) Valuation of Claims in Default.--
(1) In general.--Notwithstanding any other provision of
Federal law or the law of any State, and regardless of the
method which the Corporation determines to utilize with respect
to a covered financial company, including transactions
authorized under subsection (h), this subsection shall govern
the rights of the creditors of such covered financial company.
(2) Maximum liability.--The maximum liability of the
Corporation, acting as receiver or in any other capacity, to
any person having a claim against the receiver or the covered
financial company for which such receiver is appointed shall
equal the amount such claimant would have received if--
(A) a determination had not been made under section
1603(b) with respect to the covered financial company;
and
(B) the covered financial company had been
liquidated under title 11, United States Code, or any
case related to title 11, United States Code (including
but not limited to a case initiated by the Securities
Investor Protection Corporation with respect to a
financial company subject to the Securities Investor
Protection Act of 1970), or any State insolvency law.
(3) Additional payments authorized.--
(A) In general.--The Corporation may, as receiver
and with the approval of the Secretary, make additional
payments or credit additional amounts to or with
respect to or for the account of any claimant or
category of claimants of a covered financial company if
the Corporation determines that such payments or
credits are necessary or appropriate to--
(i) minimize losses to the receiver from
the resolution of the covered financial company
under this section; or
(ii) prevent or mitigate serious adverse
effects to financial stability or the United
States economy.
(B) Manner of payment.--The Corporation may make
payments or credit amounts under subparagraph (A)
directly to the claimants or may make such payments or
credit such amounts to a company other than a covered
financial company or a bridge financial company
established with respect thereto in order to induce
such other company to accept liability for such claims.
(e) Limitation on Court Action.--Except as provided in this section
or at the request of the receiver or qualified receiver appointed for a
covered financial company, no court may take any action to restrain or
affect the exercise of powers or functions of the receiver or qualified
receiver hereunder.
(f) Liability of Directors and Officers.--
(1) In general.--A director or officer of a covered
financial company may be held personally liable for monetary
damages in any civil action described in paragraph (2) by, on
behalf of, or at the request or direction of the Corporation,
which action is prosecuted wholly or partially for the benefit
of the Corporation--
(A) acting as receiver or qualified receiver of
such covered financial company;
(B) acting based upon a suit, claim, or cause of
action purchased from, assigned by, or otherwise
conveyed by such receiver or qualified receiver; or
(C) acting based upon a suit, claim, or cause of
action purchased from, assigned by, or otherwise
conveyed in whole or in part by a covered financial
company or its affiliate in connection with assistance
provided under section 1604.
(2) Actions covered.--Paragraph (1) shall apply with
respect to actions for gross negligence, including any similar
conduct or conduct that demonstrates a greater disregard of a
duty of care (than gross negligence) including intentional
tortious conduct, as such terms are defined and determined
under applicable State law.
(3) Savings clause.--Nothing in this subsection shall
impair or affect any right of the Corporation under other
applicable law.
(g) Damages.--In any proceeding related to any claim against a
covered financial company's director, officer, employee, agent,
attorney, accountant, appraiser, or any other party employed by or
providing services to a covered financial company, recoverable damages
determined to result from the improvident or otherwise improper use or
investment of any covered financial company's assets shall include
principal losses and appropriate interest.
(h) Bridge Financial Companies.--
(1) Organization.--
(A) Purpose.--The Corporation, as receiver of one
or more covered financial companies may organize one or
more bridge financial companies in accordance with this
subsection.
(B) Authorities.--Upon the creation of a bridge
financial company under subparagraph (A) with respect
to a covered financial company, such bridge financial
company may--
(i) assume such liabilities (including
liabilities associated with any trust or
custody business but excluding any liabilities
that count as regulatory capital) of such
covered financial company as the Corporation
may, in its discretion, determine to be
appropriate;
(ii) purchase such assets (including assets
associated with any trust or custody business)
of such covered financial company as the
Corporation may, in its discretion, determine
to be appropriate; and
(iii) perform any other temporary function
which the Corporation may, in its discretion,
prescribe in accordance with this section.
