Financial CHOICE Act of 2016
This bill amends the Dodd-Frank Wall Street Reform and Consumer Protection Act, among other Acts, to:
Certain banks may exempt themselves from specified regulatory standards if they maintain a certain ratio of capital to total assets and meet other specified requirements.
The bill removes the Financial Stability Oversight Council's authority to designate non-bank financial institutions and financial market utilities as "systemically important" (also known as "too big to fail"). Under current law, entities so designated are subject to additional regulatory restrictions. Designations made previously are retroactively repealed.
The bill also amends the Consumer Financial Protection Act of 2010 to:
In addition, the bill:
[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5983 Introduced in House (IH)]
<DOC>
114th CONGRESS
2d Session
H. R. 5983
To create hope and opportunity for consumers, investors, and
entrepreneurs by ending bailouts and Too Big to Fail, holding
Washington and Wall Street accountable, eliminating red tape to
increase access to capital and credit, and repealing the provisions of
the Dodd-Frank Act that make America less prosperous, less stable, and
less free, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 9, 2016
Mr. Hensarling (for himself, Mr. Garrett, Mr. Neugebauer, Mr.
Luetkemeyer, Mr. Huizenga of Michigan, and Mr. Duffy) introduced the
following bill; which was referred to the Committee on Financial
Services, and in addition to the Committees on Agriculture, Ways and
Means, the Judiciary, Oversight and Government Reform, Transportation
and Infrastructure, Rules, the Budget, and Education and the Workforce,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of
the committee concerned
_______________________________________________________________________
A BILL
To create hope and opportunity for consumers, investors, and
entrepreneurs by ending bailouts and Too Big to Fail, holding
Washington and Wall Street accountable, eliminating red tape to
increase access to capital and credit, and repealing the provisions of
the Dodd-Frank Act that make America less prosperous, less stable, and
less free, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Financial CHOICE
Act of 2016''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--REGULATORY RELIEF FOR STRONGLY CAPITALIZED, WELL MANAGED
BANKING ORGANIZATIONS
Sec. 101. Capital election.
Sec. 102. Regulatory relief.
Sec. 103. Contingent capital study.
Sec. 104. Study on altering the current prompt corrective action rules.
Sec. 105. Definitions.
TITLE II--ENDING ``TOO BIG TO FAIL'' AND BANK BAILOUTS
Subtitle A--Reform of the Financial Stability Act of 2010
Sec. 211. Repeal and modification of provisions of the Financial
Stability Act of 2010.
Subtitle B--Repeal of the Orderly Liquidation Authority
Sec. 221. Repeal of the orderly liquidation authority.
Subtitle C--Financial Institution Bankruptcy
Sec. 231. General provisions relating to covered financial
corporations.
Sec. 232. Liquidation, reorganization, or recapitalization of a covered
financial corporation.
Sec. 233. Amendments to title 28, United States Code.
Subtitle D--Ending Government Guarantees
Sec. 241. Repeal of obligation guarantee program.
Sec. 242. Repeal of systemic risk determination in resolutions.
Sec. 243. Restrictions on use of the Exchange Stabilization Fund.
Subtitle E--Eliminating Financial Market Utility Designations
Sec. 251. Repeal of title VIII.
TITLE III--EMPOWERING AMERICANS TO ACHIEVE FINANCIAL INDEPENDENCE
Subtitle A--Separation of Powers and Liberty Enhancements
Sec. 311. Consumer Financial Opportunity Commission.
Sec. 312. Bringing the Commission into the regular appropriations
process.
Sec. 313. Consumer Financial Opportunity Commission Inspector General
Reform.
Sec. 314. Private parties authorized to compel the Commission to seek
sanctions by filing civil actions;
Adjudications deemed actions.
Sec. 315. Civil investigative demands to be appealed to courts.
Sec. 316. Commission dual mandate and economic analysis.
Sec. 317. No deference to Commission interpretation.
Subtitle B--Administrative Enhancements
Sec. 321. Commission Advisory Boards.
Sec. 322. Advisory opinions.
Sec. 323. Reform of Consumer Financial Civil Penalty Fund.
Sec. 324. Commission research paper transparency.
Sec. 325. Commission pay fairness.
Sec. 326. Separation of market monitoring functions and supervisory
functions.
Sec. 327. Requirement to verify information in the complaint database
before it may be released to the general
public.
Sec. 328. Commission supervision limited to banks, thrifts, and credit
unions with greater than $50 billion in
assets.
Sec. 329. Transfer of old OTS building from OCC to GSA.
Subtitle C--Policy Enhancements
Sec. 331. Consumer right to financial privacy.
Sec. 332. Repeal of Council authority to set aside Bureau rules and
requirement of safety and soundness
considerations when issuing rules.
Sec. 333. State and tribal payday loan regulation 5-year exemption.
Sec. 334. Reforming indirect auto financing guidance.
Sec. 335. Prohibition of Government price controls for payment card
transactions.
Sec. 336. Annual studies on ending the conservatorship of Fannie Mae,
Freddie Mac, and reforming the housing
finance system.
Sec. 337. Removal of ``abusive'' authority.
Sec. 338. Repeal of authority to restrict arbitration.
TITLE IV--CAPITAL MARKETS IMPROVEMENTS
Subtitle A--SEC Reform, Restructuring, and Accountability
Sec. 401. Authorization of appropriations.
Sec. 402. Report on unobligated appropriations.
Sec. 403. SEC Reserve Fund abolished.
Sec. 404. Fees to offset appropriations.
Sec. 405. Implementation of recommendations.
Sec. 406. Office of Credit Ratings to report to the Division of Trading
and Markets.
Sec. 407. Office of Municipal Securities to report to the Division of
Trading and Markets.
Sec. 408. Independence of Commission Ombudsman.
Sec. 409. Coordination with the Investor Advisory Committee.
Sec. 410. Duties of Investor Advocate.
Sec. 411. Internal risk controls.
Sec. 412. Applicability of Notice and Comment Requirements of the
Administrative Procedure Act to Guidance
Voted on by the Commission.
Sec. 413. Process for closing investigations.
Sec. 414. Enforcement Ombudsman.
Sec. 415. Process to ensure enforcement actions are within authority of
Commission.
Sec. 416. Process to permit recipient of Wells notification to appear
before Commission staff in-person.
Sec. 417. Publication of enforcement manual.
Sec. 418. Private parties authorized to compel the Securities and
Exchange Commission to seek sanctions by
filing civil actions.
Sec. 419. Certain findings required to approve civil money penalties
against issuers.
Sec. 420. Repeal of authority of the Commission to prohibit persons
from serving as officers or directors.
Sec. 421. Subpoena duration and renewal.
Sec. 422. Elimination of automatic disqualifications.
Sec. 423. Confidentiality of records obtained from foreign securities
and law enforcement authorities.
Sec. 424. Clarification of authority to impose sanctions on persons
associated with a broker or dealer.
Sec. 425. Congressional access to information held by the Public
Company Accounting Oversight Board.
Sec. 426. Repeal of requirement for Public Company Accounting Oversight
Board to use certain funds for merit
scholarship program.
Sec. 427. Reallocation of fines for violations of rules of municipal
securities rulemaking board.
Subtitle B--Eliminating Excessive Government Intrusion in the Capital
Markets
Sec. 441. Repeal of Department of Labor fiduciary rule and requirements
prior to rulemaking relating to standards
of conduct for brokers and dealers.
Sec. 442. Exemption from risk retention requirements for nonresidential
mortgage.
Sec. 443. Frequency of shareholder approval of executive compensation.
Sec. 444. Requirement for municipal advisor for issuers of municipal
securities.
Sec. 445. Small issuer exemption from internal control evaluation.
Sec. 446. Exemptive authority for certain provisions relating to
registration of nationally recognized
statistical rating organizations.
Sec. 447. Restriction on recovery of erroneously awarded compensation.
Sec. 448. Risk-Based Examinations of Nationally Recognized Statistical
Rating Organizations.
Sec. 449. Repeals.
Sec. 450. Exemption of and reporting by private equity fund advisers.
Sec. 451. Records and reports of private funds.
Sec. 452. Definition of accredited investor.
Sec. 453. Repeal of certain provisions requiring a study and report to
Congress.
Sec. 454. Technical correction.
Sec. 455. Repeal.
Subtitle C--Commodity Futures Trading Commission Reforms
Sec. 461. Division directors.
Sec. 462. Procedures governing actions taken by commission staff.
Sec. 463. Strategic technology plan.
Sec. 464. Internal risk controls.
Sec. 465. Subpoena duration and renewal.
Sec. 466. Applicability of notice and comment requirements of the
administrative procedure act to guidance
voted on by the commission.
Sec. 467. Judicial review of commission rules.
Sec. 468. Cross-border regulation of derivatives transactions.
Subtitle D--Harmonization of Derivatives Rules
Sec. 471. Agency review and harmonization of rules relating to the
regulation of over-the-counter swaps
markets.
TITLE V--IMPROVING INSURANCE COORDINATION THROUGH AN INDEPENDENT
ADVOCATE
Sec. 501. Repeal of the Federal Insurance Office; Creation of the
Office of the Independent Insurance
Advocate.
Sec. 502. Treatment of covered agreements.
TITLE VI--DEMANDING ACCOUNTABILITY FROM FINANCIAL REGULATORS AND
DEVOLVING POWER AWAY FROM WASHINGTON
Subtitle A--Cost-Benefit Analyses
Sec. 611. Definitions.
Sec. 612. Required regulatory analysis.
Sec. 613. Rule of construction.
Sec. 614. Public availability of data and regulatory analysis.
Sec. 615. Five-year regulatory impact analysis.
Sec. 616. Retrospective review of existing rules.
Sec. 617. Judicial review.
Sec. 618. Chief Economists Council.
Sec. 619. Conforming amendments.
Sec. 620. Other regulatory entities.
Sec. 621. Avoidance of duplicative or unnecessary analyses.
Subtitle B--Congressional Review of Federal Financial Agency Rulemaking
Sec. 631. Congressional review.
Sec. 632. Congressional approval procedure for major rules.
Sec. 633. Congressional disapproval procedure for nonmajor rules.
Sec. 634. Definitions.
Sec. 635. Judicial review.
Sec. 636. Effective date of certain rules.
Sec. 637. Budgetary effects of rules subject to section 632 of the
Financial CHOICE Act of 2016.
Subtitle C--Judicial Review of Agency Actions
Sec. 641. Scope of judicial review of agency actions.
Subtitle D--Leadership of Financial Regulators
Sec. 651. Federal Deposit Insurance Corporation.
Sec. 652. Federal Housing Finance Agency.
Sec. 653. National Credit Union Administration.
Sec. 654. Office of the Comptroller of the Currency.
Subtitle E--Congressional Oversight of Appropriations
Sec. 661. Bringing the Federal Deposit Insurance Corporation into the
regular appropriations process.
Sec. 662. Bringing the Federal Housing Finance Agency into the regular
appropriations process.
Sec. 663. Bringing the National Credit Union Administration into the
regular appropriations process.
Sec. 664. Bringing the Office of the Comptroller of the Currency into
the regular appropriations process.
Sec. 665. Bringing the non-monetary policy related functions of the
Board of Governors of the Federal Reserve
System into the regular appropriations
process.
Subtitle F--International Processes
Sec. 671. Requirements for international processes.
TITLE VII--FED OVERSIGHT REFORM AND MODERNIZATION
Sec. 701. Requirements for policy rules of the Federal Open Market
Committee.
Sec. 702. Federal Open Market Committee blackout period.
Sec. 703. Membership of Federal Open Market Committee.
Sec. 704. Frequency of testimony of the Chairman of the Board of
Governors of the Federal Reserve System to
Congress.
Sec. 705. Vice Chairman for Supervision report requirement.
Sec. 706. Salaries, financial disclosures, and office staff of the
Board of Governors of the Federal Reserve
System.
Sec. 707. Amendments to powers of the Board of Governors of the Federal
Reserve System.
Sec. 708. Interest rates on balances maintained at a Federal Reserve
bank by depository institutions established
by Federal Open Market Committee.
Sec. 709. Audit reform and transparency for the Board of Governors of
the Federal Reserve System.
Sec. 710. Establishment of a Centennial Monetary Commission.
Sec. 711. Public transcripts of FOMC meetings.
TITLE VIII--DEMANDING ACCOUNTABILITY FROM WALL STREET
Subtitle A--SEC Penalties Modernization
Sec. 801. Enhancement of civil penalties for securities laws
violations.
Sec. 802. Updated civil money penalties of Public Company Accounting
Oversight Board.
Sec. 803. Updated civil money penalty for controlling persons in
connection with insider trading.
Sec. 804. Update of certain other penalties.
Sec. 805. Monetary sanctions to be used for the relief of victims.
Sec. 806. GAO report on use of civil money penalty authority by
Commission.
Subtitle B--FIRREA Penalties Modernization
Sec. 811. Increase of civil and criminal penalties originally
established in the Financial Institutions
Reform, Recovery, and Enforcement Act of
1989.
TITLE IX--REPEAL OF THE VOLCKER RULE AND OTHER PROVISIONS
Sec. 901. Repeals.
TITLE X--UNLEASHING OPPORTUNITIES FOR SMALL BUSINESSES, INNOVATORS, AND
JOB CREATORS BY FACILITATING CAPITAL FORMATION
Subtitle A--Small Business Mergers, Acquisitions, Sales, and Brokerage
Simplification
Sec. 1001. Registration exemption for merger and acquisition brokers.
Sec. 1002. Effective date.
Subtitle B--Encouraging Employee Ownership
Sec. 1006. Increased threshold for disclosures relating to compensatory
benefit plans.
Subtitle C--Small Company Disclosure Simplification
Sec. 1011. Exemption from XBRL requirements for emerging growth
companies and other smaller companies.
Sec. 1012. Analysis by the SEC.
Sec. 1013. Report to Congress.
Sec. 1014. Definitions.
Subtitle D--Securities and Exchange Commission Overpayment Credit
Sec. 1016. Refunding or crediting overpayment of section 31 fees.
Subtitle E--Fair Access to Investment Research
Sec. 1021. Safe harbor for investment fund research.
Subtitle F--Accelerating Access to Capital
Sec. 1026. Expanded eligibility for use of Form S-3.
Subtitle G--SEC Small Business Advocate
Sec. 1031. Establishment of Office of the Advocate for Small Business
Capital Formation and Small Business
Capital Formation Advisory Committee.
Subtitle H--Small Business Credit Availability
Sec. 1036. Business development company ownership of securities of
investment advisers and certain financial
companies.
Sec. 1037. Expanding access to capital for business development
companies.
Sec. 1038. Parity for business development companies regarding offering
and proxy rules.
Subtitle I--Fostering Innovation
Sec. 1041. Temporary exemption for low-revenue issuers.
Subtitle J--Small Business Capital Formation Enhancement
Sec. 1046. Annual review of government-business forum on capital
formation.
Subtitle K--Helping Angels Lead Our Startups
Sec. 1051. Definition of angel investor group.
Sec. 1052. Clarification of general solicitation.
Subtitle L--Main Street Growth
Sec. 1056. Venture exchanges.
Subtitle M--Micro Offering Safe Harbor
Sec. 1061. Exemptions for micro-offerings.
Subtitle N--Private Placement Improvement
Sec. 1066. Revisions to SEC Regulation D.
Subtitle O--Supporting America's Innovators
Sec. 1071. Investor limitation for qualifying venture capital funds.
Subtitle P--Fix Crowdfunding
Sec. 1076. Crowdfunding vehicles.
Sec. 1077. Crowdfunding exemption from registration.
Subtitle Q--Corporate Governance Reform and Transparency
Sec. 1081. Definitions.
Sec. 1082. Registration of proxy advisory firms.
Sec. 1083. Commission annual report.
Subtitle R--Senior Safe
Sec. 1091. Immunity.
Sec. 1092. Training required.
Sec. 1093. Relationship to State law.
Subtitle S--National Securities Exchange Regulatory Parity
Sec. 1096. Application of exemption.
TITLE XI--REGULATORY RELIEF FOR MAIN STREET AND COMMUNITY FINANCIAL
INSTITUTIONS
Subtitle A--Preserving Access to Manufactured Housing
Sec. 1101. Mortgage originator definition.
Sec. 1102. High-Cost mortgage definition.
Subtitle B--Mortgage Choice
Sec. 1106. Definition of points and fees.
Subtitle C--Financial Institution Customer Protection
Sec. 1111. Requirements for deposit account termination requests and
orders.
Sec. 1112. Amendments to the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989.
Subtitle D--Portfolio Lending and Mortgage Access
Sec. 1116. Safe harbor for certain loans held on portfolio.
Subtitle E--Application of the Expedited Funds Availability Act
Sec. 1121. Application of the Expedited Funds Availability Act.
Subtitle F--Small Bank Holding Company Policy Statement
Sec. 1126. Changes required to small bank holding company policy
statement on assessment of financial and
managerial factors.
Subtitle G--Community Institution Mortgage Relief
Sec. 1131. Community financial institution mortgage relief.
Subtitle H--Financial Institutions Examination Fairness and Reform
Sec. 1136. Timeliness of examination reports.
Subtitle I--National Credit Union Administration Budget Transparency
Sec. 1141. Budget transparency for the NCUA.
Subtitle J--Taking Account of Institutions With Low Operation Risk
Sec. 1146. Regulations appropriate to business models.
Subtitle K--Federal Savings Association Charter Flexibility
Sec. 1151. Option for Federal savings associations to operate as a
covered savings association.
Subtitle L--SAFE Transitional Licensing
Sec. 1156. Eliminating barriers to jobs for loan originators.
Subtitle M--Right to Lend
Sec. 1161. Small business loan data collection requirement.
Subtitle N--Community Bank Reporting Relief
Sec. 1166. Short form call report.
Subtitle O--Homeowner Information Privacy Protection
Sec. 1171. Study regarding privacy of information collected under the
Home Mortgage Disclosure Act of 1975.
Subtitle P--Home Mortgage Disclosure Adjustment
Sec. 1176. Depository institutions subject to maintenance of records
and disclosure requirements.
Subtitle Q--National Credit Union Administration Advisory Council
Sec. 1181. Credit Union Advisory Council.
Subtitle R--Credit Union Examination Reform
Sec. 1186. Extension of examination cycle of the National Credit Union
Administration to 18 months or longer.
Subtitle S--NCUA Overhead Transparency
Sec. 1191. Fund transparency.
TITLE I--REGULATORY RELIEF FOR STRONGLY CAPITALIZED, WELL MANAGED
BANKING ORGANIZATIONS
SEC. 101. CAPITAL ELECTION.
(a) In General.--A banking organization may make an election under
this section to be treated as a qualifying banking organization for
purposes of the regulatory relief described under section 102.
(b) Requirements.--A banking organization may qualify to be treated
as a qualifying banking organization if--
(1) the banking organization has an average leverage ratio
of at least 10 percent;
(2) with respect to a banking organization that is an
insured depository institution or insured credit union, the
institution received a CAMELS composite rating of 1 or 2 under
the Uniform Financial Institutions Rating System (or an
equivalent rating under a comparable rating system) as of the
most recent examination of the institution;
(3) with respect to a depository institution holding
company, each insured depository institution subsidiary of the
holding company simultaneously makes the election described
under subsection (a); and
(4) with respect to an insured depository institution, any
parent depository institution holding company of the
institution simultaneously makes the election described under
subsection (a).
(c) Election Process.--To make an election under this section, a
banking organization shall submit an election to the appropriate
Federal banking agency (and any applicable State bank supervisor that
regulates the banking organization) containing--
(1) a notice of such election;
(2) the banking organization's average leverage ratio, as
well as the organization's quarterly leverage ratio for each of
the most recently completed four calendar quarters;
(3) if the banking organization is a depository institution
holding company, the information described under paragraph (2)
for each of the organization's insured depository institution
subsidiaries; and
(4) if the banking organization is an insured depository
institution, the information described under paragraph (2) for
any parent depository institution holding company of the
institution.
(d) Effective Date of Election.--
(1) In general.--An election made under this section shall
take effect at the end of the 30-day period beginning on the
date that the appropriate Federal banking agency receives the
application described under subsection (c), unless the
appropriate Federal banking agency determines that the banking
organization has not met the requirements described under
subsection (b).
(2) Notice of failure to meet requirements.--If the
appropriate Federal banking agency determines that a banking
organization submitting an election notice under subsection (c)
does not meet the requirements described under subsection (b),
the agency shall--
(A) notify the banking organization (and any
applicable State bank supervisor that regulates the
banking organization), in writing, of such
determination as soon as possible after such
determination is made, but in no case later than the
end of the 30-day period beginning on the date that the
appropriate Federal banking agency receives the
election; and
(B) include in such notification the specific
reasons for such determination and steps that the
banking organization can take to meet such
requirements.
(e) Treatment of Certain New Banking Organizations.--In the case of
a banking organization that is a newly-chartered insured depository
institution or a banking organization that becomes a banking
organization because it controls a newly-chartered insured depository
institution, such banking organization may be treated as a qualifying
banking organization immediately upon becoming a banking organization,
if--
(1) an election to be treated as a qualifying banking
organization was included in the application filed with the
appropriate Federal banking agency in connection with becoming
a banking organization; and
(2) as of the date the banking organization becomes a
banking organization, the banking organization's tangible
equity divided by the banking organization's leverage exposure,
expressed as a percentage, is at least 10 percent.
(f) Failure to Maintain Quarterly Leverage Ratio and Loss of
Election.--
(1) Effect of failure to maintain quarterly leverage
ratio.--
(A) In general.--If, with respect to the most
recently completed calendar quarter, the appropriate
Federal banking agency determines that a qualifying
banking organization's quarterly leverage ratio is
below 10 percent--
(i) the appropriate Federal banking agency
shall notify the qualifying banking
organization and any applicable State bank
supervisor that regulates the banking
organization of such determination;
(ii) the appropriate Federal banking agency
may prohibit the banking organization from
making a capital distribution; and
(iii) the banking organization shall,
within 3 months of the first such
determination, submit a capital restoration
plan to the appropriate Federal banking agency.
(B) Loss of election after one-year remediation
period.--If a banking organization described under
subparagraph (A) does not, within the 1-year period
beginning on the date of such determination, raise the
organization's quarterly leverage ratio for a calendar
quarter ending in such 1-year period to at least 10
percent, the banking organization's election under this
section shall be terminated, and the appropriate
Federal banking agency shall notify any applicable
State bank supervisor that regulates the banking
organization of such termination.