(2) Charter and establishment.--
(A) Establishment.--If the Corporation is appointed
as receiver for a covered financial company, the
Corporation may grant a Federal charter to and approve
articles of association for one or more bridge
financial company or companies with respect to such
covered financial company which shall, by operation of
law and immediately upon issuance of its charter and
approval of its articles of association, be established
and operate in accordance with, and subject to, such
charter, articles, and this section.
(B) Management.--Upon its establishment, a bridge
financial company shall be under the management of a
board of directors appointed by the Corporation.
(C) Articles of association.--The articles of
association and organization certificate of a bridge
financial shall have such terms as the Corporation may
provide, and shall be executed by such representatives
as the Corporation may designate.
(D) Terms of charter; rights and privileges.--
Subject to and in accordance with the provisions of
this subsection, the Corporation shall--
(i) establish the terms of the charter of a
bridge financial company and the rights,
powers, authorities and privileges of a bridge
financial company granted by the charter or as
an incident thereto; and
(ii) provide for, and establish the terms
and conditions governing, the management
(including, but not limited to, the bylaws and
the number of directors of the board of
directors) and operations of the bridge
financial company.
(E) Transfer of rights and privileges of covered
financial company.--
(i) In general.--Notwithstanding any other
provision of Federal law or the law of any
State, the Corporation may provide for a bridge
financial company to succeed to and assume any
rights, powers, authorities or privileges of
the covered financial company with respect to
which the bridge financial company was
established and, upon such determination by the
Corporation, the bridge financial company shall
immediately and by operation of law succeed to
and assume such rights, powers, authorities and
privileges.
(ii) Effective without approval.--Any
succession to or assumption by a bridge
financial company of rights, powers,
authorities or privileges of a covered
financial company under clause (i) or otherwise
shall be effective without any further approval
under Federal or State law, assignment, or
consent with respect thereto.
(F) Corporate governance and election and
designation of body of law.--To the extent permitted by
the Corporation and consistent with this section and
any rules, regulations or directives issued by the
Corporation under this section, a bridge financial
company may elect to follow the corporate governance
practices and procedures as are applicable to a
corporation incorporated under the general corporation
law of the State of Delaware, or the State of
incorporation or organization of the covered financial
company with respect to which the bridge financial
company was established, as such law may be amended
from time to time.
(G) Capital.--
(i) Capital not required.--Notwithstanding
any other provision of Federal or State law, a
bridge financial company may, if permitted by
the Corporation, operate without any capital or
surplus, or with such capital or surplus as the
Corporation may in its discretion determine to
be appropriate.
(ii) No contribution by the corporation
required.--The Corporation is not required to
pay capital into a bridge financial company or
to issue any capital stock on behalf of a
bridge financial company established under this
subsection.
(iii) Authority.--If the Corporation
determines that such action is advisable, the
Corporation may cause capital stock or other
securities of a bridge financial company
established with respect to a covered financial
company to be issued and offered for sale in
such amounts and on such terms and conditions
as the Corporation may, in its discretion,
determine.
(3) Interests in and assets and obligations of covered
financial company.--Notwithstanding paragraphs (1) or (2) or
any other provision of law--
(A) a bridge financial company shall assume,
acquire, or succeed to the assets or liabilities of a
covered financial company (including the assets or
liabilities associated with any trust or custody
business) only to the extent that such assets or
liabilities are transferred by the Corporation to the
bridge financial company in accordance with, and
subject to the restrictions set forth in, paragraph
(1)(B); and
(B) a bridge financial company shall not assume,
acquire, or succeed to any obligation that a covered
financial company for which a receiver has been
appointed may have to any shareholder, member, general
partner, limited partner, or other person with an
interest in the equity of the covered financial company
that arises as a result of the status of that person
having an equity claim in the covered financial
company.
(4) Bridge financial company treated as being in default
for certain purposes.--A bridge financial company shall be
treated as a covered financial company in default at such times
and for such purposes as the Corporation may, in its
discretion, determine.
(5) Transfer of assets and liabilities.--
(A) Transfer of assets and liabilities.--The
Corporation, as receiver, may transfer any assets and
liabilities of a covered financial company (including
any assets or liabilities associated with any trust or
custody business) to one or more bridge financial
companies in accordance with and subject to the
restrictions of paragraph (1)(B).
(B) Subsequent transfers.--At any time after the
establishment of a bridge financial company with
respect to a covered financial company, the
Corporation, as receiver, may transfer any assets and
liabilities of such covered financial company as the
Corporation may, in its discretion, determine to be
appropriate in accordance with and subject to the
restrictions of paragraph (1)(B).
(C) Treatment of trust or custody business.--For
purposes of this paragraph, the trust or custody
business, including fiduciary appointments, held by any
covered financial company is included among its assets
and liabilities.
(D) Effective without approval.--The transfer of
any assets or liabilities, including those associated
with any trust or custody business of a covered
financial company to a bridge financial company shall
be effective without any further approval under Federal
or State law, assignment, or consent with respect
thereto.
(E) Equitable treatment of similarly situated
creditors.--The Corporation shall treat all creditors
of a covered financial company that are similarly
situated under subsection (b)(1) in a similar manner in
exercising the authority of the Corporation under this
subsection to transfer any assets or liabilities of the
covered financial company to one or more bridge
financial companies established with respect to such
covered financial company, except that the Corporation
may take actions (including making payments) that do
not comply with this subparagraph, if--
(i) the Corporation determines that such
actions are necessary to maximize the value of
the assets of the covered financial company, to
maximize the present value return from the sale
or other disposition of the assets of the
covered financial company, to minimize the
amount of any loss realized upon the sale or
other disposition of the assets of the covered
financial company, or to contain or address
serious adverse effects to financial stability
or the U.S. economy; and
(ii) all creditors that are similarly
situated under subsection (b)(1) receive not
less than the amount provided in subsection
(d)(2).
(F) Limitation on transfer of liabilities.--
Notwithstanding any other provision of law, the
aggregate amount of liabilities of a covered financial
company that are transferred to, or assumed by, a
bridge financial company from a covered financial
company may not exceed the aggregate amount of the
assets of the covered financial company that are
transferred to, or purchased by, the bridge financial
company from the covered financial company.
(6) Stay of judicial action.--Any judicial action to which
a bridge financial company becomes a party by virtue of its
acquisition of any assets or assumption of any liabilities of a
covered financial company shall be stayed from further
proceedings for a period of up to 45 days (or such longer
period as may be agreed to upon the consent of all parties) at
the request of the bridge financial company.
(7) Agreements against interest of the bridge financial
company.--No agreement that tends to diminish or defeat the
interest of the bridge financial company in any asset of a
covered financial company acquired by the bridge financial
company shall be valid against the bridge financial company
unless such agreement is in writing and executed by an
authorized officer or representative of the covered financial
company.
(8) No federal status.--
(A) Agency status.--A bridge financial company is
not an agency, establishment, or instrumentality of the
United States.
(B) Employee status.--Representatives for purposes
of paragraph (1)(B), directors, officers, employees, or
agents of a bridge financial company are not, solely by
virtue of service in any such capacity, officers or
employees of the United States. Any employee of the
Corporation or of any Federal instrumentality who
serves at the request of the Corporation as a
representative for purposes of paragraph (1)(B),
director, officer, employee, or agent of a bridge
financial company shall not--
(i) solely by virtue of service in any such
capacity lose any existing status as an officer
or employee of the United States for purposes
of title 5, United States Code, or any other
provision of law; or
(ii) receive any salary or benefits for
service in any such capacity with respect to a
bridge financial company in addition to such
salary or benefits as are obtained through
employment with the Corporation or such Federal
instrumentality.
(9) Exempt tax status.--Notwithstanding any other provision
of Federal or State law, a bridge financial company, its
franchise, property, and income shall be exempt from all
taxation now or hereafter imposed by the United States, by any
territory, dependency, or possession thereof, or by any State,
county, municipality, or local taxing authority.
(10) Federal agency approval; antitrust review.--
(A) In general.--If a transaction involving the
merger or sale of a bridge financial company requires
approval by a Federal agency, the transaction may not
be consummated before the 5th calendar day after the
date of approval by the Federal agency responsible for
such approval with respect thereto. If, in connection
with any such approval a report on competitive factors
from the Attorney General is required, the Federal
agency responsible for such approval shall promptly
notify the Attorney General of the proposed transaction
and the Attorney General shall provide the required
report within 10 days of the request. If a filing is
required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 with the Department of Justice
or the Federal Trade Commission, the waiting period
shall expire not later than the 30th day following such
filing notwithstanding any other provision of Federal
law or any attempt by any Federal agency to extend such
waiting period, and no further request for information
by any Federal agency shall be permitted.