(C) Effect of subsidiary on parent organization.--
With respect to a qualifying banking organization
described under subparagraph (A) that is an insured
depository institution, any parent depository
institution holding company of the qualifying banking
organization shall--
(i) if the appropriate Federal banking
agency determines it appropriate, be prohibited
from making a capital distribution (other than
a capital contribution to such qualifying
banking organization described under
subparagraph (A)); and
(ii) if the qualifying banking organization
has an election terminated under subparagraph
(B), any such parent depository institution
holding company shall also have its election
under this section terminated.
(2) Immediate loss of election if the quarterly leverage
ratio falls below 6 percent.--
(A) In general.--If, with respect to the most
recently completed calendar quarter, the appropriate
Federal banking agency determines that a qualifying
banking organization's quarterly leverage ratio is
below 6 percent, the banking organization's election
under this section shall be terminated, and the
appropriate Federal banking agency shall notify any
applicable State bank supervisor that regulates the
banking organization of such termination.
(B) Effect of subsidiary on parent organization.--
With respect to a qualifying banking organization
described under subparagraph (A) that is an insured
depository institution, any parent depository
institution holding company of the qualifying banking
organization shall also have its election under this
section terminated.
(3) Ability to make future elections.--If a banking
organization has an election under this section terminated, the
banking organization may not apply for another election under
this section until the banking organization has maintained a
quarterly leverage ratio of at least 10 percent for 8
consecutive calendar quarters.
SEC. 102. REGULATORY RELIEF.
(a) In General.--A qualifying banking organization shall be exempt
from the following:
(1) Any Federal law, rule, or regulation addressing capital
or liquidity requirements or standards.
(2) Any Federal law, rule, or regulation that permits an
appropriate Federal banking agency to object to a capital
distribution.
(3) Any consideration by an appropriate Federal banking
agency of the following:
(A) Any risk the qualifying banking organization
may pose to ``the stability of the financial system of
the United States'', under section 5(c)(2) of the Bank
Holding Company Act of 1956.
(B) The ``extent to which a proposed acquisition,
merger, or consolidation would result in greater or
more concentrated risks to the stability of the United
States banking or financial system'', under section
3(c)(7) of the Bank Holding Company Act of 1956, so
long as the banking organization, after such proposed
acquisition, merger, or consolidation, would maintain a
quarterly leverage ratio of at least 10 percent.
(C) Whether the performance of an activity by the
banking organization could possibly pose a ``risk to
the stability of the United States banking or financial
system'', under section 4(j)(2)(A) of the Bank Holding
Company Act of 1956.
(D) Whether the acquisition of control of shares of
a company engaged in an activity described in section
4(j)(1)(A) of the Bank Holding Company Act of 1956
could possibly pose a ``risk to the stability of the
United States banking or financial system'', under
section 4(j)(2)(A) of the Bank Holding Company Act of
1956, so long as the banking organization, after
acquiring control of such company, would maintain a
quarterly leverage ratio of at least 10 percent.
(E) Whether a merger would pose a ``risk to the
stability of the United States banking or financial
system'', under section 18(c)(5) of the Federal Deposit
Insurance Act, so long as the banking organization,
after such proposed merger, would maintain a quarterly
leverage ratio of at least 10 percent.
(F) Any risk the qualifying banking organization
may pose to ``the stability of the financial system of
the United States'', under section 10(b)(4) of the Home
Owners' Loan Act.
(4) Subsections (i)(8) and (k)(6)(B)(ii) of section 4 and
section 14 of the Bank Holding Company Act of 1956.
(5) Section 18(c)(13) of the Federal Deposit Insurance Act.
(6) Section 163 of the Financial Stability Act of 2010.
(7) Section 10(e)(2)(E) of the Home Owners' Loan Act.
(8) Any Federal law, rule, or regulation implementing
standards of the type provided for in subsections (b), (c),
(d), (e), (g), (h), (i), and (j) of section 165 of the
Financial Stability Act of 2010.
(9) Any Federal law, rule, or regulation providing
limitations on mergers, consolidations, or acquisitions of
assets or control, to the extent such limitations relate to
capital or liquidity standards or concentrations of deposits or
assets, so long as the banking organization, after such
proposed merger, consolidation, or acquisition, would maintain
a quarterly leverage ratio of at least 10 percent.
(b) Stress Test Exception.--Notwithstanding subsection (a), other
than paragraph (2) of subsection (a), the appropriate Federal banking
agencies may conduct stress tests of qualifying banking organizations.
A qualifying banking organization with total consolidated assets of
more than $10,000,000,000 and less than $50,000,000,000 shall not be
required to conduct annual stress tests required under section
165(i)(2)(A) of the Financial Stability Act of 2010.
(c) Qualifying Banking Organizations Treated as Well Capitalized.--
A qualifying banking organization shall be deemed to be ``well
capitalized'' for purposes of--
(1) section 216 of the Federal Credit Union Act; and
(2) sections 29, 38, 44, and 46 of the Federal Deposit
Insurance Act.
(d) Treatment of Certain Risk-weighted Asset Requirements for
Qualifying Banking Organizations.--
(1) Acquisition size criteria treatment.--A qualifying
banking organization shall be deemed to meet the criteria
described under section 4(j)(4)(D) of the Bank Holding Company
Act of 1956, so long as after the proposed transaction the
acquiring qualifying banking organization would maintain a
quarterly leverage ratio of at least 10 percent.
(2) Use of leverage exposure.--With respect to a qualifying
banking organization, in determining whether a proposal
qualifies with the criteria described under subparagraphs
(A)(iii) and (B)(i) of section 4(j)(4) of the Bank Holding
Company Act of 1956, the Board of Governors of the Federal
Reserve System shall consider the leverage exposure of an
insured depository institution instead of the total risk-
weighted assets of such institution.
SEC. 103. CONTINGENT CAPITAL STUDY.
(a) Study.--The Board of Governors of the Federal Reserve System,
the Federal Deposit Insurance Corporation, and the Office of the
Comptroller of the Currency shall each carry out a study, which shall
include holding public hearings, on how to design a requirement that
banking organizations issue contingent capital with a market-based
conversion trigger.
(b) Report.--Not later than the end of the 1-year period beginning
on the date of the enactment of this Act, each agency described under
subsection (a) shall submit a report to the Congress containing--
(1) all findings and determinations made by the agency in
carrying out the study required under subsection (a); and
(2) the agency's recommendations on how the Congress should
design a requirement that banking organizations issue
contingent capital with a market-based conversion trigger.
SEC. 104. STUDY ON ALTERING THE CURRENT PROMPT CORRECTIVE ACTION RULES.
(a) Study.--The Comptroller General of the United States shall
conduct a study to assess the benefits and feasibility of altering the
current prompt corrective action rules and replacing the Basel-based
capital ratios with the nonperforming asset coverage ratio or NACR as
the trigger for specific required supervisory interventions. The
Comptroller General shall ensure that such study includes the
following:
(1) An assessment of the performance of an NACR forward-
looking measure of a banking organization's solvency condition
relative to the regulatory capital ratios currently used by
prompt corrective action rules.
(2) An analysis of the performance of alternative
definitions of nonperforming assets.
(3) An assessment of the impact of two alternative
intervention thresholds:
(A) An initial (high) intervention threshold, below
which appropriate Federal banking agency examiners are
required to intervene and assess a banking
organization's condition and prescribe remedial
measures.
(B) A lower threshold, below which banking
organizations must increase their capital, seek an
acquirer, or face mandatory resolution within 90 days.
(b) Report.--Not later than the end of the 1-year period beginning
on the date of the enactment of this Act, the Comptroller General shall
submit a report to the Congress containing--
(1) all findings and determinations made in carrying out
the study required under subsection (a); and
(2) recommendations on the most suitable definition of
nonperforming assets, as well as the two numerical thresholds
that trigger specific required supervisory interventions.
SEC. 105. DEFINITIONS.
For purposes of this title:
(1) Appropriate federal banking agency.--The term
``appropriate Federal banking agency''--
(A) has the meaning given such term under section 3
of the Federal Deposit Insurance Act; and
(B) means the National Credit Union Administration,
in the case of an insured credit union.
(2) Banking organization.--The term ``banking
organization'' means--
(A) an insured depository institution;
(B) an insured credit union;
(C) a depository institution holding company;
(D) a company that is treated as a bank holding
company for purposes of section 8 of the International
Banking Act; and
(E) a U.S. intermediate holding company established
by a foreign banking organization pursuant to section
252.153 of title 12, Code of Federal Regulations.
(3) Foreign exchange swap .--The term ``foreign exchange
swap'' has the meaning given that term under section 1a of the
Commodity Exchange Act.
(4) Insured credit union.--The term ``insured credit
union'' has the meaning given that term under section 101 of
the Federal Credit Union Act.
(5) Leverage exposure.--The term ``leverage exposure''--
(A) with respect to a banking organization other
than a credit union or a traditional banking
organization, has the meaning given the term ``total
leverage exposure'' under section 3.10(c)(4)(ii),
217.10(c)(4), or 324.10(c)(4) of title 12, Code of
Federal Regulations, as applicable, as in effect on
January 1, 2015;
(B) with respect to a traditional banking
organization other than a credit union, means total
assets (minus any items deducted from common equity
tier 1 capital) as calculated in accordance with
generally accepted accounting principles and as
reported on the traditional banking organization's
applicable regulatory filing with the banking
organization's appropriate Federal banking agency; and
(C) with respect to a banking organization that is
a credit union, has the meaning given the term ``total
assets'' under section 702.2 of title 12, Code of
Federal Regulations, as in effect on January 1, 2015.
(6) Leverage ratio definitions.--
(A) Average leverage ratio.--With respect to a
banking organization, the term ``average leverage
ratio'' means the average of the banking organization's
quarterly leverage ratios for each of the most recently
completed four calendar quarters.
(B) Quarterly leverage ratio.--With respect to a
banking organization and a calendar quarter, the term
``quarterly leverage ratio'' means the organization's
tangible equity divided by the organization's leverage
exposure, expressed as a percentage, on the last day of
such quarter.
(7) NACR.--The term ``NACR'' means--
(A) book equity less nonperforming assets plus loan
loss reserves, divided by
(B) total banking organization assets.
(8) Nonperforming assets.--The term ``nonperforming
assets'' means--
(A) 20 percent of assets that are past due 30 to 89
days, plus
(B) 50 percent of assets that are past due 90 days
or more, plus
(C) 100 percent of nonaccrual assets and other real
estate owned.
(9) Qualifying banking organization.--The term ``qualifying
banking organization'' means a banking organization that has
made an election under section 101 and with respect to which
such election is in effect.
(10) Security-based swap .--The term ``security-based
swap'' has the meaning given that term under section 3 of the
Securities Exchange Act of 1934.
(11) Swap .--The term ``swap'' has the meaning given that
term under section 1a of the Commodity Exchange Act.
(12) Tangible equity.--The term ``tangible equity''--
(A) with respect to a banking organization other
than a credit union, means the sum of--
(i) common equity tier 1 capital;
(ii) additional tier 1 capital consisting
of instruments issued on or before June 1,
2016; and
(iii) with respect to a depository
institution holding company that had less than
$15,000,000,000 in total consolidated assets as
of December 31, 2009, or March 31, 2010, or a
banking organization that was a mutual holding
company as of May 19, 2010, trust preferred
securities issued prior to May 19, 2010, to the
extent such organization was permitted, as of
the date of the enactment of this Act, to
consider such securities as tier 1 capital
under existing regulations of the appropriate
Federal banking agency; and
(B) with respect to a banking organization that is
a credit union, has the meaning given the term ``net
worth'' under section 702.2 of title 12, Code of
Federal Regulations, as in effect on January 1, 2015.
(13) Traditional banking organization.--The term
``traditional banking organization'' means a banking
organization that--
(A) has zero trading assets and zero trading
liabilities;
(B) does not engage in swaps or security-based
swaps, other than swaps or security-based swaps
referencing interest rates or foreign exchange swaps;
and
(C) has a total notional exposure of swaps and
security-based swaps of not more than $8,000,000,000.
(14) Other banking terms.--The terms ``insured depository
institution'' and ``depository institution holding company''
have the meaning given those terms, respectively, under section
3 of the Federal Deposit Insurance Act.
(15) Other capital terms.--With respect to a banking
organization, the terms ``additional tier 1 capital'' and
``common equity tier 1 capital'' have the meaning given such
terms, respectively, under section 3.20, 217.20, or 324.20 of
title 12, Code of Federal Regulations, as applicable, as in
effect on January 1, 2015.
TITLE II--ENDING ``TOO BIG TO FAIL'' AND BANK BAILOUTS
Subtitle A--Reform of the Financial Stability Act of 2010
SEC. 211. REPEAL AND MODIFICATION OF PROVISIONS OF THE FINANCIAL
STABILITY ACT OF 2010.
(a) Repeals.--The following provisions of the Financial Stability
Act of 2010 are repealed, and the provisions of law amended or repealed
by such provisions are restored or revived as if such provisions had
not been enacted:
(1) Subtitle B.
(2) Section 113.
(3) Section 114.
(4) Section 115.
(5) Section 116.
(6) Section 117.
(7) Section 119.
(8) Section 120.
(9) Section 121.
(10) Section 161.
(11) Section 162.
(12) Section 164.
(13) Section 166.
(14) Section 167.
(15) Section 168.
(16) Section 170.
(17) Section 172.
(18) Section 174.
(19) Section 175.
(b) Additional Modifications.--The Financial Stability Act of 2010
(12 U.S.C. 5311 et seq.) is amended--
(1) in section 102(a), by striking paragraph (5);
(2) in section 111--
(A) in subsection (b)--
(i) in paragraph (1)--
(I) by striking ``who shall each''
and inserting ``who shall, except as
provided below, each''; and
(II) by amending subparagraphs (B)
through (I) to read as follows:
``(B) each member of the Board of Governors, who
shall collectively have 1 vote on the Council;
``(C) each member of the Board of Directors of the
Office of the Comptroller of the Currency, who shall
collectively have 1 vote on the Council;
``(D) each member of the Consumer Financial
Opportunity Commission, who shall collectively have 1
vote on the Council;
``(E) each member of the Commission, who shall
collectively have 1 vote on the Council;
``(F) each member of the Corporation, who shall
collectively have 1 vote on the Council;
``(G) each member of the Commodity Futures Trading
Commission, who shall collectively have 1 vote on the
Council;
``(H) each member of the Board of Directors of the
Federal Housing Finance Agency, who shall collectively
have 1 vote on the Council
``(I) each member of the National Credit Union
Administration Board, who shall collectively have 1
vote on the Council;'';
(ii) in paragraph (2)--
(I) by striking subparagraph (A);
and
(II) by redesignating subparagraphs
(B), (C), (D), and (E) as subparagraphs
(A), (B), (C), and (D), respectively;
and
(iii) by adding at the end the following:
``(4) Voting by multi-person entity.--
``(A) Voting within the entity.--An entity
described under subparagraph (B) through (I) of
paragraph (1) shall determine the entity's Council vote
by using the voting process normally applicable to
votes by the entity's members.
``(B) Casting of entity vote.--The 1 collective
Council vote of an entity described under subparagraph
(A) shall be cast by the head of such agency or, in the
event such head is unable to cast such vote, the next
most senior member of the entity available.'';
(B) in subsection (c), by striking ``subparagraphs
(C), (D), and (E)'' and inserting ``subparagraphs (B),
(C), and (D)'';
(C) in subsection (e), by adding at the end the
following:
``(3) Staff access.--Any member of the Council may select
to have one or more individuals on the member's staff attend a
meeting of the Council, including any meeting of
representatives of the member agencies other than the members
themselves.
``(4) Congressional oversight.--All meetings of the
Council, whether or not open to the public, shall be open to
the attendance by members of the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate.
``(5) Member agency meetings.--Any meeting of
representatives of the member agencies other than the members
themselves shall be open to attendance by staff of the
Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the
Senate.'';
(D) by striking subsection (g) (relating to the
nonapplicability of FACA); and
(E) by inserting after subsection (f) the
following:
``(g) Open Meeting Requirement.--The Council shall be an agency for
purposes of section 552b of title 5, United States Code (commonly
referred to as the `Government in the Sunshine Act').
``(h) Confidential Congressional Briefings.--At the request of the
Chairman of the Committee on Financial Services of the House of
Representatives or the Chairman of the Committee on Banking, Housing,
and Urban Affairs of the Senate, the Chairperson shall appear before
Congress to provide a confidential briefing.'';
(3) in section 112--
(A) in subsection (a)(2)--
(i) in subparagraph (A), by striking
``direct the Office of Financial Research to'';
(ii) by striking subparagraphs (B), (H),
(I), and (J);
(iii) by redesignating subparagraphs (C),
(D), (E), (F), (G), (K), (L), (M), and (N) as
subparagraphs (B), (C), (D), (E), (F), (G),
(H), (I), and (J), respectively;
(iv) in subparagraph (J), as so
redesignated--
(I) in clause (iii), by adding
``and'' at the end; and
(II) by striking clauses (iv) and
(v);
(B) in subsection (d)--
(i) in paragraph (1), by striking ``the
Office of Financial Research, member agencies,
and'' and inserting ``member agencies and'';
(ii) in paragraph (2), by striking ``the
Office of Financial Research, any member
agency, and'' and inserting ``any member agency
and'';
(iii) in paragraph (3)--
(I) by striking ``, acting through
the Office of Financial Research,''
each place it appears; and
(II) in subparagraph (B), by
striking ``the Office of Financial
Research or''; and
(iv) in paragraph (5)(A), by striking ``,
the Office of Financial Research,'';
(4) by amending section 118 to read as follows:
``SEC. 118. COUNCIL FUNDING.
``There is authorized to be appropriated to the Council $4,000,000
for fiscal year 2017 and each fiscal year thereafter to carry out the
duties of the Council.'';
(5) in section 163(b)(4)--
(A) by striking ``In addition'' and inserting the
following:
``(A) In general.--In addition''; and
(B) by adding at the end the following:
``(B) Exception for qualifying banking
organization.--Subparagraph (A) shall not apply to a
proposed acquisition by a qualifying banking
organization, as defined under section 105 of the
Financial CHOICE Act of 2016.''; and
(6) in section 165--
(A) by striking ``nonbank financial companies
supervised by the Board of Governors and'' each place
such term appears;
(B) by striking ``nonbank financial company
supervised by the Board of Governors and'' each place
such term appears;
(C) in subsection (a), by amending paragraph (2) to
read as follows:
``(2) Tailored application.--In prescribing more stringent
prudential standards under this section, the Board of Governors
may differentiate among companies on an individual basis or by
category, taking into consideration their capital structure,
riskiness, complexity, financial activities (including the
financial activities of their subsidiaries), size, and any
other risk-related factors that the Board of Governors deems
appropriate.'';
(D) in subsection (b)--
(i) in paragraph (1)(B)(iv), by striking
``, on its own or pursuant to a recommendation
made by the Council in accordance with section
115,'';
(ii) in paragraph (2)--
(I) by striking ``foreign nonbank
financial company supervised by the
Board of Governors or'';
(II) by striking ``shall--'' and
all that follows through ``give due''
and inserting ``shall give due'';
(III) in subparagraph (A), by
striking ``; and'' and inserting a
period; and
(IV) by striking subparagraph (B);
(iii) in paragraph (3)--
(I) in subparagraph (A)--
(aa) by striking clause
(i);
(bb) by redesignating
clauses (ii), (iii), and (iv)
as clauses (i), (ii), and
(iii), respectively; and
(cc) in clause (iii), as so
redesignated, by adding ``and''
at the end;
(II) by striking subparagraphs (B)
and (C); and
(III) by redesignating subparagraph
(D) as subparagraph (B); and
(iv) in paragraph (4), by striking ``a
nonbank financial company supervised by the
Board of Governors or'';
(E) in subsection (c)--
(i) in paragraph (1), by striking ``under
section 115(c)''; and
(ii) in paragraph (2)--
(I) by amending subparagraph (A) to
read as follows:
``(A) any recommendations of the Council;''; and
(II) in subparagraph (D), by
striking ``nonbank financial company
supervised by the Board of Governors
or'';
(F) in subsection (d)--
(i) by striking ``a nonbank financial
company supervised by the Board of Governors
or'' each place such term appears;
(ii) in paragraph (1), by striking
``periodically'' and inserting ``not more often
than every 2 years'';
(iii) in paragraph (3)--
(I) by striking ``The Board'' and
inserting the following:
``(A) In general.--The Board'';
(II) by striking ``shall review''
and inserting the following: ``shall--
``(i) review'';
(III) by striking the period and
inserting ``; and''; and
(IV) by adding at the end the
following:
``(ii) not later than the end of the 6-
month period beginning on the date the bank
holding company submits the resolution plan,
provide feedback to the bank holding company on
such plan.
``(B) Disclosure of assessment framework.--The
Board of Governors and the Corporation shall each
publicly disclose the assessment framework that is used
to review information under this paragraph and shall
provide the public with a notice and comment period
before finalizing such assessment framework.''.
(iv) in paragraph (6), by striking
``nonbank financial company supervised by the
Board, any bank holding company,'' and
inserting ``bank holding company'';
(G) in subsection (e)--
(i) in paragraph (1), by striking ``a
nonbank financial company supervised by the
Board of Governors or'';
(ii) in paragraph (3), by striking
``nonbank financial company supervised by the
Board of Governors or'' each place such term
appears; and
(iii) in paragraph (4), by striking ``a
nonbank financial company supervised by the
Board of Governors or'';
(H) in subsection (g)(1), by striking ``and any
nonbank financial company supervised by the Board of
Governors'';
(I) in subsection (h)--
(i) by striking paragraph (1);
(ii) by redesignating paragraphs (2), (3),
and (4) as paragraphs (1), (2), and (3),
respectively;
(iii) in paragraph (1), as so redesignated,
by striking ``paragraph (3)'' each place such
term appears and inserting ``paragraph (2)'';
and
(iv) in paragraph (2), as so redesignated,
by striking ``nonbank financial company
supervised by the Board of Governors or'' each
place such term appears;
(J) in subsection (i)--
(i) in paragraph (1)--
(I) in subparagraph (B)--
(aa) by amending clause (i)
to read as follows:
``(i) shall--
``(I) issue regulations, after
providing for public notice and
comment, that provide for at least 3
different sets of conditions under
which the evaluation required by this
subsection shall be conducted,
including baseline, adverse, and
severely adverse, and methodologies,
including models used to estimate
losses on certain assets; and
``(II) provide copies of such
regulations to the Comptroller General
of the United States and the Panel of
Economic Advisors of the Congressional
Budget Office before publishing such
regulations;'';
(bb) in clause (ii), by
striking ``and nonbank
financial companies''; and
(cc) in clause (v), by
inserting before the period the
following: ``, including any
results of a resubmitted
test''; and
(II) by adding at the end the
following:
``(C) Application to ccar.--The requirements of
subparagraph (B) shall apply to all stress tests
performed under the Comprehensive Capital Analysis and
Review exercise established by the Board of
Governors.''; and
(ii) in paragraph (2)(A)--
(I) by striking ``a bank holding
company'' and inserting ``bank holding
company''; and
(II) by striking ``All other
financial companies'' and inserting
``All other bank holding companies'';
(K) in subsection (j)--
(i) in paragraph (1), by striking ``or a
nonbank financial company supervised by the
Board of Governors''; and
(ii) in paragraph (2), by striking ``the
factors described in subsections (a) and (b) of
section 113 and any other'' and inserting
``any'';
(L) in subsection (k)(1), by striking ``or nonbank
financial company supervised by the Board of
Governors''; and
(M) by adding at the end the following:
``(l) Exemption for Qualifying Banking Organizations.--This section
shall not apply to a proposed acquisition by a qualifying banking
organization, as defined under section 105 of the Financial CHOICE Act
of 2016.''.
(c) Actions to Create a Bank Holding Company.--Section 3(b)(1) of
the Bank Holding Company Act of 1956 (12 U.S.C. 1842(b)(1)) is
amended--
(1) by striking ``Upon receiving'' and inserting the
following:
``(A) In general.--Upon receiving'';
(2) by striking ``Notwithstanding any other provision'' and
inserting the following:
``(B) Immediate action.--
``(i) In general.--Notwithstanding any
other provision''; and
(3) by adding at the end the following:
``(ii) Exception.--The Board may not take
any action pursuant to clause (i) on an
application that would cause any company to
become a bank holding company unless such
application involves the company acquiring a
bank that is critically undercapitalized (as
such term is defined under section 38(b) of the
Federal Deposit Insurance Act).''.
(d) Concentration Limits Applied Only to Banking Organizations.--
Section 14 of the Bank Holding Company Act of 1956 (12 U.S.C. 1852) is
amended--
(1) by striking ``financial company'' each place such term
appears and inserting ``banking organization'';
(2) in subsection (a)--
(A) by amending paragraph (2) to read as follows:
``(2) the term `banking organization' means--
``(A) an insured depository institution;
``(B) a bank holding company;
``(C) a savings and loan holding company;
``(D) a company that controls an insured depository
institution; and
``(E) a foreign bank or company that is treated as
a bank holding company for purposes of this Act; and'';
(B) in paragraph (3)--
(i) in subparagraph (A)(ii), by adding
``and'' at the end;
(ii) in subparagraph (B)(ii), by striking
``; and'' and inserting a period; and
(iii) by striking subparagraph (C); and
(3) in subsection (b), by striking ``financial companies''
and inserting ``banking organizations''.
(e) Conforming Amendment.--Section 3502(5) of title 44, United
States Code, is amended by striking ``the Office of Financial
Research,''.
(f) Clerical Amendment.--The table of contents under section 1(b)
of the Dodd-Frank Wall Street Reform and Consumer Protection Act is
amended by striking the items relating to subtitle B of title I and
113, 114, 115, 116, 117, 119, 120, 121, 161, 162, 164, 166, 167, 168,
170, 172, 174, and 175.
Subtitle B--Repeal of the Orderly Liquidation Authority
SEC. 221. REPEAL OF THE ORDERLY LIQUIDATION AUTHORITY.
(a) In General.--Title II of the Dodd-Frank Wall Street Reform and
Consumer Protection Act is hereby repealed and any Federal law amended
by such title shall, on and after the effective date of this Act, be
effective as if title II of the Dodd-Frank Wall Street Reform and
Consumer Protection Act had not been enacted.
(b) Conforming Amendments.--
(1) Dodd-frank wall street reform and consumer protection
act.--The Dodd-Frank Wall Street Reform and Consumer Protection
Act is amended--
(A) in the table of contents for such Act, by
striking all items relating to title II;
(B) in section 151, by amending paragraph (2) to
read as follows:
``(2) the term `financial company' means--
``(A) any company that is incorporated or organized
under any provision of Federal law or the laws of any
State;
``(B) any company that 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) a nonbank financial company
supervised by the Board of Governors;
``(iii) any company that is predominantly
engaged in activities that the Board of
Governors has determined are financial in
nature or incidental thereto for purposes of
section 4(k) of the Bank Holding Company Act of
1956 (12 U.S.C. 1843(k)) other than a company
described in clause (i) or (ii); or
``(iv) any subsidiary of any company
described in any of clauses (i) through (iii)
that is predominantly engaged in activities
that the Board of Governors has determined are
financial in nature or incidental thereto for
purposes of section 4(k) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1843(k)) (other
than a subsidiary that is an insured depository
institution or an insurance company);
``(C) any company that is not a Farm Credit System
institution chartered under and subject to the
provisions of the Farm Credit Act of 1971, as amended
(12 U.S.C. 2001 et seq.), a governmental entity, or a
regulated entity, as defined under section 1303(20) of
the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4502(20)); and
``(D) includes an insured depository institution
and an insurance company;'';
(C) in section 165(d)(6), by striking ``, a
receiver appointed under title II,''; and
(D) in section 716(g), by striking ``or a covered
financial company under title II''.
(2) Federal deposit insurance act.--Section 10(b)(3) of the
Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)) is amended
by striking ``, or of such nonbank financial company supervised
by the Board of Governors or bank holding company described in
section 165(a) of the Financial Stability Act of 2010, for the
purpose of implementing its authority to provide for orderly
liquidation of any such company under title II of that Act''.
(3) Federal reserve act.--Section 13(3) of the Federal
Reserve Act is amended--
(A) in subparagraph (B)--
(i) in clause (ii), by striking ``,
resolution under title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act,
or'' and inserting ``or is subject to
resolution under''; and
(ii) in clause (iii), by striking ``,
resolution under title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act,
or'' and inserting ``or resolution under''; and
(B) by striking subparagraph (E).
Subtitle C--Financial Institution Bankruptcy
SEC. 231. GENERAL PROVISIONS RELATING TO COVERED FINANCIAL
CORPORATIONS.
(a) Definition.--Section 101 of title 11, United States Code, is
amended by inserting the following after paragraph (9):
``(9A) The term `covered financial corporation' means any
corporation incorporated or organized under any Federal or
State law, other than a stockbroker, a commodity broker, or an
entity of the kind specified in paragraph (2) or (3) of section
109(b), that is--
``(A) a bank holding company, as defined in section
2(a) of the Bank Holding Company Act of 1956; or
``(B) a corporation that exists for the primary
purpose of owning, controlling and financing its
subsidiaries, that has total consolidated assets of
$50,000,000,000 or greater, and for which, in its most
recently completed fiscal year--
``(i) annual gross revenues derived by the
corporation and all of its subsidiaries from
activities that are financial in nature (as
defined in section 4(k) of the Bank Holding
Company Act of 1956) and, if applicable, from
the ownership or control of one or more insured
depository institutions, represents 85 percent
or more of the consolidated annual gross
revenues of the corporation; or
``(ii) the consolidated assets of the
corporation and all of its subsidiaries related
to activities that are financial in nature (as
defined in section 4(k) of the Bank Holding
Company Act of 1956) and, if applicable,
related to the ownership or control of one or
more insured depository institutions,
represents 85 percent or more of the
consolidated assets of the corporation.''.
(b) Applicability of Chapters.--Section 103 of title 11, United
States Code, is amended by adding at the end the following:
``(l) Subchapter V of chapter 11 of this title applies only in a
case under chapter 11 concerning a covered financial corporation.''.
(c) Who May Be a Debtor.--Section 109 of title 11, United States
Code, is amended--
(1) in subsection (b)--
(A) in paragraph (2), by striking ``or'' at the
end;
(B) in paragraph (3)(B), by striking the period at
the end and inserting ``; or''; and
(C) by adding at the end the following:
``(4) a covered financial corporation.''; and
(2) in subsection (d)--
(A) by striking ``and'' before ``an uninsured State
member bank'';
(B) by striking ``or'' before ``a corporation'';
and
(C) by inserting ``, or a covered financial
corporation'' after ``Federal Deposit Insurance
Corporation Improvement Act of 1991''.
(d) Conversion to Chapter 7.--Section 1112 of title 11, United
States Code, is amended by adding at the end the following:
``(g) Notwithstanding section 109(b), the court may convert a case
under subchapter V to a case under chapter 7 if--
``(1) a transfer approved under section 1185 has been
consummated;
``(2) the court has ordered the appointment of a special
trustee under section 1186; and
``(3) the court finds, after notice and a hearing, that
conversion is in the best interest of the creditors and the
estate.''.
(e)(1) Section 726(a)(1) of title 11, United States Code, is
amended by inserting after ``first,'' the following: ``in payment of
any unpaid fees, costs, and expenses of a special trustee appointed
under section 1186, and then''.
(2) Section 1129(a) of title 11, United States Code, is amended by
inserting after paragraph (16) the following:
``(17) In a case under subchapter V, all payable fees,
costs, and expenses of the special trustee have been paid or
the plan provides for the payment of all such fees, costs, and
expenses on the effective date of the plan.
``(18) In a case under subchapter V, confirmation of the
plan is not likely to cause serious adverse effects on
financial stability in the United States.''.
(f) Section 322(b)(2) of title 11, United States Code, is amended
by striking ``The'' and inserting ``In cases under subchapter V, the
United States trustee shall recommend to the court, and in all other
cases, the''.
SEC. 232. LIQUIDATION, REORGANIZATION, OR RECAPITALIZATION OF A COVERED
FINANCIAL CORPORATION.
Chapter 11 of title 11, United States Code, is amended by adding at
the end the following:
``SUBCHAPTER V--LIQUIDATION, REORGANIZATION, OR RECAPITALIZATION OF A
COVERED FINANCIAL CORPORATION
``Sec. 1181. Inapplicability of other sections
``Sections 303 and 321(c) do not apply in a case under this
subchapter concerning a covered financial corporation. Section 365 does
not apply to a transfer under section 1185, 1187, or 1188.
``Sec. 1182. Definitions for this subchapter
``In this subchapter, the following definitions shall apply:
``(1) The term `Board' means the Board of Governors of the
Federal Reserve System.
``(2) The term `bridge company' means a newly formed
corporation to which property of the estate may be transferred
under section 1185(a) and the equity securities of which may be
transferred to a special trustee under section 1186(a).
``(3) The term `capital structure debt' means all unsecured
debt of the debtor for borrowed money for which the debtor is
the primary obligor, other than a qualified financial contract
and other than debt secured by a lien on property of the estate
that is to be transferred to a bridge company pursuant to an
order of the court under section 1185(a).
``(4) The term `contractual right' means a contractual
right of a kind defined in section 555, 556, 559, 560, or 561.
``(5) The term `qualified financial contract' means any
contract of a kind defined in paragraph (25), (38A), (47), or
(53B) of section 101, section 741(7), or paragraph (4), (5),
(11), or (13) of section 761.
``(6) The term `special trustee' means the trustee of a
trust formed under section 1186(a)(1).
``Sec. 1183. Commencement of a case concerning a covered financial
corporation
``(a) A case under this subchapter concerning a covered financial
corporation may be commenced by the filing of a petition with the court
by the debtor under section 301 only if the debtor states to the best
of its knowledge under penalty of perjury in the petition that it is a
covered financial corporation.
``(b) The commencement of a case under subsection (a) constitutes
an order for relief under this subchapter.
``(c) The members of the board of directors (or body performing
similar functions) of a covered financial company shall have no
liability to shareholders, creditors, or other parties in interest for
a good faith filing of a petition to commence a case under this
subchapter, or for any reasonable action taken in good faith in
contemplation of or in connection with such a petition or a transfer
under section 1185 or section 1186, whether prior to or after
commencement of the case.
``(d) Counsel to the debtor shall provide, to the greatest extent
practicable without disclosing the identity of the potential debtor,
sufficient confidential notice to the chief judge of the court of
appeals for the circuit embracing the district in which such counsel
intends to file a petition to commence a case under this subchapter
regarding the potential commencement of such case. The chief judge of
such court shall randomly assign to preside over such case a bankruptcy
judge selected from among the bankruptcy judges designated by the Chief
Justice of the United States under section 298 of title 28.
``Sec. 1184. Regulators
``The Board, the Securities Exchange Commission, the Office of the
Comptroller of the Currency of the Department of the Treasury, the
Commodity Futures Trading Commission, and the Federal Deposit Insurance
Corporation may raise and may appear and be heard on any issue in any
case or proceeding under this subchapter.
``Sec. 1185. Special transfer of property of the estate
``(a) On request of the trustee, and after notice and a hearing
that shall occur not less than 24 hours after the order for relief, the
court may order a transfer under this section of property of the
estate, and the assignment of executory contracts, unexpired leases,
and qualified financial contracts of the debtor, to a bridge company.
Upon the entry of an order approving such transfer, any property
transferred, and any executory contracts, unexpired leases, and
qualified financial contracts assigned under such order shall no longer
be property of the estate. Except as provided under this section, the
provisions of section 363 shall apply to a transfer and assignment
under this section.
``(b) Unless the court orders otherwise, notice of a request for an
order under subsection (a) shall consist of electronic or telephonic
notice of not less than 24 hours to--
``(1) the debtor;
``(2) the holders of the 20 largest secured claims against
the debtor;
``(3) the holders of the 20 largest unsecured claims
against the debtor;
``(4) counterparties to any debt, executory contract,
unexpired lease, and qualified financial contract requested to
be transferred under this section;
``(5) the Board;
``(6) the Federal Deposit Insurance Corporation;
``(7) the Secretary of the Treasury and the Office of the
Comptroller of the Currency of the Treasury;
``(8) the Commodity Futures Trading Commission;
``(9) the Securities and Exchange Commission;
``(10) the United States trustee or bankruptcy
administrator; and
``(11) each primary financial regulatory agency, as defined
in section 2(12) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, with respect to any affiliate the
equity securities of which are proposed to be transferred under
this section.
``(c) The court may not order a transfer under this section unless
the court determines, based upon a preponderance of the evidence,
that--
``(1) the transfer under this section is necessary to
prevent serious adverse effects on financial stability in the
United States;
``(2) the transfer does not provide for the assumption of
any capital structure debt by the bridge company;
``(3) the transfer does not provide for the transfer to the
bridge company of any property of the estate that is subject to
a lien securing a debt, executory contract, unexpired lease or
agreement (including a qualified financial contract) of the
debtor unless--
``(A)(i) the bridge company assumes such debt,
executory contract, unexpired lease or agreement
(including a qualified financial contract), including
any claims arising in respect thereof that would not be
allowed secured claims under section 506(a)(1) and
after giving effect to such transfer, such property
remains subject to the lien securing such debt,
executory contract, unexpired lease or agreement
(including a qualified financial contract); and
``(ii) the court has determined that assumption of
such debt, executory contract, unexpired lease or
agreement (including a qualified financial contract) by
the bridge company is in the best interests of the
estate; or
``(B) such property is being transferred to the
bridge company in accordance with the provisions of
section 363;
``(4) the transfer does not provide for the assumption by
the bridge company of any debt, executory contract, unexpired
lease or agreement (including a qualified financial contract)
of the debtor secured by a lien on property of the estate
unless the transfer provides for such property to be
transferred to the bridge company in accordance with paragraph
(3)(A) of this subsection;
``(5) the transfer does not provide for the transfer of the
equity of the debtor;
``(6) the trustee has demonstrated that the bridge company
is not likely to fail to meet the obligations of any debt,
executory contract, qualified financial contract, or unexpired
lease assumed and assigned to the bridge company;
``(7) the transfer provides for the transfer to a special
trustee all of the equity securities in the bridge company and
appointment of a special trustee in accordance with section
1186;
``(8) after giving effect to the transfer, adequate
provision has been made for the fees, costs, and expenses of
the estate and special trustee; and
``(9) the bridge company will have governing documents, and
initial directors and senior officers, that are in the best
interest of creditors and the estate.
``(d) Immediately before a transfer under this section, the bridge
company that is the recipient of the transfer shall--
``(1) not have any property, executory contracts, unexpired
leases, qualified financial contracts, or debts, other than any
property acquired or executory contracts, unexpired leases, or
debts assumed when acting as a transferee of a transfer under
this section; and
``(2) have equity securities that are property of the
estate, which may be sold or distributed in accordance with
this title.
``Sec. 1186. Special trustee
``(a)(1) An order approving a transfer under section 1185 shall
require the trustee to transfer to a qualified and independent special
trustee, who is appointed by the court, all of the equity securities in
the bridge company that is the recipient of a transfer under section
1185 to hold in trust for the sole benefit of the estate, subject to
satisfaction of the special trustee's fees, costs, and expenses. The
trust of which the special trustee is the trustee shall be a newly
formed trust governed by a trust agreement approved by the court as in
the best interests of the estate, and shall exist for the sole purpose
of holding and administering, and shall be permitted to dispose of, the
equity securities of the bridge company in accordance with the trust
agreement.
``(2) In connection with the hearing to approve a transfer under
section 1185, the trustee shall confirm to the court that the Board has
been consulted regarding the identity of the proposed special trustee
and advise the court of the results of such consultation.
``(b) The trust agreement governing the trust shall provide--
``(1) for the payment of the fees, costs, expenses, and
indemnities of the special trustee from the assets of the
debtor's estate;
``(2) that the special trustee provide--
``(A) quarterly reporting to the estate, which
shall be filed with the court; and
``(B) information about the bridge company
reasonably requested by a party in interest to prepare
a disclosure statement for a plan providing for
distribution of any securities of the bridge company if
such information is necessary to prepare such
disclosure statement;
``(3) that for as long as the equity securities of the
bridge company are held by the trust, the special trustee shall
file a notice with the court in connection with--
``(A) any change in a director or senior officer of
the bridge company;
``(B) any modification to the governing documents
of the bridge company; and
``(C) any material corporate action of the bridge
company, including--
``(i) recapitalization;
``(ii) a material borrowing;
``(iii) termination of an intercompany debt
or guarantee;
``(iv) a transfer of a substantial portion
of the assets of the bridge company; or
``(v) the issuance or sale of any
securities of the bridge company;
``(4) that any sale of any equity securities of the bridge
company shall not be consummated until the special trustee
consults with the Federal Deposit Insurance Corporation and the
Board regarding such sale and discloses the results of such
consultation with the court;
``(5) that, subject to reserves for payments permitted
under paragraph (1) provided for in the trust agreement, the
proceeds of the sale of any equity securities of the bridge
company by the special trustee be held in trust for the benefit
of or transferred to the estate;
``(6) the process and guidelines for the replacement of the
special trustee; and
``(7) that the property held in trust by the special
trustee is subject to distribution in accordance with
subsection (c).
``(c)(1) The special trustee shall distribute the assets held in
trust--
``(A) if the court confirms a plan in the case, in
accordance with the plan on the effective date of the plan; or
``(B) if the case is converted to a case under chapter 7,
as ordered by the court.
``(2) As soon as practicable after a final distribution under
paragraph (1), the office of the special trustee shall terminate,
except as may be necessary to wind up and conclude the business and
financial affairs of the trust.
``(d) After a transfer to the special trustee under this section,
the special trustee shall be subject only to applicable nonbankruptcy
law, and the actions and conduct of the special trustee shall no longer
be subject to approval by the court in the case under this subchapter.
``Sec. 1187. Temporary and supplemental automatic stay; assumed debt
``(a)(1) A petition filed under section 1183 operates as a stay,
applicable to all entities, of the termination, acceleration, or
modification of any debt, contract, lease, or agreement of the kind
described in paragraph (2), or of any right or obligation under any
such debt, contract, lease, or agreement, solely because of--
``(A) a default by the debtor under any such debt,
contract, lease, or agreement; or
``(B) a provision in such debt, contract, lease, or
agreement, or in applicable nonbankruptcy law, that is
conditioned on--
``(i) the insolvency or financial condition of the
debtor at any time before the closing of the case;
``(ii) the commencement of a case under this title
concerning the debtor;
``(iii) the appointment of or taking possession by
a trustee in a case under this title concerning the
debtor or by a custodian before the commencement of the
case; or
``(iv) a credit rating agency rating, or absence or
withdrawal of a credit rating agency rating--
``(I) of the debtor at any time after the
commencement of the case;
``(II) of an affiliate during the period
from the commencement of the case until 48
hours after such order is entered;
``(III) of the bridge company while the
trustee or the special trustee is a direct or
indirect beneficial holder of more than 50
percent of the equity securities of--
``(aa) the bridge company; or
``(bb) the affiliate, if all of the
direct or indirect interests in the
affiliate that are property of the
estate are transferred under section
1185; or
``(IV) of an affiliate while the trustee or
the special trustee is a direct or indirect
beneficial holder of more than 50 percent of
the equity securities of--
``(aa) the bridge company; or
``(bb) the affiliate, if all of the
direct or indirect interests in the
affiliate that are property of the
estate are transferred under section
1185.
``(2) A debt, contract, lease, or agreement described in this
paragraph is--
``(A) any debt (other than capital structure debt),
executory contract, or unexpired lease of the debtor (other
than a qualified financial contract);
``(B) any agreement under which the debtor issued or is
obligated for debt (other than capital structure debt);
``(C) any debt, executory contract, or unexpired lease of
an affiliate (other than a qualified financial contract); or
``(D) any agreement under which an affiliate issued or is
obligated for debt.
``(3) The stay under this subsection terminates--
``(A) for the benefit of the debtor, upon the earliest of--
``(i) 48 hours after the commencement of the case;
``(ii) assumption of the debt, contract, lease, or
agreement by the bridge company under an order
authorizing a transfer under section 1185;
``(iii) a final order of the court denying the
request for a transfer under section 1185; or
``(iv) the time the case is dismissed; and
``(B) for the benefit of an affiliate, upon the earliest
of--
``(i) the entry of an order authorizing a transfer
under section 1185 in which the direct or indirect
interests in the affiliate that are property of the
estate are not transferred under section 1185;
``(ii) a final order by the court denying the
request for a transfer under section 1185;
``(iii) 48 hours after the commencement of the case
if the court has not ordered a transfer under section
1185; or
``(iv) the time the case is dismissed.
``(4) Subsections (d), (e), (f), and (g) of section 362 apply to a
stay under this subsection.