(B) Emergency.--If the Secretary, in consultation
with the Chairman of the Federal Reserve Board, has
found that the Corporation must act immediately to
prevent the probable failure of the covered financial
company involved, the approvals and filings referred to
in subparagraph (A) shall not be required and the
transaction may be consummated immediately by the
Corporation.
(11) Duration of bridge financial company.--Subject to
paragraphs (12), (13), and (14), the status of a bridge
financial company as such shall terminate at the end of the 2-
year period following the date it was granted a charter. The
Corporation may, in its discretion, extend the status of the
bridge financial company as such for 3 additional 1-year
periods.
(12) Termination of bridge financial company status.--The
status of any bridge financial company as such shall terminate
upon the earliest of--
(A) the merger or consolidation of the bridge
financial company with a company that is not a bridge
financial company;
(B) at the election of the Corporation, the sale of
a majority of the capital stock of the bridge financial
company to a company other than the Corporation and
other than another bridge financial company;
(C) the sale of 80 percent, or more, of the capital
stock of the bridge financial company to a person other
than the Corporation and other than another bridge
financial company;
(D) at the election of the Corporation, either the
assumption of all or substantially all of the
liabilities of the bridge financial company by a
company that is not a bridge financial company, or the
acquisition of all or substantially all of the assets
of the bridge financial company by a company that is
not a bridge financial company, or other entity as
permitted under applicable law; and
(E) the expiration of the period provided in
paragraph (11), or the earlier dissolution of the
bridge financial company as provided in paragraph (14).
(13) Effect of termination events.--
(A) Merger or consolidation.--A merger or
consolidation as provided in paragraph (12)(A) shall be
conducted in accordance with, and shall have the effect
provided in, the provisions of applicable law. For the
purpose of effecting such a merger or consolidation,
the bridge financial company shall be treated as a
corporation organized under the laws of the State of
Delaware (unless the law of another State has been
selected by the bridge financial company in accordance
with paragraph (2)(F)), and the Corporation shall be
treated as the sole shareholder thereof,
notwithstanding any other provision of State or Federal
law.
(B) Charter conversion.--Following the sale of a
majority of the capital stock of the bridge financial
company as provided in paragraph (12)(B), the
Corporation may amend the charter of the bridge
financial company to reflect the termination of the
status of the bridge financial company as such,
whereupon the company shall have all of the rights,
powers, and privileges under its constituent documents
and applicable State or Federal law. In connection
therewith, the Corporation may take such steps as may
be necessary or convenient to reincorporate the bridge
financial company under the laws of a State and,
notwithstanding any provisions of State or Federal law,
such State-chartered corporation shall be deemed to
succeed by operation of law to such rights, titles,
powers and interests of the bridge financial company as
the Corporation may provide, with the same effect as if
the bridge financial company had merged with the State-
chartered corporation under provisions of the corporate
laws of such State.
(C) Sale of stock.--Following the sale of 80
percent or more of the capital stock of a bridge
financial company as provided in paragraph (12)(C), the
company shall have all of the rights, powers, and
privileges under its constituent documents and
applicable State or Federal law. In connection
therewith, the Corporation may take such steps as may
be necessary or convenient to reincorporate the bridge
financial company under the laws of a State and,
notwithstanding any provisions of State or Federal law,
the State-chartered corporation shall be deemed to
succeed by operation of law to such rights, titles,
powers and interests of the bridge financial company as
the Corporation may provide, with the same effect as if
the bridge financial company had merged with the State-
chartered corporation under provisions of the corporate
laws of such State.
(D) Assumption of liabilities and sale of assets.--
Following the assumption of all or substantially all of
the liabilities of the bridge financial company, or the
sale of all or substantially all of the assets of the
bridge financial company, as provided in paragraph
(12)(D), at the election of the Corporation the bridge
financial company may retain its status as such for the
period provided in paragraph (11) or may be dissolved
at the election of the Corporation.
(E) Amendments to charter.--Following the
consummation of a transaction described in subparagraph
(A), (B), (C), or (D) of paragraph (12), the charter of
the resulting company shall be amended to reflect the
termination of bridge financial company status, if
appropriate.
(14) Dissolution of bridge financial company.--
(A) In general.--Notwithstanding any other
provision of State or Federal law, if a bridge
financial company's status as such has not previously
been terminated by the occurrence of an event specified
in subparagraph (A), (B), (C), or (D) of paragraph
(12)--
(i) the Corporation may, in its discretion,
dissolve the bridge financial company in
accordance with this paragraph at any time; and
(ii) the Corporation shall promptly
commence dissolution proceedings in accordance
with this paragraph upon the expiration of the
2-year period following the date the bridge
financial company was chartered, or any
extension thereof, as provided in paragraph
(11).
(B) Procedures.--The Corporation shall remain the
receiver of a bridge financial company for the purpose
of dissolving the bridge financial company. The
Corporation as such receiver shall wind up the affairs
of the bridge financial company in conformity with the
provisions of law relating to the liquidation of
covered financial companies. With respect to any such
bridge financial company, the Corporation as receiver
shall have all the rights, powers, and privileges and
shall perform the duties related to the exercise of
such rights, powers, or privileges granted by law to a
receiver of a covered financial company and,
notwithstanding any other provision of law, in the
exercise of such rights, powers, and privileges the
Corporation shall not be subject to the direction or
supervision of any State agency or other Federal
agency.
(15) Authority to obtain credit.--
(A) In general.--A bridge financial company may
obtain unsecured credit and issue unsecured debt.
(B) Inability to obtain credit.--If a bridge
financial company is unable to obtain unsecured credit
or issue unsecured debt, the Corporation may authorize
the obtaining of credit or the issuance of debt by the
bridge financial company--
(i) with priority over any or all of the
obligations of the bridge financial company;
(ii) secured by a lien on property of the
bridge financial company that is not otherwise
subject to a lien; or
(iii) secured by a junior lien on property
of the bridge financial company that is subject
to a lien.
(C) Limitations.--
(i) In general.--The Corporation, after
notice and a hearing, may authorize the
obtaining of credit or the issuance of debt by
a bridge financial company that is secured by a
senior or equal lien on property of the bridge
financial company that is subject to a lien
only if--
(I) the bridge financial company is
unable to otherwise obtain such credit
or issue such debt; and
(II) there is adequate protection
of the interest of the holder of the
lien on the property with respect to
which such senior or equal lien is
proposed to be granted.
(D) Burden of proof.--In any hearing under this
subsection, the Corporation has the burden of proof on
the issue of adequate protection.
(16) Effect on debts and liens.--The reversal or
modification on appeal of an authorization under this
subsection to obtain credit or issue debt, or of a grant under
this section of a priority or a lien, does not affect the
validity of any debt so issued, or any priority or lien so
granted, to an entity that extended such credit in good faith,
whether or not such entity knew of the pendency of the appeal,
unless such authorization and the issuance of such debt, or the
granting of such priority or lien, were stayed pending appeal.
(i) Sharing Records.--Whenever the Corporation has been appointed
as receiver or qualified receiver for a covered financial company, the
Federal Reserve Board and the company's primary Federal regulatory
agency, if any, shall each make all records relating to the company
available to the receiver or qualified receiver which may be used by
the receiver or qualified receiver in any manner the receiver or
qualified receiver determines to be appropriate.
(j) Expedited Procedures for Certain Claims.--
(1) Time for filing notice of appeal.--The notice of appeal
of any order, whether interlocutory or final, entered in any
case brought by the Corporation against a covered financial
company's director, officer, employee, agent, attorney,
accountant, or appraiser or any other person employed by or
providing services to a covered financial company shall be
filed not later than 30 days after the date of entry of the
order. The hearing of the appeal shall be held not later than
120 days after the date of the notice of appeal. The appeal
shall be decided not later than 180 days after the date of the
notice of appeal.