``(b) A debt, executory contract (other than a qualified financial
contract), or unexpired lease of the debtor, or an agreement under
which the debtor has issued or is obligated for any debt, may be
assumed by a bridge company in a transfer under section 1185
notwithstanding any provision in an agreement or in applicable
nonbankruptcy law that--
``(1) prohibits, restricts, or conditions the assignment of
the debt, contract, lease, or agreement; or
``(2) accelerates, terminates, or modifies, or permits a
party other than the debtor to terminate or modify, the debt,
contract, lease, or agreement on account of--
``(A) the assignment of the debt, contract, lease,
or agreement; or
``(B) a change in control of any party to the debt,
contract, lease, or agreement.
``(c)(1) A debt, contract, lease, or agreement of the kind
described in subparagraph (A) or (B) of subsection (a)(2) may not be
accelerated, terminated, or modified, and any right or obligation under
such debt, contract, lease, or agreement may not be accelerated,
terminated, or modified, as to the bridge company solely because of a
provision in the debt, contract, lease, or agreement or in applicable
nonbankruptcy law--
``(A) of the kind described in subsection (a)(1)(B) as
applied to the debtor;
``(B) that prohibits, restricts, or conditions the
assignment of the debt, contract, lease, or agreement; or
``(C) that accelerates, terminates, or modifies, or permits
a party other than the debtor to terminate or modify, the debt,
contract, lease or agreement on account of--
``(i) the assignment of the debt, contract, lease,
or agreement; or
``(ii) a change in control of any party to the
debt, contract, lease, or agreement.
``(2) If there is a default by the debtor under a provision other
than the kind described in paragraph (1) in a debt, contract, lease or
agreement of the kind described in subparagraph (A) or (B) of
subsection (a)(2), the bridge company may assume such debt, contract,
lease, or agreement only if the bridge company--
``(A) shall cure the default;
``(B) compensates, or provides adequate assurance in
connection with a transfer under section 1185 that the bridge
company will promptly compensate, a party other than the debtor
to the debt, contract, lease, or agreement, for any actual
pecuniary loss to the party resulting from the default; and
``(C) provides adequate assurance in connection with a
transfer under section 1185 of future performance under the
debt, contract, lease, or agreement, as determined by the court
under section 1185(c)(4).
``Sec. 1188. Treatment of qualified financial contracts and affiliate
contracts
``(a) Notwithstanding sections 362(b)(6), 362(b)(7), 362(b)(17),
362(b)(27), 362(o), 555, 556, 559, 560, and 561, a petition filed under
section 1183 operates as a stay, during the period specified in section
1187(a)(3)(A), applicable to all entities, of the exercise of a
contractual right--
``(1) to cause the modification, liquidation, termination,
or acceleration of a qualified financial contract of the debtor
or an affiliate;
``(2) to offset or net out any termination value, payment
amount, or other transfer obligation arising under or in
connection with a qualified financial contract of the debtor or
an affiliate; or
``(3) under any security agreement or arrangement or other
credit enhancement forming a part of or related to a qualified
financial contract of the debtor or an affiliate.
``(b)(1) During the period specified in section 1187(a)(3)(A), the
trustee or the affiliate shall perform all payment and delivery
obligations under such qualified financial contract of the debtor or
the affiliate, as the case may be, that become due after the
commencement of the case. The stay provided under subsection (a)
terminates as to a qualified financial contract of the debtor or an
affiliate immediately upon the failure of the trustee or the affiliate,
as the case may be, to perform any such obligation during such period.
``(2) Any failure by a counterparty to any qualified financial
contract of the debtor or any affiliate to perform any payment or
delivery obligation under such qualified financial contract, including
during the pendency of the stay provided under subsection (a), shall
constitute a breach of such qualified financial contract by the
counterparty.
``(c) Subject to the court's approval, a qualified financial
contract between an entity and the debtor may be assigned to or assumed
by the bridge company in a transfer under, and in accordance with,
section 1185 if and only if--
``(1) all qualified financial contracts between the entity
and the debtor are assigned to and assumed by the bridge
company in the transfer under section 1185;
``(2) all claims of the entity against the debtor in
respect of any qualified financial contract between the entity
and the debtor (other than any claim that, under the terms of
the qualified financial contract, is subordinated to the claims
of general unsecured creditors) are assigned to and assumed by
the bridge company;
``(3) all claims of the debtor against the entity under any
qualified financial contract between the entity and the debtor
are assigned to and assumed by the bridge company; and
``(4) all property securing or any other credit enhancement
furnished by the debtor for any qualified financial contract
described in paragraph (1) or any claim described in paragraph
(2) or (3) under any qualified financial contract between the
entity and the debtor is assigned to and assumed by the bridge
company.
``(d) Notwithstanding any provision of a qualified financial
contract or of applicable nonbankruptcy law, a qualified financial
contract of the debtor that is assumed or assigned in a transfer under
section 1185 may not be accelerated, terminated, or modified, after the
entry of the order approving a transfer under section 1185, and any
right or obligation under the qualified financial contract may not be
accelerated, terminated, or modified, after the entry of the order
approving a transfer under section 1185 solely because of a condition
described in section 1187(c)(1), other than a condition of the kind
specified in section 1187(b) that occurs after property of the estate
no longer includes a direct beneficial interest or an indirect
beneficial interest through the special trustee, in more than 50
percent of the equity securities of the bridge company.
``(e) Notwithstanding any provision of any agreement or in
applicable nonbankruptcy law, an agreement of an affiliate (including
an executory contract, an unexpired lease, qualified financial
contract, or an agreement under which the affiliate issued or is
obligated for debt) and any right or obligation under such agreement
may not be accelerated, terminated, or modified, solely because of a
condition described in section 1187(c)(1), other than a condition of
the kind specified in section 1187(b) that occurs after the bridge
company is no longer a direct or indirect beneficial holder of more
than 50 percent of the equity securities of the affiliate, at any time
after the commencement of the case if--
``(1) all direct or indirect interests in the affiliate
that are property of the estate are transferred under section
1185 to the bridge company within the period specified in
subsection (a);
``(2) the bridge company assumes--
``(A) any guarantee or other credit enhancement
issued by the debtor relating to the agreement of the
affiliate; and
``(B) any obligations in respect of rights of
setoff, netting arrangement, or debt of the debtor that
directly arises out of or directly relates to the
guarantee or credit enhancement; and
``(3) any property of the estate that directly serves as
collateral for the guarantee or credit enhancement is
transferred to the bridge company.
``Sec. 1189. Licenses, permits, and registrations
``(a) Notwithstanding any otherwise applicable nonbankruptcy law,
if a request is made under section 1185 for a transfer of property of
the estate, any Federal, State, or local license, permit, or
registration that the debtor or an affiliate had immediately before the
commencement of the case and that is proposed to be transferred under
section 1185 may not be accelerated, terminated, or modified at any
time after the request solely on account of--
``(1) the insolvency or financial condition of the debtor
at any time before the closing of the case;
``(2) the commencement of a case under this title
concerning the debtor;
``(3) the appointment of or taking possession by a trustee
in a case under this title concerning the debtor or by a
custodian before the commencement of the case; or
``(4) a transfer under section 1185.
``(b) Notwithstanding any otherwise applicable nonbankruptcy law,
any Federal, State, or local license, permit, or registration that the
debtor had immediately before the commencement of the case that is
included in a transfer under section 1185 shall be valid and all rights
and obligations thereunder shall vest in the bridge company.
``Sec. 1190. Exemption from securities laws
``For purposes of section 1145, a security of the bridge company
shall be deemed to be a security of a successor to the debtor under a
plan if the court approves the disclosure statement for the plan as
providing adequate information (as defined in section 1125(a)) about
the bridge company and the security.
``Sec. 1191. Inapplicability of certain avoiding powers
``A transfer made or an obligation incurred by the debtor to an
affiliate prior to or after the commencement of the case, including any
obligation released by the debtor or the estate to or for the benefit
of an affiliate, in contemplation of or in connection with a transfer
under section 1185 is not avoidable under section 544, 547,
548(a)(1)(B), or 549, or under any similar nonbankruptcy law.
``Sec. 1192. Consideration of financial stability
``The court may consider the effect that any decision in connection
with this subchapter may have on financial stability in the United
States.''.
SEC. 233. AMENDMENTS TO TITLE 28, UNITED STATES CODE.
(a) Amendment to Chapter 13.--Chapter 13 of title 28, United States
Code, is amended by adding at the end the following:
``Sec. 298. Judge for a case under subchapter V of chapter 11 of title
11
``(a)(1) Notwithstanding section 295, the Chief Justice of the
United States shall designate not fewer than 10 bankruptcy judges to be
available to hear a case under subchapter V of chapter 11 of title 11.
Bankruptcy judges may request to be considered by the Chief Justice of
the United States for such designation.
``(2) Notwithstanding section 155, a case under subchapter V of
chapter 11 of title 11 shall be heard under section 157 by a bankruptcy
judge designated under paragraph (1), who shall be randomly assigned to
hear such case by the chief judge of the court of appeals for the
circuit embracing the district in which the case is pending. To the
greatest extent practicable, the approvals required under section 155
should be obtained.
``(3) If the bankruptcy judge assigned to hear a case under
paragraph (2) is not assigned to the district in which the case is
pending, the bankruptcy judge shall be temporarily assigned to the
district.
``(b) A case under subchapter V of chapter 11 of title 11, and all
proceedings in the case, shall take place in the district in which the
case is pending.
``(c) In this section, the term `covered financial corporation' has
the meaning given that term in section 101(9A) of title 11.''.
(b) Amendment to Section 1334 of Title 28.--Section 1334 of title
28, United States Code, is amended by adding at the end the following:
``(f) This section does not grant jurisdiction to the district
court after a transfer pursuant to an order under section 1185 of title
11 of any proceeding related to a special trustee appointed, or to a
bridge company formed, in connection with a case under subchapter V of
chapter 11 of title 11.''.
(c) Technical and Conforming Amendment.--The table of sections for
chapter 13 of title 28, United States Code, is amended by adding at the
end the following:
``298. Judge for a case under subchapter V of chapter 11 of title
11.''.
Subtitle D--Ending Government Guarantees
SEC. 241. REPEAL OF OBLIGATION GUARANTEE PROGRAM.
(a) In General.--The following sections of the Dodd-Frank Wall
Street Reform and Consumer Protection Act (12 U.S.C. 5301 et seq.) are
repealed:
(1) Section 1104.
(2) Section 1105.
(3) Section 1106.
(b) Clerical Amendment.--The table of contents under section 1(b)
of the Dodd-Frank Wall Street Reform and Consumer Protection Act is
amended by striking the items relating to sections 1104, 1105, and
1106.
SEC. 242. REPEAL OF SYSTEMIC RISK DETERMINATION IN RESOLUTIONS.
Section 13(c)(4)(G) of the Federal Deposit Insurance Act (12 U.S.C.
1823(c)(4)(G)) is hereby repealed.
SEC. 243. RESTRICTIONS ON USE OF THE EXCHANGE STABILIZATION FUND.
(a) In General.--Section 5302 of title 31, United States Code, is
amended by adding at the end the following:
``(e) Amounts in the fund may not be used for the establishment of
a guaranty program for any nongovernmental entity.''.
(b) Conforming Amendment.--Section 131(b) of the Emergency Economic
Stabilization Act of 2008 (12 U.S.C. 5236(b)) is amended by inserting
``, or for the purposes of preventing the liquidation or insolvency of
any entity'' before the period.
Subtitle E--Eliminating Financial Market Utility Designations
SEC. 251. REPEAL OF TITLE VIII.
(a) Repeal.--Title VIII of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (12 U.S.C. 5461 et seq.) is repealed, and
provisions of law amended by such title are restored and revived as if
such title had never been enacted.
(b) Clerical Amendment.--The table of contents in section 1(b) of
the Dodd-Frank Wall Street Reform and Consumer Protection Act is
amended by striking the items relating to title VIII.
TITLE III--EMPOWERING AMERICANS TO ACHIEVE FINANCIAL INDEPENDENCE
Subtitle A--Separation of Powers and Liberty Enhancements
SEC. 311. CONSUMER FINANCIAL OPPORTUNITY COMMISSION.
(a) Making the Bureau an Independent Consumer Financial Opportunity
Commission.--The Consumer Financial Protection Act of 2010 (12 U.S.C.
5481 et seq.) is amended--
(1) in section 1011--
(A) in subsection (a)--
(i) by striking ``in the Federal Reserve
System,'';
(ii) by striking ``independent bureau'' and
inserting ``independent commission'';
(iii) by striking ``Bureau of Consumer
Financial Protection'' and inserting ``Consumer
Financial Opportunity Commission (hereinafter
in this section referred to as the
`Commission')''; and
(iv) by striking ``Bureau'' each place such
term appears and inserting ``Commission'';
(B) by striking subsections (b), (c), and (d);
(C) by redesignating subsection (e) as subsection
(h);
(D) in subsection (h), as so redesignated--
(i) by striking ``, including in cities in
which the Federal reserve banks, or branches of
such banks, are located,''; and
(ii) by striking ``Bureau'' each place such
term appears and inserting ``Commission''; and
(E) by inserting after subsection (a) the following
new subsections:
``(b) Composition of the Commission.--
``(1) In general.--The Commission shall be composed of 5
members who shall be appointed by the President, by and with
the advice and consent of the Senate, from among individuals
who--
``(A) are citizens of the United States; and
``(B) have strong competencies and experiences
related to consumer financial products and services.
``(2) Staggering.--The members of the Commission shall
serve staggered terms, which initially shall be established by
the President for terms of 1, 2, 3, 4, and 5 years,
respectively.
``(3) Terms.--
``(A) In general.--Each member of the Commission,
including the Chair, shall serve for a term of 5 years.
``(B) Removal.--The President may remove any member
of the Commission for inefficiency, neglect of duty, or
malfeasance in office.
``(C) Vacancies.--Any member of the Commission
appointed to fill a vacancy occurring before the
expiration of the term to which that member's
predecessor was appointed (including the Chair) shall
be appointed only for the remainder of the term.
``(D) Continuation of service.--Each member of the
Commission may continue to serve after the expiration
of the term of office to which that member was
appointed until a successor has been appointed by the
President and confirmed by the Senate, except that a
member may not continue to serve more than 1 year after
the date on which that member's term would otherwise
expire.
``(E) Other employment prohibited.--No member of
the Commission shall engage in any other business,
vocation, or employment.
``(c) Affiliation.--Not more than 3 members of the Commission shall
be members of any one political party.
``(d) Chair of the Commission.--
``(1) Appointment.--The Chair of the Commission shall be
appointed by the President from among the members of the
Commission.
``(2) Authority.--The Chair shall be the principal
executive officer of the Commission, and shall exercise all of
the executive and administrative functions of the Commission,
including with respect to--
``(A) the appointment and supervision of personnel
employed under the Commission (other than personnel
employed regularly and full time in the immediate
offices of members of the Commission other than the
Chair);
``(B) the distribution of business among personnel
appointed and supervised by the Chair and among
administrative units of the Commission; and
``(C) the use and expenditure of funds.
``(3) Limitation.--In carrying out any of the Chair's
functions under the provisions of this subsection the Chair
shall be governed by general policies of the Commission and by
such regulatory decisions, findings, and determinations as the
Commission may by law be authorized to make.
``(4) Requests or estimates related to appropriations.--
Requests or estimates for regular, supplemental, or deficiency
appropriations on behalf of the Commission may not be submitted
by the Chair without the prior approval of the Commission.
``(e) No Impairment by Reason of Vacancies.--No vacancy in the
members of the Commission shall impair the right of the remaining
members of the Commission to exercise all the powers of the Commission.
Three members of the Commission shall constitute a quorum for the
transaction of business, except that if there are only 3 members
serving on the Commission because of vacancies in the Commission, 2
members of the Commission shall constitute a quorum for the transaction
of business. If there are only 2 members serving on the Commission
because of vacancies in the Commission, 2 members shall constitute a
quorum for the 6-month period beginning on the date of the vacancy
which caused the number of Commission members to decline to 2.
``(f) Seal.--The Commission shall have an official seal.
``(g) Compensation.--
``(1) Chair.--The Chair shall receive compensation at the
rate prescribed for level I of the Executive Schedule under
section 5313 of title 5, United States Code.
``(2) Other members of the commission.--The 4 other members
of the Commission shall each receive compensation at the rate
prescribed for level II of the Executive Schedule under section
5314 of title 5, United States Code.'';
(2) in section 1012(c), by striking paragraphs (2), (3),
(4), and (5); and
(3) in section 1014(b), by striking ``Not fewer than 6
members shall be appointed upon the recommendation of the
regional Federal Reserve Bank Presidents, on a rotating
basis.''.
(b) Deeming of Name.--Any reference in a law, regulation, document,
paper, or other record of the United States to the Bureau of Consumer
Financial Protection shall be deemed a reference to the Consumer
Financial Opportunity Commission.
(c) Conforming Amendments.--
(1) Consumer financial protection act of 2010.--
(A) In general.--Except as provided under
subparagraph (B), the Consumer Financial Protection Act
of 2010 (12 U.S.C. 5481 et seq.) is amended--
(i) by striking ``Director of the Bureau''
each place such term appears, other than where
such term is used to refer to a Director other
than the Director of the Bureau of Consumer
Financial Protection, and inserting ``Consumer
Financial Opportunity Commission'';
(ii) by striking ``Director'' each place
such term appears and inserting ``Consumer
Financial Opportunity Commission'', other than
where such term is used to refer to a Director
other than the Director of the Bureau of
Consumer Financial Protection; and
(iii) in section 1002, by striking
paragraph (10).
(B) Exceptions.--The Consumer Financial Protection
Act of 2010 (12 U.S.C. 5481 et seq.) is amended--
(i) in section 1013(c)(3)--
(I) by striking ``Assistant
Director of the Bureau for'' and
inserting ``Head of the Office of'';
and
(II) in subparagraph (B), by
striking ``Assistant Director'' and
inserting ``Head of the Office'';
(ii) in section 1013(g)(2)--
(I) by striking ``Assistant
director'' and inserting ``Head of the
office''; and
(II) by striking ``an assistant
director'' and inserting ``a Head of
the Office of Financial Protection for
Older Americans'';
(iii) in section 1016(a), by striking
``Director of the Bureau'' and inserting
``Chair of the Consumer Financial Opportunity
Commission''; and
(iv) in section 1066(a), by striking
``Director of the Bureau is'' and inserting
``first member of the Commission is''.
(2) Dodd-frank wall street reform and consumer protection
act.--Section 1447 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (12 U.S.C. 1701p-2) is amended by
striking ``Director of the Bureau'' each place such term
appears and inserting ``Consumer Financial Opportunity
Commission''.
(3) Expedited funds availability act.--The Expedited Funds
Availability Act (12 U.S.C. 4001 et seq.), as amended by
section 1086 of the Consumer Financial Protection Act of 2010,
is amended by striking ``Director of the Bureau'' each place
such term appears and inserting ``Consumer Financial
Opportunity Commission''.
(4) Federal deposit insurance act.--Section 2 of the
Federal Deposit Insurance Act (12 U.S.C. 1812), as amended by
section 336(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, is amended by striking ``Director of
the Consumer Financial Protection Bureau'' each place such term
appears and inserting ``Chair of the Consumer Financial
Opportunity Commission''.
(5) Federal financial institutions examination council act
of 1978.--Section 1004(a)(4) of the Federal Financial
Institutions Examination Council Act of 1978 (12 U.S.C.
3303(a)(4)), as amended by section 1091 of the Consumer
Financial Protection Act of 2010, is amended by striking
``Director of the Consumer Financial Protection Bureau'' and
inserting ``Chair of the Consumer Financial Opportunity
Commission''.
(6) Financial literacy and education improvement act.--
Section 513 of the Financial Literacy and Education Improvement
Act (20 U.S.C. 9702), as amended by section 1013(d)(5) of the
Consumer Financial Protection Act of 2010, is amended by
striking ``Director'' each place such term appears and
inserting ``Chair of the Consumer Financial Opportunity
Commission''.
(7) Home mortgage disclosure act of 1975.--Section 307 of
the Home Mortgage Disclosure Act of 1975, as amended by section
1094(6) of the Consumer Financial Protection Act of 2010, is
amended by striking ``Director of the Bureau of Consumer
Financial Protection'' each place such term appears and
inserting ``Consumer Financial Opportunity Commission''.
(8) Interstate land sales full disclosure act.--The
Interstate Land Sales Full Disclosure Act, as amended by
section 1098A of the Consumer Financial Protection Act of 2010,
is amended--
(A) by amending section 1402(1) to read as follows:
``(1) `Chair' means the Chair of the Consumer Financial
Opportunity Commission;''; and
(B) in section 1416(a), by striking ``Director of
the Bureau of Consumer Financial Protection'' and
inserting ``Chair''.
(9) Real estate settlement procedures act of 1974.--Section
5 of the Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2604), as amended by section 1450 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, is amended--
(A) by striking ``The Director of the Bureau of
Consumer Financial Protection (hereafter in this
section referred to as the `Director')'' and inserting
``The Consumer Financial Opportunity Commission''; and
(B) by striking ``Director'' each place such term
appears and inserting ``Consumer Financial Opportunity
Commission''.
(10) S.A.F.E. mortgage licensing act of 2008.--The S.A.F.E.
Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.), as
amended by section 1100 of the Consumer Financial Protection
Act of 2010, is amended--
(A) by striking ``Director'' each place such term
appears in headings and text, other than where such
term is used in the context of the Director of the
Office of Thrift Supervision, and inserting ``Consumer
Financial Opportunity Commission''; and
(B) in section 1503, by striking paragraph (10).
(11) Title 44, united states code.--Section 3513(c) of
title 44, United States Code, as amended by section 1100D(b) of
the Consumer Financial Protection Act of 2010, is amended by
striking ``Director of the Bureau'' and inserting ``Consumer
Financial Opportunity Commission''.
SEC. 312. BRINGING THE COMMISSION INTO THE REGULAR APPROPRIATIONS
PROCESS.