(2) Scheduling.--A court of the United States shall
expedite the consideration of any case brought by the
Corporation against a covered financial company's director,
officer, employee, agent, attorney, accountant, or appraiser or
any other person employed by or providing services to a covered
financial company. As far as practicable, the court shall give
such case priority on its docket.
(3) Judicial discretion.--The court may modify the schedule
and limitations stated in paragraphs (1) and (2) in a
particular case, based on a specific finding that the ends of
justice that would be served by making such a modification
would outweigh the best interest of the public in having the
case resolved expeditiously.
(k) Foreign Investigations.--The Corporation, as receiver or
qualified receiver of any covered financial company and for purposes of
carrying out any power, authority, or duty with respect to a covered
financial company--
(1) may request the assistance of any foreign financial
authority and provide assistance to any foreign financial
authority in accordance with section 8(v) of the Federal
Deposit Insurance Act as if the covered financial company were
an insured depository institution, the Corporation were the
appropriate Federal banking agency for the company and any
foreign financial authority were the foreign banking authority;
and
(2) may maintain an office to coordinate foreign
investigations or investigations on behalf of foreign financial
authorities.
(l) Prohibition on Entering Secrecy Agreements and Protective
Orders.--The Corporation may not enter into any agreement or approve
any protective order which prohibits the Corporation from disclosing
the terms of any settlement of an administrative or other action for
damages or restitution brought by the Corporation in its capacity as
receiver or qualified receiver for a covered financial company.
(m) Liquidation of Certain Covered Financial Companies or Bridge
Financial Companies.--Notwithstanding any other provision of law (other
than a conflicting provision of this section), the Corporation, in
connection with the liquidation of any covered financial company or
bridge financial company with respect to which the Corporation has been
appointed as receiver, shall--
(1) in the case of any covered financial company or bridge
financial company that is or has a subsidiary that is a
stockbroker (as that term is defined in section 101 of title 11
of the United States Code) but is not a member of the
Securities Investor Protection Corporation, apply the
provisions of subchapter III of chapter 7 of title 11 of the
United States Code in respect of the distribution to any
``customer'' of all ``customer name securities'' and ``customer
property'' (as such terms are defined in section 741 of such
title 11) as if such covered financial company or bridge
financial company were a debtor for purposes of such
subchapter; or
(2) in the case of any covered financial company or bridge
financial company that is a commodity broker (as that term is
defined in section 101 of title 11 of the United States Code),
apply the provisions of subchapter IV of chapter 7 of title 11
of the United States Code in respect of the distribution to any
``customer'' of all ``customer property'' (as such terms are
defined in section 761 of such title 11) as if such covered
financial company or bridge financial company were a debtor for
purposes of such subchapter.
(n) Systemic Resolution Fund.--
(1) Establishment.--There is established in the Treasury a
separate fund called the Systemic Resolution Fund, which shall
be available without further appropriation for the cost of
actions authorized by this title upon a determination made
under section 1603(b) to the Corporation to carry out the
authorities contained in this title, including the payment of
administrative expenses, the Corporation's payment of principal
and interest on obligations issued under paragraph (3), and the
exercise of authorities under section 1604.
(2) Proceeds.--Amounts received by the Corporation
(including amounts borrowed under paragraph (3) and assessments
received under subsection (o), but excluding amounts received
by any covered financial company when the Corporation is acting
in its capacity as receiver or qualified receiver for such
company, and excluding amounts credited to the appropriate
financing account as a means of financing credit activity, as
applicable) shall be deposited into the Fund, subject to
apportionment.
(3) Capitalization of fund.--
(A) Corporation authorized to issue obligations.--
In order to capitalize the Fund upon the Secretary
making the determination provided for in section
1603(b), the Corporation is authorized to issue
obligations to the Secretary.
(B) Secretary authorized to purchase obligations.--
The Secretary may, in the Secretary's discretion and
under such terms and conditions that the Secretary may
require, purchase or agree to purchase any obligations
issued under subparagraph (A), and for such purpose the
Secretary is authorized to use as a public debt
transaction the proceeds of the sale of any securities
hereafter issued under chapter 31 of title 31, United
States Code, and the purposes for which securities may
be issued under chapter 31 of title 31, United States
Code, are extended to include such purchases.
(C) Interest rate.--Each purchase of obligations by
the Secretary under this paragraph shall be upon such
terms and conditions as to yield a return at a rate not
less than a rate determined by the Secretary, taking
into consideration the current average yield on
outstanding marketable obligations of the United States
of comparable maturity.
(D) Secretary authorized to sell obligations.--The
Secretary may sell, upon such terms and conditions and
at such price or prices as the Secretary shall
determine, any of the obligations acquired under this
paragraph.
(E) Public debt transactions.--All purchases and
sales by the Secretary of such obligations under this
paragraph shall be treated as public debt transactions
of the United States, and the proceeds from the sale of
any obligations acquired by the Secretary under this
paragraph shall be covered into the Treasury as
miscellaneous receipts.
(o) Recovery of Expended Funds From Financial Companies.--
(1) Risk-based assessments.--The Corporation shall recover
the amount of funds expended out of the Fund under subsection
(n) and which have not otherwise been recouped. Steps to
recover such amounts shall include one or more risk-based
assessments on financial companies in such amount and manner,
and subject to such terms and conditions that the Corporation
determines, with the concurrence of the Secretary and the
Federal Reserve Board, are necessary to pay in full the
obligations issued by Corporation to the Secretary, within 60
months from the date of the Secretary's determination under
section 1603(b). The Corporation may, with the approval of the
Secretary and the Federal Reserve Board, extend this time
period if the Corporation determines that an extension is
necessary to avoid having a serious adverse effect on the
financial system or economic conditions in the United States.
(2) Assessment threshold and graduated assessment rate.--
The Corporation shall not assess any financial company whose
total assets on a consolidated basis are less than $10 billion.
The Corporation shall assess any financial company with $10
billion or more in total consolidated assets on a graduated
basis that assesses financial companies with greater assets at
a higher rate.
(3) Risk-based assessment considerations.--In imposing
assessments under paragraphs (1) and (2), the Corporation
shall--
(A) take into account economic conditions generally
affecting financial companies so as to allow
assessments to be lower during less favorable economic
conditions;
(B) take into account any assessments imposed on a
subsidiary of a financial company that is--
(i) an insured depository institution
pursuant to section 7 or section 13(c)(4)(G) of
the Federal Deposit Insurance Act (12 U.S.C.
Sec. 1817 and 1823(c)(4)(G));
(ii) a member of the Securities Investor
Protection Corporation pursuant to section 4 of
the Securities Investor Protection Act of 1970
(15 U.S.C. 78ddd); or
(iii) an insurance company pursuant to
applicable State law to cover (or reimburse
payments made to cover) the costs of
rehabilitation, liquidation, or other State
insolvency proceeding with respect to one or
more insurance companies;
(C) take into account the risks presented by the
financial company to financial stability or the U.S.
economy and the extent to which the financial company
has, benefitted, or likely would benefit, from the
resolution of a financial company under this Act;
(D) take into account such other factors as the
Corporation deems appropriate;
(E) distinguish among different classes of assets
or different types of financial companies in order to
establish comparable assessment bases among financial
companies subject to this subsection; and
(F) establish the parameters for the graduated
assessment regime described in paragraph (2).
(4) Collection of information.--The Corporation may impose
on financial companies such collection of information
requirements that the Corporation deems necessary to carry out
this subsection after a determination under section 1603(b).
(5) Rulemaking.--The Corporation shall, in consultation
with the Secretary and the Federal Reserve Board, prescribe
regulations to carry out this subsection.
(p) No Federal Status.--
(1) Agency status.--A covered financial company (or any
covered subsidiary thereof) that is placed into receivership or
qualified receivership is not a department, agency, or
instrumentality of the United States for purposes of statutes
that confer powers on or impose obligations on government
entities.
(2) Employee status.--Interim directors, directors,
officers, employees, or agents of a covered financial company
that is placed into receivership or qualified receivership are
not, solely by virtue of service in any such capacity, officers
or employees of the United States. Any employee of the
Corporation, acting as receiver or qualified receiver, or of
any Federal agency who serves at the request of the receiver or
qualified receiver as an interim director, director, officer,
employee, or agent of a covered financial company that is
placed into receivership or qualified receivership shall not--
(A) solely by virtue of service in any such
capacity lose any existing status as an officer or
employee of the United States for purposes of title 5,
United States Code, or any other provision of law, or
(B) receive any salary or benefits for service in
any such capacity with respect to a covered financial
company that is placed into receivership or qualified
receivership in addition to such salary or benefits as
are obtained through employment with the Corporation or
other Federal agency.