Section 1017 of the Consumer Financial Protection Act of 2010 (12
U.S.C. 5497) is amended--
(1) in subsection (a)--
(A) by amending the heading of such subsection to
read as follows: ``Budget, Financial Management, and
Audit.--'';
(B) by striking paragraphs (1), (2), and (3);
(C) by redesignating paragraphs (4) and (5) as
paragraphs (1) and (2), respectively; and
(D) by striking subparagraphs (E) and (F) of
paragraph (1), as so redesignated;
(2) by striking subsections (b) and (c);
(3) by redesignating subsections (d) and (e) as subsections
(b) and (c), respectively; and
(4) in subsection (c), as so redesignated--
(A) by striking paragraphs (1), (2), and (3) and
inserting the following:
``(1) Authorization of appropriations.--There is authorized
to be appropriated to the Commission for fiscal year 2017 an
amount equal to the aggregate amount of funds transferred by
the Board of Governors to the Bureau of Consumer Financial
Protection during fiscal year 2015.''; and
(B) by redesignating paragraph (4) as paragraph
(2).
SEC. 313. CONSUMER FINANCIAL OPPORTUNITY COMMISSION INSPECTOR GENERAL
REFORM.
(a) Appointment of Inspector General.--The Inspector General Act of
1978 (5 U.S.C. App.) is amended--
(1) in section 8G--
(A) in subsection (a)(2), by striking ``and the
Bureau of Consumer Financial Protection'';
(B) in subsection (c), by striking ``For purposes
of implementing this section'' and all that follows
through the end of the subsection; and
(C) in subsection (g)(3), by striking ``and the
Bureau of Consumer Financial Protection''; and
(2) in section 12--
(A) in paragraph (1), by inserting ``the Consumer
Financial Opportunity Commission;'' after ``the
President of the Export-Import Bank;''; and
(B) in paragraph (2), by inserting ``the Consumer
Financial Opportunity Commission,'' after ``the Export-
Import Bank,''.
(b) Requirements for the Inspector General for the Consumer
Financial Opportunity Commission.--
(1) Establishment.--Section 1011 of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5491), as amended by section
311, is further amended--
(A) by adding at the end the following:
``(i) Inspector General.--There is established the position of the
Inspector General of the Commission.''; and
(B) in subsection (d), by striking ``or Deputy
Director'' each place such term appears and inserting
``, Deputy Director, or Inspector General''.
(2) Hearings.--Section 1016 of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5496) is amended by inserting
after subsection (c) the following:
``(d) Additional Requirement for Inspector General.--On a separate
occasion from that described in subsection (a), the Inspector General
of the Commission shall appear, upon invitation, before the Committee
on Banking, Housing, and Urban Affairs of the Senate and the Committee
on Financial Services and the Committee on Energy and Commerce of the
House of Representatives at semi-annual hearings regarding the reports
required under subsection (b) and the reports required under section 5
of the Inspector General Act of 1978 (5 U.S.C. App.).''.
(3) Participation in the council of inspectors general on
financial oversight.--Section 989E(a)(1) of the Dodd-Frank Wall
Street Reform and Consumer Protection Act is amended by adding
at the end the following:
``(J) The Consumer Financial Opportunity
Commission.''.
(4) Deadline for appointment.--Not later than 60 days after
the date of the enactment of this Act, the President shall
appoint an Inspector General for the Consumer Financial
Opportunity Commission in accordance with section 3 of the
Inspector General Act of 1978 (5 U.S.C. App.).
(c) Transition Period.--The Inspector General of the Board of
Governors of the Federal Reserve System and the Bureau of Consumer
Financial Protection shall serve in that position until the
confirmation of an Inspector General for the Consumer Financial
Opportunity Commission. At that time, the Inspector General of the
Board of Governors of the Federal Reserve System and the Bureau of
Consumer Financial Protection shall become the Inspector General of the
Board of Governors of the Federal Reserve System.
SEC. 314. PRIVATE PARTIES AUTHORIZED TO COMPEL THE COMMISSION TO SEEK
SANCTIONS BY FILING CIVIL ACTIONS; ADJUDICATIONS DEEMED
ACTIONS.
Section 1053 of the Consumer Financial Protection Act of 2010 (12
U.S.C. 5563) is amended by adding at the end the following:
``(f) Private Parties Authorized to Compel the Commission to Seek
Sanctions by Filing Civil Actions.--
``(1) Termination of administrative proceeding.--In the
case of any person who is a party to a proceeding brought by
the Commission under this section, to which chapter 5 of title
5, United States Code, applies, and against whom an order
imposing a cease and desist order or a penalty may be issued at
the conclusion of the proceeding, that person may, not later
than 20 days after receiving notice of such proceeding, and at
that person's discretion, require the Commission to terminate
the proceeding.
``(2) Civil action authorized.--If a person requires the
Commission to terminate a proceeding pursuant to paragraph (1),
the Commission may bring a civil action against that person for
the same remedy that might be imposed.
``(g) Adjudications Deemed Actions.--Any administrative
adjudication commenced under this section shall be deemed an `action'
for purposes of section 1054(g).''.
SEC. 315. CIVIL INVESTIGATIVE DEMANDS TO BE APPEALED TO COURTS.
Section 1052 of the Consumer Financial Protection Act of 2010 (12
U.S.C. 5562) is amended--
(1) in subsection (c)--
(A) in paragraph (2), by inserting after ``shall
state'' the following: ``with specificity''; and
(B) by adding at the end the following:
``(14) Meeting requirement.--The recipient of a civil
investigative demand shall meet and confer with a Commission
investigator within 30 calendar days after receipt of the
demand to discuss and attempt to resolve all issues regarding
compliance with the civil investigative demand, unless the
Commission grants an extension requested by such recipient.'';
(2) in subsection (f)--
(A) by amending paragraph (1) to read as follows:
``(1) In general.--Not later than 45 days after the service
of any civil investigative demand upon any person under
subsection (c), or at any time before the return date specified
in the demand, whichever period is shorter, or within such
period exceeding 45 days after service or in excess of such
return date as may be prescribed in writing, subsequent to
service, by any Commission investigator named in the demand,
such person may file, in the district court of the United
States for any judicial district in which such person resides,
is found, or transacts business, a petition for an order
modifying or setting aside the demand.''; and
(B) in paragraph (2), by striking ``at the
Bureau''; and
(3) in subsection (h)--
(A) by striking ``(1) In general.--'' ; and
(B) by striking paragraph (2).
SEC. 316. COMMISSION DUAL MANDATE AND ECONOMIC ANALYSIS.
(a) Purpose.--Section 1021(a) of the Consumer Financial Protection
Act of 2010 (12 U.S.C. 5511(a)) is amended--
(1) by striking ``fair, transparent, and competitive'' and
inserting: ``fair and transparent''; and
(2) by adding at the end the following: ``In addition, the
Commission shall seek to implement and, where applicable,
enforce Federal consumer financial law consistently for the
purpose of strengthening participation in markets by covered
persons, without Government interference or subsidies, to
increase competition and enhance consumer choice.''; and
(b) Office of Economic Analysis.--
(1) In general.--Section 1013 of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5493) is amended by adding at
the end the following:
``(h) Office of Economic Analysis.--
``(1) Establishment.--The Chair shall establish an Office
of Economic Analysis.
``(2) Review and assessment of proposed rules and
regulations.--The Office of Economic Analysis shall--
``(A) review all proposed rules and regulations of
the Commission;
``(B) assess the impact of such rules and
regulations on consumer choice, price, and access to
credit products; and
``(C) publish a report on such reviews and
assessments in the Federal Register.
``(3) Measuring existing rules and regulations.--The Office
of Economic Analysis shall--
``(A) review each rule and regulation issued by the
Commission after 1, 2, 5, and 10 years;
``(B) measure the rule or regulation's success in
solving the problem that the rule or regulation was
intended to solve when issued; and
``(C) publish a report on such review and
measurement in the Federal Register.''.
(2) Consideration of review and assessment; rulemaking
requirements.--Section 1022(b) of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5512(b)) is amended by adding
at the end the following:
``(5) Consideration of review and assessment by the office
of economic analysis.--
``(A) In general.--Before issuing any rule or
regulation, the Chair shall consider the review and
assessment of such rule or regulation carried out by
the Office of Economic Analysis.
``(B) Notice of disagreement.--If a member of the
Commission disagrees with any part of a review and
assessment described under subparagraph (A) with
respect to any rule or regulation, the member shall
accompany any such rule or regulation with a statement
explaining why the member so disagrees.
``(6) Identification of problems and metrics for judging
success.--
``(A) In general.--The Chair shall, in each
proposed rulemaking of the Commission--
``(i) identify the problem that the
particular rule or regulations is seeking to
solve; and
``(ii) specify the metrics by which the
Commission will measure the success of the rule
or regulation in solving such problem.
``(B) Required metrics.--The metrics specified
under subparagraph (A)(ii) shall include a measurement
of changes to consumer access to, and cost of, consumer
financial products and services.''.
(c) Avoidance of Duplicative or Unnecessary Analyses.--The
Commission may perform any of the analyses required by this section in
conjunction with, or as part of, any other agenda or analysis required
by any other provision of law, if such other agenda or analysis
satisfies the provisions of this section.
SEC. 317. NO DEFERENCE TO COMMISSION INTERPRETATION.
The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et
seq.) is amended--
(1) in section 1022(b)(4)--
(A) by striking ``(A) In general.--''; and
(B) by striking subparagraph (B); and
(2) in section 1061(b)(5)(E)--
(A) by striking ``affords to the--'' and all that
follows through ``(i) Federal Trade Commission'' and
inserting ``affords to the Federal Trade Commission'';
(B) by striking ``; or'' and inserting a period;
and
(C) by striking clause (ii).
Subtitle B--Administrative Enhancements
SEC. 321. COMMISSION ADVISORY BOARDS.
(a) In General.--The Consumer Financial Protection Act of 2010 is
amended by inserting after section 1014 (12 U.S.C. 5494) the following
new section:
``SEC. 1014A. ADVISORY BOARDS.
``(a) Small Business Advisory Board.--
``(1) Establishment.--The Commission shall establish a
Small Business Advisory Board--
``(A) to advise and consult with the Commission in
the exercise of the Commission's functions under the
Federal consumer financial laws applicable to eligible
financial products or services; and
``(B) to provide information on emerging practices
of small business concerns that provide eligible
financial products or services, including regional
trends, concerns, and other relevant information.
``(2) Membership.--
``(A) Number.--The Commission shall appoint no
fewer than 15 and no more than 20 members to the Small
Business Advisory Board.
``(B) Qualification.--Members appointed pursuant to
subparagraph (A) shall be representatives of small
business concerns that--
``(i) provide eligible financial products
or services;
``(ii) are service providers to covered
persons; and
``(iii) use consumer financial products or
services in financing the business activities
of such concern.
``(3) Meetings.--The Small Business Advisory Board--
``(A) shall meet from time to time at the call of
the Commission; and
``(B) shall meet at least twice each year.
``(b) Credit Union Advisory Council.--
``(1) Establishment.--The Commission shall establish a
Credit Union Advisory Council to advise and consult with the
Commission on consumer financial products or services that
impact credit unions.
``(2) Membership.--The Commission shall appoint no fewer
than 15 and no more than 20 members to the Credit Union
Advisory Council.
``(3) Meetings.--The Credit Union Advisory Council--
``(A) shall meet from time to time at the call of
the Commission; and
``(B) shall meet at least twice each year.
``(c) Community Bank Advisory Council.--
``(1) Establishment.--The Commission shall establish a
Community Bank Advisory Council to advise and consult with the
Commission on consumer financial products or services that
impact community banks.
``(2) Membership.--The Commission shall appoint no fewer
than 15 and no more than 20 members to the Community Bank
Advisory Council.
``(3) Meetings.--The Community Bank Advisory Council--
``(A) shall meet from time to time at the call of
the Commission; and
``(B) shall meet at least twice each year.
``(d) Compensation and Travel Expenses.--Members of the Small
Business Advisory Board, the Credit Union Advisory Council, or the
Community Bank Advisory Council who are not full-time employees of the
United States shall--
``(1) be entitled to receive compensation at a rate fixed
by the Commission while attending meetings of the Small
Business Advisory Board, the Credit Union Advisory Council, or
the Community Bank Advisory Council, including travel time; and
``(2) be allowed travel expenses, including transportation
and subsistence, while away from their homes or regular places
of business.
``(e) Definitions.--In this section--
``(1) the term `eligible financial product or service'
means a financial product or service that is offered or
provided for use by consumers primarily for personal, family,
or household purposes as described in clause (i), (iii), (v),
(vi), or (ix) of section 1002(15)(A); and
``(2) the term `small business concern' has the meaning
given such term in section 3 of the Small Business Act (15
U.S.C. 632).''.
(b) Table of Contents Amendment.--The table of contents in section
1 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12
U.S.C. 5301 et seq.) is amended by inserting after the item relating to
section 1014 the following new item:
``Sec. 1014A. Advisory Boards.''.
SEC. 322. ADVISORY OPINIONS.
Section 1022(b) of the Consumer Financial Protection Act of 2010
(12 U.S.C. 5512(b)), as amended by section 316, is further amended by
adding at the end the following:
``(7) Advisory opinions.--
``(A) Establishing procedures.--
``(i) In general.--The Chair shall
establish a procedure and, as necessary,
promulgate rules to provide written opinions in
response to inquiries concerning the
conformance of specific conduct with Federal
consumer financial law. In establishing the
procedure the Chair shall consult with the
prudential regulators and such other Federal
departments and agencies as the Chair
determines appropriate, and obtain the views of
all interested persons through a public notice
and comment period.
``(ii) Scope of request.--A request for an
opinion under this paragraph must relate to
specific proposed or prospective conduct by a
covered person contemplating the proposed or
prospective conduct.
``(iii) Submission.--A request for an
opinion under this paragraph may be submitted
to the Chair either by or on behalf of a
covered person.
``(iv) Right to withdraw inquiry.--Any
inquiry under this paragraph may be withdrawn
at any time prior to the Chair issuing an
opinion in response to such inquiry, and any
opinion based on an inquiry that has been
withdrawn shall have no force or effect.
``(B) Issuance of opinions.--
``(i) In general.--The Chair shall, within
90 days of receiving the request for an opinion
under this paragraph, either--
``(I) issue an opinion stating
whether the described conduct would
violate Federal consumer financial law;
``(II) if permissible under clause
(iii), deny the request; or
``(III) explain why it is not
feasible to issue an opinion.
``(ii) Extension.--Notwithstanding clause
(i), if the Chair determines that the
Commission requires additional time to issue an
opinion, the Chair may make a single extension
of the deadline of 90 days or less.
``(iii) Denial of requests.--The Chair
shall not issue an opinion, and shall so inform
the requestor, if the request for an opinion--
``(I) asks a general question of
interpretation;
``(II) asks about a hypothetical
situation;
``(III) asks about the conduct of
someone other than the covered person
on whose behalf the request is made;
``(IV) asks about past conduct that
the covered person on whose behalf the
request is made does not plan to
continue in the future; or
``(V) fails to provide necessary
supporting information requested by the
Commission within a reasonable time
established by the Commission.
``(iv) Amendment and revocation.--An
advisory opinion issued under this paragraph
may be amended or revoked at any time.
``(v) Public disclosure.--An opinion
rendered pursuant to this paragraph shall be
placed in the Commission's public record 90
days after the requesting party has received
the advice, subject to any limitations on
public disclosure arising from statutory
restrictions, Commission regulations, or the
public interest. The Commission shall redact
any personal, confidential, or identifying
information about the covered person or any
other persons mentioned in the advisory
opinion, unless the covered person consents to
such disclosure.
``(vi) Report to congress.--The Commission
shall, concurrent with the semi-annual report
required under section 1016(b), submit
information regarding the number of requests
for an advisory opinion received, the subject
of each request, the number of requests denied
pursuant to clause (iii), and the time needed
to respond to each request.
``(C) Reliance on opinion.--Any person may rely on
an opinion issued by the Chair pursuant to this
paragraph that has not been amended or withdrawn. No
liability under Federal consumer financial law shall
attach to conduct consistent with an advisory opinion
that had not been amended or withdrawn at the time the
conduct was undertaken.
``(D) Confidentiality.--Any document or other
material that is received by the Commission or any
other Federal department or agency in connection with
an inquiry under this paragraph shall be exempt from
disclosure under section 552 of title 5, United States
Code (commonly referred to as the `Freedom of
Information Act') and may not, except with the consent
of the covered person making such inquiry, be made
publicly available, regardless of whether the Chair
responds to such inquiry or the covered person
withdraws such inquiry before receiving an opinion.
``(E) Assistance for small businesses.--
``(i) In general.--The Commission shall
assist, to the maximum extent practicable,
small businesses in preparing inquiries under
this paragraph.
``(ii) Small business defined.--For
purposes of this subparagraph, the term `small
business' has the meaning given the term `small
business concern' under section 3 of the Small
Business Act (15 U.S.C. 632).
``(F) Inquiry fee.--
``(i) In general.--The Chair shall develop
a system to charge a fee for each inquiry made
under this paragraph in an amount sufficient,
in the aggregate, to pay for the cost of
carrying out this paragraph.
``(ii) Notice and comment.--Not later than
45 days after the date of the enactment of this
paragraph, the Chair shall publish a
description of the fee system described in
clause (i) in the Federal Register and shall
solicit comments from the public for a period
of 60 days after publication.
``(iii) Finalization.--The Chair shall
publish a final description of the fee system
and implement such fee system not later than 30
days after the end of the public comment period
described in clause (ii).''.
SEC. 323. REFORM OF CONSUMER FINANCIAL CIVIL PENALTY FUND.
(a) Segregated Accounts.--Section 1017(b) of the Consumer Financial
Protection Act of 2010, as redesignated by section 312, is amended by
redesignating paragraph (2) as paragraph (3), and by inserting after
paragraph (1) the following new paragraph:
``(2) Segregated accounts in civil penalty fund.--
``(A) In general.--The Commission shall establish
and maintain a segregated account in the Civil Penalty
Fund each time the Commission obtains a civil penalty
against any person in any judicial or administrative
action under Federal consumer financial laws.
``(B) Deposits in segregated accounts.--The
Commission shall deposit each civil penalty collected
into the segregated account established for such
penalty under subparagraph (A).''.
(b) Payment to Victims.--Paragraph (3) of section 1017(b) of such
Act, as redesignated by subsection (a), is amended to read as follows:
``(3) Payment to victims.--
``(A) In general.--
``(i) Identification of class.--Not later
than 60 days after the date of deposit of
amounts in a segregated account in the Civil
Penalty Fund, the Commission shall identify the
class of victims of the violation of Federal
consumer financial laws for which such amounts
were collected and deposited under paragraph
(2).
``(ii) Payments.--The Commission, within 2
years after the date on which such class of
victims is identified, shall locate and make
payments from such amounts to each victim.
``(B) Funds deposited in treasury.--
``(i) In general.--The Commission shall
deposit into the general fund of the Treasury
any amounts remaining in a segregated account
in the Civil Penalty Fund at the end of the 2-
year period for payments to victims under
subparagraph (A).
``(ii) Impossible or impractical
payments.--If the Commission determines before
the end of the 2-year period for payments to
victims under subparagraph (A) that such
victims cannot be located or payments to such
victims are otherwise not practicable, the
Commission shall deposit into the general fund
of the Treasury the amounts in the segregated
account in the Civil Penalty Fund.''.
(c) Conforming Amendment.--Paragraph (1) of such section 1017(b) of
the Consumer Financial Protection Act of 2010 (12 U.S.C. 5497(d)(1)) is
amended by striking the last sentence.
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to civil penalties collected after the date
of enactment of this Act.
(2) Amounts in consumer financial civil penalty fund on
date of enactment.--With respect to amounts in the Consumer
Financial Civil Penalty Fund on the date of enactment of this
Act that were not allocated for consumer education and
financial literacy programs on or before September 30, 2015,
the Consumer Financial Opportunity Commission shall separate
such amounts into segregated accounts in accordance with, and
for purposes of, section 1017(d) of the Consumer Financial
Protection Act of 2010, as amended by this section. The date of
deposit of such amounts shall be deemed to be the date of
enactment of this Act.
SEC. 324. COMMISSION RESEARCH PAPER TRANSPARENCY.
Section 1013 of the Consumer Financial Protection Act of 2010 (12
U.S.C. 5493), as amended by section 316, is further amended by adding
at the end the following:
``(i) Research Paper Transparency.--Any time the Commission, either
through the research unit established by the Chair under subsection
(b)(1) or otherwise, issues a research paper that is available to the
public, the Commission shall accompany such paper with all studies,
data, and other analyses on which the paper was based.''.
SEC. 325. COMMISSION PAY FAIRNESS.
(a) In General.--Section 1013(a)(2) of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5493(a)(2)) is amended to read as
follows:
``(2) Compensation.--The rates of basic pay for all
employees of the Commission shall be set and adjusted by the
Commission in accordance with the General Schedule set forth in
section 5332 of title 5, United States Code.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to service by an employee of the Consumer Financial Opportunity
Commission following the 90-day period beginning on the date of
enactment of this Act.
SEC. 326. SEPARATION OF MARKET MONITORING FUNCTIONS AND SUPERVISORY
FUNCTIONS.
The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et
seq.) is amended--
(1) in section 1022(c)--
(A) in paragraph (1), by striking ``In order to
support its rulemaking and other functions, the'' and
inserting ``The''; and
(B) in paragraph (4)--
(i) in subparagraph (A), by inserting after
``gather information'' the following: ``on a
sampling basis'';
(ii) in subparagraph (B)--
(I) in clause (i), by striking ``a
variety of sources, including
examination reports concerning covered
persons or service providers''; and
(II) in clause (ii), by inserting
after ``require'' the following: ``, on
a sampling basis,''; and
(iii) in subparagraph (C), by inserting
before the period the following: ``or for
purposes of assessing such covered persons' or
service providers' compliance with the
requirements of Federal consumer financial
law'';
(2) in section 1024(b)(1)--
(A) in subparagraph (A), by adding ``and'' at the
end;
(B) in subparagraph (B), by striking ``; and'' and
inserting a period; and
(C) by striking subparagraph (C);
(3) in section 1025(b)(1)--
(A) in subparagraph (A), by adding ``and'' at the
end;
(B) in subparagraph (B), by striking ``; and'' and
inserting a period; and
(C) by striking subparagraph (C); and
(4) in section 1026(b), by striking ``, and to assess and
detect risks to consumers and consumer financial markets''.
SEC. 327. REQUIREMENT TO VERIFY INFORMATION IN THE COMPLAINT DATABASE
BEFORE IT MAY BE RELEASED TO THE GENERAL PUBLIC.
Section 1013(b)(3)(A) of the Consumer Financial Protection Act of
2010 (12 U.S.C. 5493(b)(3)(A)) is amended by adding at the end the
following: ``The Chair may not make any information about a consumer
complaint in such database available to the public without first
verifying the accuracy of all facts alleged in such complaint.''.