SEC. 1610. CLARIFICATION OF PROHIBITION REGARDING CONCEALMENT OF ASSETS
FROM QUALIFIED RECEIVER, RECEIVER, OR LIQUIDATING AGENT.
(a) In General.--Section 1032 of title 18, United States Code, is
amended in paragraph (1) by deleting ``or'' before ``the National
Credit Union Administration Board,'' and by inserting immediately
thereafter ``or the Corporation, as defined in section 1602 of the
Resolution Authority for Large, Interconnected Financial Companies Act
of 2009,''.
(b) Conforming Change.--The heading of section 1032 of title 18,
United States Code, is amended by striking ``of financial
institution''.
SEC. 1611. MISCELLANEOUS PROVISIONS.
(a) Bankruptcy Code Amendments.--Section 109(b)(2) of title 11 of
the United States Code is amended by inserting ``covered financial
company (as that term is defined in section 1602(5) of the Resolution
Authority for Large, Interconnected Financial Companies Act of 2009),''
after ``a domestic insurance company,''.
(b) Federal Deposit Insurance Act and Federal Deposit Insurance
Corporation Improvement Act of 1991.--
(1) Section 18(c)(4)(G)(i) of the Federal Deposit Insurance
Act (12 U.S.C. 1823(c)(4)(G)(i)) is amended by inserting at the
end the following new sentence: ``The determination with regard
to the Corporation's exercise of authority under this
subparagraph shall apply to only an insured depository
institution except when severe financial conditions exist which
threaten the stability of a significant number of insured
depository institutions.''.
(2) Section 403(a) of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 4403(a)) is
amended by inserting ``section 1609(c) of the Resolution
Authority for Large, Interconnected Financial Companies Act of
2009, section 1367 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4617(d)),'' after
``section 11(e) of the Federal Deposit Insurance Act,''.
Subtitle H--Additional Improvements for Financial Crisis Management
SEC. 1701. ADDITIONAL IMPROVEMENTS FOR FINANCIAL CRISIS MANAGEMENT.
Section 13 of the Federal Reserve Act is amended in the 3rd
undesignated paragraph (12 U.S.C. 343) to read as follows:
``In unusual and exigent circumstances, the Board of Governors of
the Federal Reserve System, by the affirmative vote of not less than
five members and with the written concurrence of the Secretary of the
Treasury, may authorize any Federal reserve bank, during such periods
as the said board may determine, at rates established in accordance
with the provisions of section 14, subdivision (d) of this Act (12
U.S.C. 357), to discount for an individual, partnership, or
corporation, notes, drafts, and bills of exchange when such notes,
drafts, and bills of exchange are indorsed or otherwise secured to the
satisfaction of the Federal reserve bank: Provided, That the Board of
Governors of the Federal Reserve System may authorize a Federal reserve
bank to discount notes, drafts, or bills of exchange under this section
only as part of a broadly available credit or other facility and may
not authorize a Federal Reserve bank to discount notes, drafts, or
bills of exchange for only a single and specific individual,
partnership, or corporation: And provided further that before
discounting any such note, draft, or bill of exchange for an
individual, a partnership or corporation the Federal reserve bank shall
obtain evidence that such individual, partnership, or corporation is
unable to secure adequate credit accommodations from other banking
institutions. All discounts under this paragraph for individuals,
partnerships, or corporations shall be subject to such limitations,
restrictions, and regulations as the Board of Governors of the Federal
Reserve System may prescribe.''.
<all>
Introduced in House
Introduced in House
Referred to House Financial Services
Referred to the Committee on Financial Services, and in addition to the Committees on the Judiciary, Agriculture, and Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to House Judiciary
Referred to House Agriculture
Referred to House Ways and Means
Committee Consideration and Mark-up Session Held.
Ordered to be Reported (Amended) by the Yeas and Nays: 31 - 27.
Referred to the Subcommittee on General Farm Commodities and Risk Management.
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