SEC. 328. COMMISSION SUPERVISION LIMITED TO BANKS, THRIFTS, AND CREDIT
UNIONS WITH GREATER THAN $50 BILLION IN ASSETS.
The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et
seq.) is amended--
(1) in section 1025(a), by striking ``$10,000,000,000''
each place such term appears and inserting ``$50,000,000,000'';
and
(2) in section 1026(a), by striking ``$10,000,000,000''
each place such term appears and inserting ``$50,000,000,000''.
SEC. 329. TRANSFER OF OLD OTS BUILDING FROM OCC TO GSA.
Not later than 180 days after the date of enactment of this Act,
the Chair of the Board of Directors of the Office of the Comptroller of
the Currency shall transfer administrative jurisdiction over the
Federal property located at 1700 G Street, Northwest, in the District
of Columbia to the Administrator of General Services.
Subtitle C--Policy Enhancements
SEC. 331. CONSUMER RIGHT TO FINANCIAL PRIVACY.
(a) Requirement of the Commission to Obtain Permission Before
Collecting Nonpublic Personal Information.--
(1) Required notification and permission.--Section
1022(c)(9)(A) of the Consumer Financial Protection Act of 2010
(12 U.S.C. 5512(c)(9)(A)) is amended--
(A) by striking ``may not obtain from a covered
person or service provider'' and inserting ``may not
request, obtain, access, collect, use, retain, or
disclose'';
(B) by striking ``personally identifiable
financial'' and inserting ``nonpublic personal''; and
(C) by striking ``from the financial records'' and
all that follows through the period at the end and
inserting ``unless--
``(i) the Commission clearly and
conspicuously discloses to the consumer, in
writing or in an electronic form, what
information will be requested, obtained,
accessed, collected, used, retained, or
disclosed; and
``(ii) before such information is
requested, obtained, accessed, collected, used,
retained, or disclosed, the consumer informs
the Commission that such information may be
requested, obtained, accessed, collected, used,
retained, or disclosed.''.
(2) Application of requirement to contractors of the
commission.--Section 1022(c)(9)(B) of such Act (12 U.S.C.
5512(c)(9)(B)) is amended to read as follows:
``(B) Application of requirement to contractors of
the commission.--Subparagraph (A) shall apply to any
person directed or engaged by the Commission to collect
information to the extent such information is being
collected on behalf of the Commission.''.
(3) Definition of nonpublic personal information.--Section
1022(c)(9) of such Act (12 U.S.C. 5512(c)(9)) is amended by
adding at the end the following:
``(C) Definition of nonpublic personal
information.--In this paragraph, the term `nonpublic
personal information' has the meaning given the term in
section 509 of the Gramm-Leach-Bliley Act (15 U.S.C.
6809).''.
(b) Removal of Exemption for the Commission From the Right to
Financial Privacy Act.--Section 1113 of the Right to Financial Privacy
Act of 1978 (12 U.S.C. 3413) is amended by striking subsection (r).
SEC. 332. REPEAL OF COUNCIL AUTHORITY TO SET ASIDE BUREAU RULES AND
REQUIREMENT OF SAFETY AND SOUNDNESS CONSIDERATIONS WHEN
ISSUING RULES.
(a) Repeal of Authority.--
(1) In general.--Section 1023 of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5513) is hereby repealed.
(2) Conforming amendment.--Section 1022(b)(2)(C) of the
Consumer Financial Protection Act of 2010 (12 U.S.C.
5512(b)(2)(C)) is amended by striking ``, except that nothing
in this clause shall be construed as altering or limiting the
procedures under section 1023 that may apply to any rule
prescribed by the Bureau of Consumer Financial Protection''.
(3) Clerical amendment.--The table of contents under
section 1(b) of the Dodd-Frank Wall Street Reform and Consumer
Protection Act is amended by striking the item relating to
section 1023.
(b) Safety and Soundness Check.--Section 1022(b)(2)(A) of the
Consumer Financial Protection Act of 2010 (12 U.S.C. 5512(b)(2)(A)) is
amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii), by adding ``and'' at the end; and
(3) by adding at the end the following:
``(iii) the impact of such rule on the
financial safety or soundness of an insured
depository institution;''.
SEC. 333. STATE AND TRIBAL PAYDAY LOAN REGULATION 5-YEAR EXEMPTION.
Section 1022 of the Consumer Financial Protection Act of 2010 (12
U.S.C. 5512) is amended by adding at the end the following:
``(e) State and Tribal Payday Loan Regulation 5-year Exemption.--
``(1) In general.--With respect to a final rule or
regulation issued by the Bureau of Consumer Financial
Protection to regulate payday loans, vehicle title loans, or
other similar loans, if a State or a federally recognized
Indian tribe requests, in writing, for the Commission to
provide the State or tribe with a waiver from such rule or
regulation, the Commission shall grant a 5-year waiver to such
State or tribe, during which such rule or regulation shall not
apply within such State or land held in trust for the benefit
of such federally recognized Indian tribe.
``(2) Extension of waiver.--A State or a federally
recognized Indian tribe receiving a waiver under paragraph (1)
shall have the right to an unlimited number of 5-year
extensions of such waiver, which shall be granted upon the
request, in writing, for such waiver by the State or tribe.''.
SEC. 334. REFORMING INDIRECT AUTO FINANCING GUIDANCE.
(a) Nullification of Auto Lending Guidance.--Bulletin 2013-02 of
the Bureau of Consumer Financial Protection (published March 21, 2013)
shall have no force or effect.
(b) Guidance Requirements.--Section 1022(b) of the Consumer
Financial Protection Act of 2010 (12 U.S.C. 5512(b)), as amended by
section 322, is further amended by adding at the end the following:
``(8) Guidance on indirect auto financing.--In proposing
and issuing guidance primarily related to indirect auto
financing, the Commission shall--
``(A) provide for a public notice and comment
period before issuing the guidance in final form;
``(B) make available to the public, including on
the website of the Commission, all studies, data,
methodologies, analyses, and other information relied
on by the Commission in preparing such guidance;
``(C) redact any information that is exempt from
disclosure under paragraph (3), (4), (6), (7), or (8)
of section 552(b) of title 5, United States Code;
``(D) consult with the Board of Governors of the
Federal Reserve System, the Federal Trade Commission,
and the Department of Justice; and
``(E) conduct a study on the costs and impacts of
such guidance to consumers and women-owned, minority-
owned, veteran-owned, and small businesses, including
consumers and small businesses in rural areas.''.
(c) Rule of Construction.--Nothing in this section shall be
construed to apply to guidance issued by the Consumer Financial
Opportunity Commission that is not primarily related to indirect auto
financing.
SEC. 335. PROHIBITION OF GOVERNMENT PRICE CONTROLS FOR PAYMENT CARD
TRANSACTIONS.
(a) In General.--Section 1075 of the Consumer Financial Protection
Act of 2010 is hereby repealed and the provisions of law amended by
such section are revived or restored as if such section had not been
enacted.
(b) Clerical Amendment.--The table of contents under section 1(b)
of the Dodd-Frank Wall Street Reform and Consumer Protection Act is
amended by striking the item relating to section 1075.
SEC. 336. ANNUAL STUDIES ON ENDING THE CONSERVATORSHIP OF FANNIE MAE,
FREDDIE MAC, AND REFORMING THE HOUSING FINANCE SYSTEM.
Section 1074 of the Consumer Financial Protection Act of 2010 is
amended--
(1) in subsection (a)--
(A) in paragraph (1), by inserting after
``Secretary of the Treasury shall'' the following: ``,
on an annual basis,''; and
(B) in paragraph (2), by striking ``The study'' and
inserting ``Each study'';
(2) by amending subsection (b) to read as follows:
``(b) Report and Recommendations.--The Secretary of the Treasury
shall submit a report on each study required under subsection (a),
along with recommendations developed in such study, to the President,
the Committee on Banking, Housing, and Urban Affairs of the Senate, and
the Committee on Financial Services of the House of Representatives.'';
and
(3) by adding at the end the following:
``(c) Appearances Before Congress.--The Secretary of the Treasury
shall appear before the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the
House of Representatives at annual hearings regarding each report
required under subsection (b).''.
SEC. 337. REMOVAL OF ``ABUSIVE'' AUTHORITY.
The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et
seq.) is amended--
(1) in section 1013(g)--
(A) by striking ``, deceptive, and abusive'' each
place such term appears and inserting ``and
deceptive''; and
(B) by striking ``, deceptive, or abusive'' each
place such term appears and inserting ``or deceptive'';
(2) in section 1021(b)(2), by striking ``, deceptive, or
abusive'' and inserting ``or deceptive'';
(3) in section 1031--
(A) in the heading of such section, by striking ``,
deceptive, or abusive'' and inserting ``or deceptive'';
(B) by striking ``, deceptive, or abusive'' each
place such term appears and inserting ``or deceptive'';
(C) by striking subsection (d); and
(D) by redesignating subsections (e) and (f) as
subsections (d) and (e), respectively;
(4) in section 1036(a)(1)(B), by striking ``, deceptive, or
abusive'' and inserting ``or deceptive''; and
(5) in section 1076(b)(2)(A), by striking ``, deceptive, or
abusive'' and inserting ``or deceptive''.
SEC. 338. REPEAL OF AUTHORITY TO RESTRICT ARBITRATION.
(a) In General.--Section 1028 of the Consumer Financial Protection
Act of 2010 (12 U.S.C. 5518) is hereby repealed.
(b) Clerical Amendment.--The table of contents under section 1(b)
of the Dodd-Frank Wall Street Reform and Consumer Protection Act is
amended by striking the item relating to section 1028.
TITLE IV--CAPITAL MARKETS IMPROVEMENTS
Subtitle A--SEC Reform, Restructuring, and Accountability
SEC. 401. AUTHORIZATION OF APPROPRIATIONS.
Section 35 of the Securities Exchange Act of 1934 (15 U.S.C. 78kk)
is amended by striking paragraphs (1) through (5) and inserting the
following:
``(1) for fiscal year 2017, $1,555,000,000;
``(2) for fiscal year 2018, $1,605,000,000;
``(3) for fiscal year 2019, $1,655,000,000;
``(4) for fiscal year 2020, $1,705,000,000; and
``(5) for fiscal year 2021, $1,755,000,000.''.
SEC. 402. REPORT ON UNOBLIGATED APPROPRIATIONS.
Section 23 of the Securities Exchange Act of 1934 (15 U.S.C. 78w)
is amended by adding at the end the following:
``(e) Report on Unobligated Appropriations.--If, at the end of any
fiscal year, there remain unobligated any funds that were appropriated
to the Commission for such fiscal year, the Commission shall, not later
than 30 days after the last day of such fiscal year, submit to the
Committee on Financial Services and the Committee on Appropriations of
the House of Representatives and the Committee on Banking, Housing, and
Urban Affairs and the Committee on Appropriations of the Senate a
report stating the amount of such unobligated funds. If there is any
material change in the amount stated in the report, the Commission
shall, not later than 7 days after determining the amount of the
change, submit to such committees a supplementary report stating the
amount of and reason for the change.''.
SEC. 403. SEC RESERVE FUND ABOLISHED.
Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is
amended by striking subsection (i).
SEC. 404. FEES TO OFFSET APPROPRIATIONS.
(a) Section 31 of the Securities Exchange Act of 1934.--Section 31
of the Securities Exchange Act of 1934 (15 U.S.C. 78ee) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Collection.--The Commission shall, in accordance with this
section, collect transaction fees and assessments.'';
(2) in subsection (i)--
(A) in paragraph (1)(A), by inserting ``except as
provided in paragraph (2),'' before ``shall''; and
(B) by striking paragraph (2) and inserting the
following:
``(2) General revenue.--Any fees collected for a fiscal
year pursuant to this section, sections 13(e) and 14(g) of this
title, and section 6(b) of the Securities Act of 1933 in excess
of the amount provided in appropriation Acts for collection for
such fiscal year pursuant to such sections shall be deposited
and credited as general revenue of the Treasury.'';
(3) in subsection (j)--
(A) by striking ``the regular appropriation to the
Commission by Congress for such fiscal year'' each
place it appears and inserting ``the target offsetting
collection amount for such fiscal year''; and
(B) in paragraph (2), by striking ``subsection
(l)'' and inserting ``subsection (l)(2)''; and
(4) by striking subsection (l) and inserting the following:
``(l) Definitions.--For purposes of this section:
``(1) Target offsetting collection amount.--The target
offsetting collection amount for a fiscal year is--
``(A) for fiscal year 2017, $1,400,000,000; and
``(B) for each succeeding fiscal year, the target
offsetting collection amount for the prior fiscal year,
adjusted by the rate of inflation.
``(2) Baseline estimate of the aggregate dollar amount of
sales.--The baseline estimate of the aggregate dollar amount of
sales for any fiscal year is the baseline estimate of the
aggregate dollar amount of sales of securities (other than
bonds, debentures, other evidences of indebtedness, security
futures products, and options on securities indexes (excluding
a narrow-based security index)) to be transacted on each
national securities exchange and by or through any member of
each national securities association (otherwise than on a
national securities exchange) during such fiscal year as
determined by the Commission, after consultation with the
Congressional Budget Office and the Office of Management and
Budget, using the methodology required for making projections
pursuant to section 257 of the Balanced Budget and Emergency
Deficit Control Act of 1985.''.
(b) Section 6(b) of the Securities Act of 1933.--Section 6(b) of
the Securities Act of 1933 (15 U.S.C. 77f(b)) is amended--
(1) by striking ``target fee collection amount'' each place
it appears and inserting ``target offsetting collection
amount'';
(2) in paragraph (4), by striking the last sentence and
inserting the following: ``Subject to paragraphs (6)(B) and
(7), an adjusted rate prescribed under paragraph (2) shall take
effect on the later of--
``(A) the first day of the fiscal year to which
such rate applies; or
``(B) five days after the date on which a regular
appropriation to the Commission for such fiscal year is
enacted.'';
(3) in paragraph (5), by inserting ``of the Securities
Exchange Act of 1934'' after ``sections 13(e) and 14(g)'';
(4) by redesignating paragraph (6) as paragraph (8);
(5) by inserting after paragraph (5) the following:
``(6) Offsetting collections.--Fees collected pursuant to
this subsection for any fiscal year--
``(A) except as provided in section 31(i)(2) of the
Securities Exchange Act of 1934, shall be deposited and
credited as offsetting collections to the account
providing appropriations to the Commission; and
``(B) except as provided in paragraph (7), shall
not be collected for any fiscal year except to the
extent provided in advance in appropriation Acts.
``(7) Lapse of appropriation.--If on the first day of a
fiscal year a regular appropriation to the Commission has not
been enacted, the Commission shall continue to collect fees (as
offsetting collections) under this subsection at the rate in
effect during the preceding fiscal year, until 5 days after the
date such a regular appropriation is enacted.''; and
(6) in paragraph (8) (as so redesignated), by striking the
heading of subparagraph (A) and inserting ``Target offsetting
collection amount.--''.
(c) Section 13(e) of the Securities Exchange Act of 1934.--Section
13(e) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(e)) is
amended--
(1) by striking paragraph (5) and inserting the following:
``(5) Offsetting collections.--Fees collected pursuant to
this subsection for any fiscal year--
``(A) except as provided in section 31(i)(2), shall
be deposited and credited as offsetting collections to
the account providing appropriations to the Commission;
and
``(B) except as provided in paragraph (8), shall
not be collected for any fiscal year except to the
extent provided in advance in appropriations Acts.'';
and
(2) by adding at the end the following:
``(8) Lapse of appropriation.--If on the first day of a
fiscal year a regular appropriation to the Commission has not
been enacted, the Commission shall continue to collect fees (as
offsetting collections) under this subsection at the rate in
effect during the preceding fiscal year, until 5 days after the
date such a regular appropriation is enacted.''.
(d) Section 14(g) of the Securities Exchange Act of 1934.--Section
14(g) of the Securities Exchange Act of 1934 (15 U.S.C. 78n(g)) is
amended--
(1) by striking paragraph (5) and inserting the following:
``(5) Offsetting collections.--Fees collected pursuant to
this subsection for any fiscal year--
``(A) except as provided in section 31(i)(2), shall
be deposited and credited as offsetting collections to
the account providing appropriations to the Commission;
and
``(B) except as provided in paragraph (8), shall
not be collected for any fiscal year except to the
extent provided in advance in appropriations Acts.'';
(2) by redesignating paragraph (8) as paragraph (9); and
(3) by inserting after paragraph (7) the following:
``(8) Lapse of appropriation.--If on the first day of a
fiscal year a regular appropriation to the Commission has not
been enacted, the Commission shall continue to collect fees (as
offsetting collections) under this subsection at the rate in
effect during the preceding fiscal year, until 5 days after the
date such a regular appropriation is enacted.''.
(e) Effective Date.--The amendments made by this section--
(1) shall apply beginning on October 1, 2016, except that
for fiscal year 2017, the Securities and Exchange Commission
shall publish--
(A) the rates established under section 31 of the
Securities Exchange Act of 1934, as amended by this
section, not later than 30 days after the date on which
an Act making a regular appropriation to the Commission
for fiscal year 2017 is enacted; and
(B) the rate established under section 6(b) of the
Securities Act of 1933, as amended by this section, not
later than August 31, 2016; and
(2) shall not apply with respect to fees for any fiscal
year before fiscal year 2017.
SEC. 405. IMPLEMENTATION OF RECOMMENDATIONS.
Section 967 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act is amended by adding at the end the following:
``(d) Implementation of Recommendations.--Not later than 6 months
after the date of enactment of this subsection, the Securities and
Exchange Commission shall complete an implementation of the
recommendations contained in the report of the independent consultant
issued under subsection (b) on March 10, 2011. To the extent that
implementation of certain recommendations requires legislation, the
Commission shall submit a report to Congress containing a request for
legislation granting the Commission such authority it needs to fully
implement such recommendations.''.
SEC. 406. OFFICE OF CREDIT RATINGS TO REPORT TO THE DIVISION OF TRADING
AND MARKETS.
Section 15E(p)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
78o-7(p)(1)) is amended--
(1) in subparagraph (A), by striking ``within the
Commission'' and inserting ``within the Division of Trading and
Markets''; and
(2) in subparagraph (B), by striking ``report to the
Chairman'' and inserting ``report to the head of the Division
of Trading and Markets''.
SEC. 407. OFFICE OF MUNICIPAL SECURITIES TO REPORT TO THE DIVISION OF
TRADING AND MARKETS.
Section 979 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (15 U.S.C. 78o-4a) is amended--
(1) in subsection (a), by inserting ``, within the Division
of Trading and Markets,'' after ``There shall be in the
Commission''; and
(2) in subsection (b), by striking ``report to the
Chairman'' and inserting ``report to the head of the Division
of Trading and Markets''.
SEC. 408. INDEPENDENCE OF COMMISSION OMBUDSMAN.
Section 4(g)(8) of the Securities Exchange Act of 1934 (15 U.S.C.
78d(g)(8)) is amended--
(1) in subparagraph (A), by striking ``the Investor
Advocate shall appoint'' and all that follows through
``Investor Advocate'' and inserting ``the Chairman shall
appoint an Ombudsman, who shall report to the Commission''; and
(2) in subparagraph (D)--
(A) by striking ``report to the Investor Advocate''
and inserting ``report to the Commission''; and
(B) by striking the last sentence.
SEC. 409. COORDINATION WITH THE INVESTOR ADVISORY COMMITTEE.
Section 39 of the Securities Exchange Act of 1934 (15 U.S.C. 78pp)
is amended--
(1) in subsection (a)(2)(B), by striking ``submit'' and
inserting, ``in consultation with the Small Business Capital
Formation Advisory Committee established under section 40,
submit'';
(2) in subsection (b)(1)--
(A) in subparagraph (C), by striking ``and'';
(B) in subparagraph (D)(iv), by striking the period
at the end and inserting ``; and''; and
(C) by adding at the end the following:
``(E) a member of the Small Business Capital
Formation Advisory Committee who shall be a nonvoting
member.''; and
(3) by striking subsections (i) and (j).
SEC. 410. DUTIES OF INVESTOR ADVOCATE.
Section 4(g)(4) of the Securities Exchange Act of 1934 (15 U.S.C.
78d(g)(4)) is amended--
(1) in subparagraph (D)(ii), by striking ``and'';
(2) in subparagraph (E), by striking the period at the end
and inserting a semicolon; and
(3) by adding at the end the following:
``(F) not take a position on any legislation
pending before Congress other than a legislative change
proposed by the Investor Advocate pursuant to
subparagraph (E);
``(G) consult with the Advocate for Small Business
Capital Formation on proposed recommendations made
under subparagraph (E); and
``(H) advise the Advocate for Small Business
Capital Formation on issues related to small business
investors.''.
SEC. 411. INTERNAL RISK CONTROLS.
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
amended--
(1) by inserting after section 4G, as added by this Act,
the following:
``SEC. 4H. INTERNAL RISK CONTROLS.
``The Commission, in consultation with the Chief Economist, shall
develop comprehensive internal risk control mechanisms to safeguard and
govern the storage of all market data by the Commission, all market
data sharing agreements of the Commission, and all academic research
performed at the Commission using market data.''; and
(2) in section 3(a), by adding at the end the following:
``(81) Chief economist.--The term `Chief Economist' means
the Director of the Division of Economic and Risk Analysis, or
an employee of the Commission with comparable authority, as
determined by the Commission.''.
SEC. 412. APPLICABILITY OF NOTICE AND COMMENT REQUIREMENTS OF THE
ADMINISTRATIVE PROCEDURE ACT TO GUIDANCE VOTED ON BY THE
COMMISSION.
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
amended by inserting after section 4H, as added by this Act, the
following:
``SEC. 4I. APPLICABILITY OF NOTICE AND COMMENT REQUIREMENTS OF THE
ADMINISTRATIVE PROCEDURE ACT TO GUIDANCE VOTED ON BY THE
COMMISSION.
``The notice and comment requirements of section 553 of title 5,
United States Code, shall also apply with respect to any Commission
statement or guidance, including interpretive rules, general statements
of policy, or rules of Commission organization, procedure, or practice,
that has the effect of implementing, interpreting, or prescribing law
or policy and that is voted on by the Commission.''.
SEC. 413. PROCESS FOR CLOSING INVESTIGATIONS.
(a) In General.--Not later than 180 days after the date of the
enactment of this Act, the Securities and Exchange Commission shall
establish a process for closing investigations (including preliminary
or informal investigations) that is designed to ensure that the
Commission, in a timely manner--
(1) makes a determination of whether or not to institute an
administrative or judicial action in a matter or refer the
matter to the Attorney General for potential criminal
prosecution; and
(2) if the Commission determines not to institute such an
action or refer the matter to the Attorney General, informs the
persons who are the subject of the investigation that the
investigation is closed.
(b) Rule of Construction.--Nothing in this section shall be
construed to affect the authority of the Commission to re-open an
investigation if the Commission obtains new evidence after the
investigation is closed, subject to any applicable statute of
limitations.
SEC. 414. ENFORCEMENT OMBUDSMAN.
(a) In General.--Section 4 of the Securities Exchange Act of 1934
(15 U.S.C. 78d), as amended by this Act, is further amended by adding
at the end the following:
``(i) Enforcement Ombudsman.--
``(1) Establishment.--The Commission shall have an
Enforcement Ombudsman, who shall be appointed by and report
directly to the Commission.
``(2) Duties.--The Enforcement Ombudsman shall--
``(A) act as a liaison between the Commission and
any person who is the subject of an investigation
(including a preliminary or informal investigation) by
the Commission or an administrative or judicial action
brought by the Commission in resolving problems that
such persons may have with the Commission or the
conduct of Commission staff; and
``(B) establish safeguards to maintain the
confidentiality of communications between the persons
described in subparagraph (A) and the Enforcement
Ombudsman.
``(3) Limitation.--In carrying out the duties of the
Enforcement Ombudsman under paragraph (2), the Enforcement
Ombudsman shall utilize personnel of the Commission to the
extent practicable. Nothing in this subsection shall be
construed as replacing, altering, or diminishing the activities
of any ombudsman or similar office of any other agency.
``(4) Report.--The Enforcement Ombudsman shall submit to
the Commission and to the Committee on Financial Services of
the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate an annual report that
describes the activities and evaluates the effectiveness of the
Enforcement Ombudsman during the preceding year.''.
(b) Deadline for Initial Appointment.--The Securities and Exchange
Commission shall appoint the initial Enforcement Ombudsman under
subsection (i) of section 4 of the Securities Exchange Act of 1934, as
added by subsection (a), not later than 180 days after the date of the
enactment of this Act.
SEC. 415. PROCESS TO ENSURE ENFORCEMENT ACTIONS ARE WITHIN AUTHORITY OF
COMMISSION.
Not later than 180 days after the date of the enactment of this
Act, the Securities and Exchange Commission shall establish a process
to ensure that administrative and judicial actions brought by the
Commission under the securities laws (as defined in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a))) do not exceed the
authority of the Commission under such laws and, in the case of
administrative actions, are conducted consistently with subchapter II
of chapter 5 of title 5, United States Code (commonly referred to as
the ``Administrative Procedure Act'').
SEC. 416. PROCESS TO PERMIT RECIPIENT OF WELLS NOTIFICATION TO APPEAR
BEFORE COMMISSION STAFF IN-PERSON.
(a) In General.--Not later than 180 days after the date of the
enactment of this Act, the Securities and Exchange Commission shall
establish a process under which, in any instance in which the
Commission staff provides a written Wells notification to an individual
informing the individual that the Commission staff has made a
preliminary determination to recommend that the Commission bring an
administrative or judicial action against the individual, the
individual shall have the right to make an in-person presentation
before the Commission staff concerning such recommendation and to be
represented by counsel at such presentation, at the individual's own
expense.
(b) Attendance by Commissioners.--Such process shall provide that
each Commissioner of the Commission, or a designee of the Commissioner,
may attend any such presentation.
(c) Report by Commission Staff.--Such process shall provide that,
before any Commission vote on whether to bring the administrative or
judicial action against the individual, the Commission staff shall
provide to each Commissioner a written report on any such presentation,
including any factual or legal arguments made by the individual and any
supporting documents provided by the individual.
SEC. 417. PUBLICATION OF ENFORCEMENT MANUAL.
(a) In General.--Not later than 1 year after the date of the
enactment of this Act, the Securities and Exchange Commission shall
approve, by vote of the Commission, and publish an updated manual that
sets forth the policies and practices that the Commission will follow
in the enforcement of the securities laws (as defined in section 3(a)
of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))). Such manual
shall include policies and practices required by this Act, and by the
amendments made by this Act, and shall be developed so as to ensure
transparency in such enforcement and uniform application of such laws
by the Commission.
(b) Enforcement Plan and Report.--Beginning on the date that is one
year after the date of enactment of this Act, and each year thereafter,
and the Securities and Exchange Commission shall transmit to Congress
and publish on its Internet website an annual enforcement plan and
report that shall--
(1) detail the priorities of the Commission with regard to
enforcement and examination activities for the forthcoming
year;
(2) report on the Commission's enforcement and examination
activities for the previous year, including an assessment of
how such activities comported with the priorities identified
for that year pursuant to paragraph (1); and
(3) provide an opportunity and mechanism for public
comment.
SEC. 418. PRIVATE PARTIES AUTHORIZED TO COMPEL THE SECURITIES AND
EXCHANGE COMMISSION TO SEEK SANCTIONS BY FILING CIVIL
ACTIONS.
Title I of the Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.) is amended by adding at the end the following:
``SEC. 41. PRIVATE PARTIES AUTHORIZED TO COMPEL THE COMMISSION TO SEEK
SANCTIONS BY FILING CIVIL ACTIONS.
``(a) Termination of Administrative Proceeding.--In the case of any
person who is a party to a proceeding brought by the Commission under a
securities law, to which section 554 of title 5, United States Code,
applies, and against whom an order imposing a cease and desist order
and a penalty may be issued at the conclusion of the proceeding, that
person may, not later than 20 days after receiving notice of such
proceeding, and at that person's discretion, require the Commission to
terminate the proceeding.
``(b) Civil Action Authorized.--If a person requires the Commission
to terminate a proceeding pursuant to subsection (a), the Commission
may bring a civil action against that person for the same remedy that
might be imposed.
``(c) Standard of Proof in Administrative Proceeding.--
Notwithstanding any other provision of law, in the case of a proceeding
brought by the Commission under a securities law, to which section 554
of title 5, United States Code, applies, a legal or equitable remedy
may be imposed on the person against whom the proceeding was brought
only on a showing by the Commission of clear and convincing evidence
that the person has violated the relevant provision of law.''.
SEC. 419. CERTAIN FINDINGS REQUIRED TO APPROVE CIVIL MONEY PENALTIES
AGAINST ISSUERS.
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
amended by inserting after section 4E the following:
``SEC. 4F. CERTAIN FINDINGS REQUIRED TO APPROVE CIVIL MONEY PENALTIES
AGAINST ISSUERS.
``The Commission may not seek against or impose on an issuer a
civil money penalty for violation of the securities laws unless the
publicly available text of the order approving the seeking or
imposition of such penalty contains findings, supported by an analysis
by the Division of Economic and Risk Analysis and certified by the
Chief Economist, of whether--
``(1) the alleged violation resulted in direct economic
benefit to the issuer; and
``(2) the penalty will harm the shareholders of the
issuer.''.
SEC. 420. REPEAL OF AUTHORITY OF THE COMMISSION TO PROHIBIT PERSONS
FROM SERVING AS OFFICERS OR DIRECTORS.
(a) Under Securities Act of 1933.--Subsection (f) of section 8A of
the Securities Act of 1933 (15 U.S.C. 77h-1) is repealed.
(b) Under Securities Exchange Act of 1934.--Subsection (f) of
section 21C of the Securities Exchange Act of 1934 (15 U.S.C. 78u-3) is
repealed.
SEC. 421. SUBPOENA DURATION AND RENEWAL.
Section 21(b) of the Securities Exchange Act of 1934 (15 U.S.C.
78u(b)) is amended--
(1) by inserting ``Subpoena.-- '' after the enumerator;
(2) by striking ``For the purpose of'' and inserting the
following:
``(1) In general.--For the purpose of''; and
(3) by adding at the end the following:
``(2) Omnibus orders of investigation.--
``(A) Duration and renewal.--An omnibus order of
investigation shall not be for an indefinite duration
and may be renewed only by Commission action.
``(B) Definition.--In paragraph (A), the term
`omnibus order of investigation' means an order of the
Commission authorizing 1 of more members of the
Commission or its staff to issue subpoenas under
paragraph (1) to multiple persons in relation to a
particular subject matter area.''.
SEC. 422. ELIMINATION OF AUTOMATIC DISQUALIFICATIONS.
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), as
amended by this Act, is further amended by inserting after section 4F
the following:
``SEC. 4G. ELIMINATION OF AUTOMATIC DISQUALIFICATIONS.
``(a) In General.--Notwithstanding any other provision of law, a
non-natural person may not be disqualified or otherwise made ineligible
to use an exemption or registration provision, engage in an activity,
or qualify for any similar treatment under a provision of the
securities laws or the rules issued by the Commission under the
securities laws by reason of having, or a person described in
subsection (b) having, been convicted of any felony or misdemeanor or
made the subject of any judicial or administrative order, judgment, or
decree arising out of a governmental action (including an order,
judgment, or decree agreed to in a settlement), or having, or a person
described in subsection (b) having, been suspended or expelled from
membership in, or suspended or barred from association with a member
of, a registered national securities exchange or a registered national
or affiliated securities association for any act or omission to act
constituting conduct inconsistent with just and equitable principles of
trade, unless the Commission, by order, on the record after notice and
an opportunity for hearing, makes a determination that such non-natural
person should be so disqualified or otherwise made ineligible for
purposes of such provision.
``(b) Person Described.--A person is described in this subsection
if the person is--
``(1) a natural person who is a director, officer,
employee, partner, member, or shareholder of the non-natural
person referred to in subsection (a) or is otherwise associated
or affiliated with such non-natural person in any way; or
``(2) a non-natural person who is associated or affiliated
with the non-natural person referred to in subsection (a) in
any way.
``(c) Rule of Construction.--Nothing in this section shall be
construed to limit any authority of the Commission, by order, on the
record after notice and an opportunity for hearing, to prohibit a
person from using an exemption or registration provision, engaging in
an activity, or qualifying for any similar treatment under a provision
of the securities laws, or the rules issued by the Commission under the
securities laws, by reason of a circumstance referred to in subsection
(a) or any similar circumstance.''.
SEC. 423. CONFIDENTIALITY OF RECORDS OBTAINED FROM FOREIGN SECURITIES
AND LAW ENFORCEMENT AUTHORITIES.
Section 24(d) of the Securities Exchange Act of 1934 (15 U.S.C.
78x(d)) is amended to read as follows:
``(d) Records Obtained From Foreign Securities and Law Enforcement
Authorities.--Except as provided in subsection (g), the Commission
shall not be compelled to disclose records obtained from a foreign
securities authority, or from a foreign law enforcement authority as
defined in subsection (f)(4), if--
``(1) the foreign securities authority or foreign law
enforcement authority has in good faith determined and
represented to the Commission that the records are confidential
under the laws of the country of such authority; and
``(2) the Commission obtains such records pursuant to--
``(A) such procedure as the Commission may
authorize for use in connection with the administration
or enforcement of the securities laws; or
``(B) a memorandum of understanding.
For purposes of section 552 of title 5, United States Code, this
subsection shall be considered a statute described in subsection
(b)(3)(B) of such section 552.''.
SEC. 424. CLARIFICATION OF AUTHORITY TO IMPOSE SANCTIONS ON PERSONS
ASSOCIATED WITH A BROKER OR DEALER.
Section 15(b)(6)(A)(i) of the Securities Exchange Act of 1934 (15
U.S.C. 78o(b)(6)(A)(i)) is amended by striking ``enumerated'' and all
that follows and inserting ``enumerated in subparagraph (A), (D), (E),
(G), or (H) of paragraph (4) of this subsection;''.
SEC. 425. CONGRESSIONAL ACCESS TO INFORMATION HELD BY THE PUBLIC
COMPANY ACCOUNTING OVERSIGHT BOARD.
Section 105(b)(5) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
7215(b)(5)) is amended--
(1) in subparagraph (A), by striking ``subparagraphs (B)
and (C)'' and inserting ``subparagraphs (B), (C) and (D)''; and
(2) by adding at the end the following:
``(D) Availability to the congressional
committees.--The Board shall make available to the
Committees specified under section 101(h)--
``(i) such information as the Committees
shall request; and
``(ii) with respect to any confidential or
privileged information provided in response to
a request under clause (i), including any
information subject to section 104(g) and
subparagraph (A), or any confidential or
privileged information provided orally in
response to such a request, such information
shall maintain the protections provided in
subparagraph (A), and shall retain its
confidential and privileged status in the hands
of the Board and the Committees.''.
SEC. 426. REPEAL OF REQUIREMENT FOR PUBLIC COMPANY ACCOUNTING OVERSIGHT
BOARD TO USE CERTAIN FUNDS FOR MERIT SCHOLARSHIP PROGRAM.
(a) In General.--Section 109(c) of the Sarbanes-Oxley Act of 2002
(15 U.S.C. 7219(c)) is amended by striking paragraph (2).
(b) Conforming Amendments.--Section 109 of the Sarbanes-Oxley Act
of 2002 (15 U.S.C. 7219) is amended--
(1) in subsection (c), by striking ``Uses of Funds'' and
all that follows through ``The budget'' and inserting ``Uses of
Funds.--The budget''; and
(2) in subsection (f), by striking ``subsection (c)(1)''
and inserting ``subsection (c)''.
SEC. 427. REALLOCATION OF FINES FOR VIOLATIONS OF RULES OF MUNICIPAL
SECURITIES RULEMAKING BOARD.
(a) In General.--Section 15B(c)(9) of the Securities Exchange Act
of 1934 (15 U.S.C. 78o-4(c)(9)) is amended to read as follows:
``(9) Fines collected for violations of the rules of the Board
shall be deposited and credited as general revenue of the Treasury,
except as otherwise provided in section 308 of the Sarbanes-Oxley Act
of 2002 or section 21F of this title.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to fines collected after the date of enactment of this Act.
Subtitle B--Eliminating Excessive Government Intrusion in the Capital
Markets
SEC. 441. REPEAL OF DEPARTMENT OF LABOR FIDUCIARY RULE AND REQUIREMENTS
PRIOR TO RULEMAKING RELATING TO STANDARDS OF CONDUCT FOR
BROKERS AND DEALERS.
(a) Repeal of Department of Labor Fiduciary Rule.--The final rule
of the Department of Labor titled ``Definition of the Term `Fiduciary';
Conflict of Interest Rule--Retirement Investment Advice'' and related
prohibited transaction exemptions published April 8, 2016 (81 Fed. Reg.
20946) shall have no force or effect.
(b) Stay on Rules Defining Certain Fiduciaries.--After the date of
enactment of this Act, the Secretary of Labor shall not prescribe any
regulation under the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1001 et seq.) defining the circumstances under which an
individual is considered a fiduciary until the date that is 60 days
after the Securities and Exchange Commission issues a final rule
relating to standards of conduct for brokers and dealers pursuant to
the second subsection (k) of section 15 of the Securities Exchange Act
of 1934 (15 U.S.C. 78o(k))
(c) Requirements Prior to Rulemaking Relating to Standards of
Conduct for Brokers and Dealers.--The second subsection (k) of section
15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o(k)), as added
by section 913(g)(1) of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (12 U.S.C. 5301 et seq.), is amended by adding at the
end the following:
``(3) Requirements prior to rulemaking.--The Commission
shall not promulgate a rule pursuant to paragraph (1) before
providing a report to the Committee on Financial Services of
the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate describing whether--
``(A) retail investors (and such other customers as
the Commission may provide) are being harmed due to
brokers or dealers operating under different standards
of conduct than those that apply to investment advisors
under section 211 of the Investment Advisers Act of
1940 (15 U.S.C. 80b-11);
``(B) alternative remedies will reduce any
confusion or harm to retail investors due to brokers or
dealers operating under different standards of conduct
than those standards that apply to investment advisors
under section 211 of the Investment Advisers Act of
1940 (15 U.S.C. 80b-11), including--
``(i) simplifying the titles used by
brokers, dealers, and investment advisers; and
``(ii) enhancing disclosure surrounding the
different standards of conduct currently
applicable to brokers, dealers, and investment
advisers;
``(C) the adoption of a uniform fiduciary standard
of conduct for brokers, dealers, and investment
advisors would adversely impact the commissions of
brokers and dealers, the availability of proprietary
products offered by brokers and dealers, and the
ability of brokers and dealers to engage in principal
transactions with customers; and
``(D) the adoption of a uniform fiduciary standard
of conduct for brokers or dealers and investment
advisors would adversely impact retail investor access
to personalized and cost-effective investment advice,
recommendations about securities, or the availability
of such advice and recommendations.
``(4) Economic analysis.--The Commission's conclusions
contained in the report described in paragraph (3) shall be
supported by economic analysis.
``(5) Requirements for promulgating a rule.--The Commission
shall publish in the Federal Register alongside the rule
promulgated pursuant to paragraph (1) formal findings that such
rule would reduce confusion or harm to retail customers (and
such other customers as the Commission may by rule provide) due
to different standards of conduct applicable to brokers,
dealers, and investment advisors.
``(6) Requirements under investment advisers act of 1940.--
In proposing rules under paragraph (1) for brokers or dealers,
the Commission shall consider the differences in the
registration, supervision, and examination requirements
applicable to brokers, dealers, and investment advisors.''.
SEC. 442. EXEMPTION FROM RISK RETENTION REQUIREMENTS FOR NONRESIDENTIAL
MORTGAGE.
(a) In General.--Section 15G of the Securities Exchange Act of 1934
(15 U.S.C. 78o-11) is amended--
(1) in subsection (a)--
(A) in paragraph (3)(B), by striking ``and'' at the
end;
(B) in paragraph (4)(B), by striking the period and
inserting ``; and''; and
(C) by adding at the end the following:
``(5) the term `asset-backed security' refers only to an
asset-backed security that is comprised wholly of residential
mortgages.'';
(2) in subsection (b)--
(A) by striking paragraph (1); and
(B) by striking ``(2) Residential mortgages'';
(3) by striking subsection (h) and redesignating subsection
(i) as subsection (h); and
(4) in subsection (h) (as so redesignated)--
(A) by striking ``effective--'' and all that
follows through ``(1) with respect to'' and inserting
``effective with respect to'';
(B) in paragraph (1), by striking ``; and'' and
inserting a period; and
(C) by striking paragraph (2).
(b) Conforming Amendment.--Section 941 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act is amended by striking
subsection (c).
SEC. 443. FREQUENCY OF SHAREHOLDER APPROVAL OF EXECUTIVE COMPENSATION.
Section 14A(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78n-1(a)) is amended--
(1) in paragraph (1), by striking ``Not less frequently
than once every 3 years'' and inserting ``Each year in which
there has been a material change to the compensation of
executives of an issuer from the previous year''; and
(2) by striking paragraph (2) and redesignating paragraph
(3) as paragraph (2).
SEC. 444. REQUIREMENT FOR MUNICIPAL ADVISOR FOR ISSUERS OF MUNICIPAL
SECURITIES.
Section 15B(d) of the Securities Exchange Act of 1934 (15 U.S.C.
78o-4(d)) is amended by adding at the end the following:
``(3) An issuer of municipal securities shall not be required to
retain a municipal advisor prior to issuing any such securities.''.
SEC. 445. SMALL ISSUER EXEMPTION FROM INTERNAL CONTROL EVALUATION.
Section 404(c) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
7262(c)) is amended to read as follows:
``(c) Exemption for Smaller Issuers.--Subsection (b) shall not
apply with respect to any audit report prepared for an issuer that has
total market capitalization of less than $250,000,000, nor to any
issuer that is a depository institution with assets of less than
$1,000,000,000.''.
SEC. 446. EXEMPTIVE AUTHORITY FOR CERTAIN PROVISIONS RELATING TO
REGISTRATION OF NATIONALLY RECOGNIZED STATISTICAL RATING
ORGANIZATIONS.
Section 15E of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
7) is amended by adding at the end the following:
``(w) Commission Exemptive Authority.--The Commission, by rules and
regulations upon its own motion, or by order upon application, may
conditionally or unconditionally exempt any person from any provision
or provisions of this title or of any rule or regulation thereunder, if
and to the extent it determines that such rule, regulation, or
requirement is creating a barrier to entry into the market for
nationally recognized statistical rating organizations or impeding
competition among such organizations, or that such an exemption is
necessary or appropriate in the public interest and is consistent with
the protection of investors.''.
SEC. 447. RESTRICTION ON RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.
Section 10D(b)(2) of the Securities Exchange Act of 1934 (15 U.S.C.
78j-4(b)(2)) is amended by inserting before the period the following:
``, where such executive officer had control or authority over the
financial reporting that resulted in the accounting restatement''.
SEC. 448. RISK-BASED EXAMINATIONS OF NATIONALLY RECOGNIZED STATISTICAL
RATING ORGANIZATIONS.
Section 15E(p)(3)(B) of the Securities Exchange Act of 1934 (15
U.S.C. 78o-7(p)(3)(B)) is amended in the matter preceding clause (i),
by inserting ``, as appropriate,'' after ``Each examination under
subparagraph (A) shall include''.
SEC. 449. REPEALS.
(a) Repeals.--The following provisions of title IX of the Dodd-
Frank Wall Street Reform and Consumer Protection Act are repealed, and
the provisions of law amended or repealed by such sections are restored
or revived as if such sections had not been enacted:
(1) Section 912.
(2) Section 914.
(3) Section 917.
(4) Section 918.
(5) Section 919A.
(6) Section 919B.
(7) Section 919C.
(8) Section 921.
(9) Section 929T.
(10) Section 929X.
(11) Section 929Y.
(12) Section 929Z.
(13) Section 931.
(14) Section 933.
(15) Section 937.
(16) Section 939B.
(17) Section 939C.
(18) Section 939D.
(19) Section 939E.
(20) Section 939F.
(21) Section 939G.
(22) Section 939H.
(23) Section 946.
(24) Subsection (b) of section 953.
(25) Section 955.
(26) Section 956.
(27) Section 964.
(28) Section 965.
(29) Section 968.
(30) Section 971.
(31) Section 972.
(32) Section 976.
(33) Section 977.
(34) Section 978.
(35) Section 984.
(36) Section 989.
(37) Section 989A.
(38) Section 989F.
(39) Subsection (b) of section 989G.
(40) Section 989I.
(b) Conforming Amendments.--The Dodd-Frank Wall Street Reform and
Consumer Protection Act (12 U.S.C. 5301) is amended--
(1) in the table of contents in section 1(b), by striking
the items relating to the sections described under paragraphs
(1) through (23), (25) through (38), and (40) of subsection
(a);
(2) in section 953, by striking ``(a) Disclosure of Pay
Versus Performance.--''; and
(3) in section 989G, by striking ``(a) Exemption.--''.
SEC. 450. EXEMPTION OF AND REPORTING BY PRIVATE EQUITY FUND ADVISERS.
Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
3) is amended by adding at the end the following:
``(o) Exemption of and Reporting by Private Equity Fund Advisers.--
``(1) In general.--Except as provided in this subsection,
no investment adviser shall be subject to the registration or
reporting requirements of this title with respect to the
provision of investment advice relating to a private equity
fund.
``(2) Maintenance of records and access by commission.--Not
later than 6 months after the date of enactment of this
subsection, the Commission shall issue final rules--
``(A) to require investment advisers described in
paragraph (1) to maintain such records and provide to
the Commission such annual or other reports as the
Commission, taking into account fund size, governance,
investment strategy, risk, and other factors,
determines necessary and appropriate in the public
interest and for the protection of investors; and
``(B) to define the term `private equity fund' for
purposes of this subsection.''.
SEC. 451. RECORDS AND REPORTS OF PRIVATE FUNDS.
The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is
amended--
(1) in section 204(b)--
(A) in paragraph (1)--
(i) in subparagraph (A), by striking
``investors,'' and all that follows and
inserting ``investors.'';
(ii) by striking subparagraph (B); and
(iii) by striking ``this title--'' and all
that follows through ``to maintain'' and
inserting ``this title to maintain'';
(B) in paragraph (3)(H)--
(i) by striking ``, in consultation with
the Council,''; and
(ii) by striking ``or for the assessment of
systemic risk'';
(C) in paragraph (4), by striking ``, or for the
assessment of systemic risk'';
(D) in paragraph (5), by striking ``or for the
assessment of systemic risk'';
(E) in paragraph (6)(A)(ii), by striking ``, or for
the assessment of systemic risk'';
(F) by striking paragraph (7) and redesignating
paragraphs (8) through (11) as paragraphs (7) through
(10), respectively; and
(G) in paragraph (8) (as so redesignated), by
striking ``paragraph (8)'' and inserting ``paragraph
(7)''; and
(2) in section 211(e)--
(A) by striking ``after consultation with the
Council but''; and
(B) by striking ``subsection 204(b)'' and inserting
``section 204(b)''.
SEC. 452. DEFINITION OF ACCREDITED INVESTOR.
(a) In General.--Section 2(a)(15) of the Securities Act of 1933 (15
U.S.C. 77b(a)(15)) is amended--
(1) by redesignating clauses (i) and (ii) as subparagraphs
(A) and (F), respectively; and
(2) in subparagraph (A) (as so redesignated), by striking
``; or'' and inserting a semicolon, and inserting after such
subparagraph the following:
``(B) any natural person whose individual net
worth, or joint net worth with that person's spouse,
exceeds $1,000,000 (which amount, along with the
amounts set forth in subparagraph (C), shall be
adjusted for inflation by the Commission every 5 years
to the nearest $10,000 to reflect the change in the
Consumer Price Index for All Urban Consumers published
by the Bureau of Labor Statistics) where, for purposes
of calculating net worth under this subparagraph--
``(i) the person's primary residence shall
not be included as an asset;
``(ii) indebtedness that is secured by the
person's primary residence, up to the estimated
fair market value of the primary residence at
the time of the sale of securities, shall not
be included as a liability (except that if the
amount of such indebtedness outstanding at the
time of sale of securities exceeds the amount
outstanding 60 days before such time, other
than as a result of the acquisition of the
primary residence, the amount of such excess
shall be included as a liability); and
``(iii) indebtedness that is secured by the
person's primary residence in excess of the
estimated fair market value of the primary
residence at the time of the sale of securities
shall be included as a liability;
``(C) any natural person who had an individual
income in excess of $200,000 in each of the 2 most
recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income
level in the current year;
``(D) any natural person who is currently licensed
or registered as a broker or investment adviser by the
Commission, the Financial Industry Regulatory
Authority, or an equivalent self-regulatory
organization (as defined in section 3(a)(26) of the
Securities Exchange Act of 1934), or the securities
division of a State or the equivalent State division
responsible for licensing or registration of
individuals in connection with securities activities;
``(E) any natural person the Commission determines,
by regulation, to have demonstrable education or job
experience to qualify such person as having
professional knowledge of a subject related to a
particular investment, and whose education or job
experience is verified by the Financial Industry
Regulatory Authority or an equivalent self-regulatory
organization (as defined in section 3(a)(26) of the
Securities Exchange Act of 1934); or''.
(b) Repeal.--
(1) In general.--Section 413 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (Public Law 111-203) is
hereby repealed.
(2) Clerical amendment.--The table of contents in section
1(b) of the Dodd-Frank Wall Street Reform and Consumer
Protection Act is amended by striking the items relating to
section 413.
SEC. 453. REPEAL OF CERTAIN PROVISIONS REQUIRING A STUDY AND REPORT TO
CONGRESS.
(a) Repeal.--The following provisions of the Dodd-Frank Wall Street
Reform and Consumer Protection Act are repealed:
(1) Section 412.
(2) Section 415.
(3) Section 416.
(4) Section 417.
(b) Clerical Amendment.--The table of contents in section 1(b) of
the Dodd-Frank Wall Street Reform and Consumer Protection Act is
amended by striking the items relating to sections 412, 415, 416, and
417.
SEC. 454. TECHNICAL CORRECTION.
Section 224 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
18c) is amended by striking ``commodities'' and inserting
``commodity''.
SEC. 455. REPEAL.
(a) Repeal.--The following sections of title XV of the Dodd-Frank
Wall Street Reform and Consumer Protection Act are repealed, and the
provisions of law amended or repealed by such sections are restored or
revived as if such sections had not been enacted:
(1) Section 1502.
(2) Section 1503.
(3) Section 1504.
(4) Section 1505.
(5) Section 1506.
(b) Clerical Amendment.--The table of contents in section 1(b) of
the Dodd-Frank Wall Street Reform and Consumer Protection Act is
amended by striking the items relating to sections 1502, 1503, 1504,
1505, and 1506.
Subtitle C--Commodity Futures Trading Commission Reforms
SEC. 461. DIVISION DIRECTORS.
Section 2(a)(6)(C) of the Commodity Exchange Act (7 U.S.C.
2(a)(6)(C)) is amended by inserting ``, and the heads of the units
shall serve at the pleasure of the Commission'' before the period.
SEC. 462. PROCEDURES GOVERNING ACTIONS TAKEN BY COMMISSION STAFF.
Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 2(a)(12))
is amended--
(1) by striking ``(12) The'' and inserting the following:
``(12) Rules and regulations.--
``(A) In general.--Subject to the other provisions
of this paragraph, the''; and
(2) by adding after and below the end the following new
subparagraph:
``(B) Notice to commissioners.--The Commission
shall develop and publish internal procedures governing
the issuance by any division or office of the
Commission of any response to a formal, written request
or petition from any member of the public for an
exemptive, a no-action, or an interpretive letter and
such procedures shall provide that the commissioners be
provided with the final version of the matter to be
issued with sufficient notice to review the matter
prior to its issuance.''.
SEC. 463. STRATEGIC TECHNOLOGY PLAN.
Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)), is
amended by adding at the end the following:
``(16) Strategic technology plan.--
``(A) In general.--Every 5 years, the Commission
shall develop and submit to the Committee on
Agriculture of the House of Representatives and the
Committee on Agriculture, Nutrition, and Forestry of
the Senate a detailed plan focused on the acquisition
and use of technology by the Commission.
``(B) Contents.--The plan shall--
``(i) include for each related division or
office a detailed technology strategy focused
on market surveillance and risk detection,
market data collection, aggregation,
interpretation, standardization, harmonization,
normalization, validation, streamlining or
other data analytic processes, and internal
management and protection of data collected by
the Commission, including a detailed accounting
of how the funds provided for technology will
be used and the priorities that will apply in
the use of the funds;
``(ii) set forth annual goals to be
accomplished and annual budgets needed to
accomplish the goals; and
``(iii) include a summary of any plan of
action and milestones to address any known
information security vulnerability, as
identified pursuant to a widely accepted
industry or Government standard, including--
``(I) specific information about
the industry or Government standard
used to identify the known information
security vulnerability;
``(II) a detailed time line with
specific deadlines for addressing the
known information security
vulnerability; and
``(III) an update of any such time
line and the rationale for any
deviation from the time line.''.
SEC. 464. INTERNAL RISK CONTROLS.
(a) In General.--Section 2(a)(12) of the Commodity Exchange Act (7
U.S.C. 2(a)(12)), as amended by section 462, is further amended by
adding at the end the following:
``(C) Internal risk controls.--The Commission, in
consultation with the Chief Economist, shall develop
comprehensive internal risk control mechanisms to
safeguard and govern the storage of all market data by
the Commission, all market data sharing agreements of
the Commission, and all academic research performed at
the Commission using market data.''.
(b) Definition of Chief Economist.--Section 1a of the Commodity
Exchange Act (7 U.S.C. 1a) is amended--
(1) by redesignating paragraphs (8) through (51) as
paragraphs (9) through (52); and
(2) by inserting after paragraph (7) the following:
``(8) Chief economist.--The term `Chief Economist' means
the Chief Economist of the Commission, or an employee of the
Commission with comparable authority, as determined by the
Commission.''.
SEC. 465. SUBPOENA DURATION AND RENEWAL.
Section 6(c)(5) of the Commodity Exchange Act (7 U.S.C. 9(5)) is
amended--
(1) by striking ``For the purpose of securing'' and
inserting the following:
``(A) In general.--For the purpose of securing'';
and
(2) by adding after and below the end the following:
``(B) Omnibus orders of investigation.--
``(i) Duration and renewal.--An omnibus
order of investigation shall not be for an
indefinite duration and may be renewed only by
Commission action.
``(ii) Definition.--In clause (i), the term
`omnibus order of investigation' means an order
of the Commission authorizing 1 of more members
of the Commission or its staff to issue
subpoenas under subparagraph (A) to multiple
persons in relation to a particular subject
matter area.''.
SEC. 466. APPLICABILITY OF NOTICE AND COMMENT REQUIREMENTS OF THE
ADMINISTRATIVE PROCEDURE ACT TO GUIDANCE VOTED ON BY THE
COMMISSION.
Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 2(a)(12)),
as amended by section 464, is further amended by adding at the end the
following:
``(D) Applicability of notice and comment rules to
guidance voted on by the commission.--The notice and
comment requirements of section 553 of title 5, United
States Code, shall also apply with respect to any
Commission statement or guidance, including
interpretive rules, general statements of policy, or
rules of Commission organization, procedure, or
practice, that has the effect of implementing,
interpreting or prescribing law or policy and that is
voted on by the Commission.''.
SEC. 467. JUDICIAL REVIEW OF COMMISSION RULES.
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
adding at the end the following:
``SEC. 24. JUDICIAL REVIEW OF COMMISSION RULES.
``(a) A person adversely affected by a rule of the Commission
promulgated under this Act may obtain review of the rule in the United
States Court of Appeals for the District of Columbia Circuit or the
United States Court of Appeals for the circuit where the party resides
or has the principal place of business, by filing in the court, within
60 days after publication in the Federal Register of the entry of the
rule, a written petition requesting that the rule be set aside.
``(b) A copy of the petition shall be transmitted forthwith by the
clerk of the court to an officer designated by the Commission for that
purpose. Thereupon the Commission shall file in the court the record on
which the rule complained of is entered, as provided in section 2112 of
title 28, United States Code, and the Federal Rules of Appellate
Procedure.
``(c) On the filing of the petition, the court has jurisdiction,
which becomes exclusive on the filing of the record, to affirm and
enforce or to set aside the rule in whole or in part.
``(d) The court shall affirm and enforce the rule unless the
Commission's action in promulgating the rule is found to be arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with
law; contrary to constitutional right, power, privilege, or immunity;
in excess of statutory jurisdiction, authority, or limitations, or
short of statutory right; or without observance of procedure required
by law.''.
SEC. 468. CROSS-BORDER REGULATION OF DERIVATIVES TRANSACTIONS.
(a) Rulemaking Required.--Within 1 year after the date of the
enactment of this subtitle, the Commodity Futures Trading Commission
shall issue a rule that addresses--
(1) the nature of the connections to the United States that
require a non-United States person to register as a swap dealer
or a major swap participant under the Commodity Exchange Act
and the regulations issued under such Act;
(2) which of the United States swaps requirements apply to
the swap activities of non-United States persons and United
States persons and their branches, agencies, subsidiaries, and
affiliates outside of the United States, and the extent to
which the requirements apply; and
(3) the circumstances under which a United States person or
non-United States person in compliance with the swaps
regulatory requirements of a foreign jurisdiction shall be
exempt from United States swaps requirements.
(b) Content of the Rule.--
(1) Criteria.--In the rule, the Commission shall establish
criteria for determining that 1 or more categories of the swaps
regulatory requirements of a foreign jurisdiction are
comparable to and as comprehensive as United States swaps
requirements. The criteria shall include--
(A) the scope and objectives of the swaps
regulatory requirements of the foreign jurisdiction;
(B) the effectiveness of the supervisory compliance
program administered;
(C) the enforcement authority exercised by the
foreign jurisdiction; and
(D) such other factors as the Commission, by rule,
determines to be necessary or appropriate in the public
interest.
(2) Comparability.--In the rule, the Commission shall--
(A) provide that any non-United States person or
any transaction between 2 non-United States persons
shall be exempt from United States swaps requirements
if the person or transaction is in compliance with the
swaps regulatory requirements of a foreign jurisdiction
which the Commission has determined to be comparable to
and as comprehensive as United States swaps
requirements; and
(B) set forth the circumstances in which a United
States person or a transaction between a United States
person and a non-United States person shall be exempt
from United States swaps requirements if the person or
transaction is in compliance with the swaps regulatory
requirements of a foreign jurisdiction which the
Commission has determined to be comparable to and as
comprehensive as United States swaps requirements.
(3) Outcomes-based comparison.--In developing and applying
the criteria, the Commission shall emphasize the results and
outcomes of, rather than the design and construction of,
foreign swaps regulatory requirements.
(4) Risk-based rulemaking.--In the rule, the Commission
shall not take into account, for the purposes of determining
the applicability of United States swaps requirements, the
location of personnel that arrange, negotiate, or execute
swaps.
(5) Preservation of antifraud and antimanipulation
authority.--No part of any rulemaking under this section shall
limit the Commission's antifraud or antimanipulation authority.
(c) Application of the Rule.--
(1) Assessments of foreign jurisdictions.--Beginning on the
date on which a final rule is issued under this section, the
Commission shall begin to assess the swaps regulatory
requirements of foreign jurisdictions, in the order the
Commission determines appropriate, in accordance with the
criteria established pursuant to subsection (b)(1). Following
each assessment, the Commission shall determine, by rule or by
order, whether the swaps regulatory requirements of the foreign
jurisdiction are comparable to and as comprehensive as United
States swaps requirements.
(2) Substituted compliance for unassessed major markets.--
Beginning 18 months after the date of enactment of this Act--
(A) the swaps regulatory requirements of each of
the 8 foreign jurisdictions with the largest swaps
markets, as calculated by notional value during the 12-
month period ending with such date of enactment, except
those with respect to which a determination has been
made under paragraph (1), shall be considered to be
comparable to and as comprehensive as United States
swaps requirements; and
(B) a non-United States person or a transaction
between 2 non-United States persons shall be exempt
from United States swaps requirements if the person or
transaction is in compliance with the swaps regulatory
requirements of any of such unexcepted foreign
jurisdictions.
(3) Suspension of substituted compliance.--If the
Commission determines, by rule or by order, that--
(A) the swaps regulatory requirements of a foreign
jurisdiction are not comparable to and as comprehensive
as United States swaps requirements, using the
categories and criteria established under subsection
(b)(1);
(B) the foreign jurisdiction does not exempt from
its swaps regulatory requirements United States persons
who are in compliance with United States swaps
requirements; or
(C) the foreign jurisdiction is not providing
equivalent recognition of, or substituted compliance
for, registered entities (as defined in section 1a(41)
of the Commodity Exchange Act) domiciled in the United
States,
the Commission may suspend, in whole or in part, a
determination made under paragraph (1) or a consideration
granted under paragraph (2).
(d) Petition for Review of Foreign Jurisdiction Practices.--A
registered entity, commercial market participant (as defined in section
1a(7) of the Commodity Exchange Act), or Commission registrant (within
the meaning of such Act) who petitions the Commission to make or change
a determination under subsection (c)(1) or (c)(3) of this section shall
be entitled to expedited consideration of the petition. A petition
shall include any evidence or other supporting materials to justify why
the petitioner believes the Commission should make or change the
determination. Petitions under this section shall be considered by the
Commission any time following the enactment of this Act. Within 180
days after receipt of a petition for a rulemaking under this section,
the Commission shall take final action on the petition. Within 90 days
after receipt of a petition to issue an order or change an order issued
under this section, the Commission shall take final action on the
petition.
(e) Report to Congress.--If the Commission makes a determination
described in this section through an order, the Commission shall
articulate the basis for the determination in a written report
published in the Federal Register and transmitted to the Committee on
Agriculture of the House of Representatives and Committee on
Agriculture, Nutrition, and Forestry of the Senate within 15 days of
the determination. The determination shall not be effective until 15
days after the committees receive the report.
(f) Definitions.--As used in this section and for purposes of the
rules issued pursuant to this section, the following definitions apply:
(1) United states person.--The term ``United States
person''--
(A) means--
(i) any natural person resident in the
United States;
(ii) any partnership, corporation, trust,
or other legal person organized or incorporated
under the laws of the United States or having
its principal place of business in the United
States;
(iii) any account (whether discretionary or
non-discretionary) of a United States person;
and
(iv) any other person as the Commission may
further define to more effectively carry out
the purposes of this section; and
(B) does not include the International Monetary
Fund, the International Bank for Reconstruction and
Development, the Inter-American Development Bank, the
Asian Development Bank, the African Development Bank,
the United Nations, their agencies or pension plans, or
any other similar international organizations or their
agencies or pension plans.
(2) United states swaps requirements.--The term ``United
States swaps requirements'' means the provisions relating to
swaps contained in the Commodity Exchange Act (7 U.S.C. 1a et
seq.) that were added by title VII of the Dodd-Frank Wall
Street Reform and Consumer Protection Act (15 U.S.C. 8301 et
seq.) and any rules or regulations prescribed by the Commodity
Futures Trading Commission pursuant to such provisions.
(3) Foreign jurisdiction.--The term ``foreign
jurisdiction'' means any national or supranational political
entity with common rules governing swaps transactions.
(4) Swaps regulatory requirements.--The term ``swaps
regulatory requirements'' means any provisions of law, and any
rules or regulations pursuant to the provisions, governing
swaps transactions or the counterparties to swaps transactions.
(g) Conforming Amendment.--Section 4(c)(1)(A) of the Commodity
Exchange Act (7 U.S.C. 6(c)(1)(A)) is amended by inserting ``or except
as necessary to effectuate the purposes of the Commodity End-User
Relief Act,'' after ``to grant exemptions,''.
Subtitle D--Harmonization of Derivatives Rules
SEC. 471. AGENCY REVIEW AND HARMONIZATION OF RULES RELATING TO THE
REGULATION OF OVER-THE-COUNTER SWAPS MARKETS.
The Securities and Exchange Commission and the Commodity Futures
Trading Commission shall review each rule, order, and interpretive
guidance issued by either such Commission pursuant to title VII of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C.
8301 et seq.) and, where the Commissions find inconsistencies in any
such rules, orders, or interpretive guidance, shall jointly issue new
rules, orders, or interpretive guidance to resolve such
inconsistencies.
TITLE V--IMPROVING INSURANCE COORDINATION THROUGH AN INDEPENDENT
ADVOCATE
SEC. 501. REPEAL OF THE FEDERAL INSURANCE OFFICE; CREATION OF THE
OFFICE OF THE INDEPENDENT INSURANCE ADVOCATE.
(a) Establishment.--Section 313 of title 31, United States Code, is
amended to read as follows:
``Sec. 313. Office of the Independent Insurance Advocate
``(a) Establishment.--There is established in the Department of the
Treasury a bureau to be known as the Office of the Independent
Insurance Advocate (in this section referred to as the `Office').
``(b) Independent Insurance Advocate.--
``(1) Establishment of position.--The chief officer of the
Office of the Independent Insurance Advocate shall be known as
the Independent Insurance Advocate. The Independent Insurance
Advocate shall perform the duties of such office under the
general direction of the Secretary of the Treasury.
``(2) Appointment.--The Independent Insurance Advocate
shall be appointed by the President, by and with the advice and
consent of the Senate, from among persons having insurance
expertise.
``(3) Term.--
``(A) In general.--The Independent Insurance
Advocate shall serve a term of 6 years, unless sooner
removed by the President upon reasons which shall be
communicated to the Senate.
``(B) Service after expiration.--If a successor is
not nominated and confirmed by the end of the term of
service of the Independent Insurance Advocate, the
person serving as Independent Insurance Advocate shall
continue to serve until such time a successor is
appointed and confirmed.
``(C) Vacancy.--An Independent Insurance Advocate
who is appointed to serve the remainder of a
predecessor's uncompleted term shall be eligible
thereafter to be appointed to a full 6 year term.
``(D) Acting official on financial stability
oversight council.--In the event of a vacancy in the
office of the Independent Insurance Advocate, and
pending the appointment and confirmation of a
successor, or during the absence or disability of the
Independent Insurance Advocate, the Independent Member
shall appoint a federal official appointed by the
President and confirmed by the Senate from a member
agency of the Financial Stability Oversight Council,
not otherwise serving on the Council, who shall serve
as a member of the Council and act in the place of the
Independent Insurance Advocate until such vacancy,
absence, or disability concludes.
``(4) Employment.--The Independent Insurance Advocate shall
be an employee of the Federal Government within the definition
of employee under section 2105 of title 5, United States Code.
``(c) Independence; Oversight.--
``(1) Independence.--The Secretary of the Treasury may not
delay or prevent the issuance of any rule or the promulgation
of any regulation by the Independent Insurance Advocate, and
may not intervene in any matter or proceeding before the
Independent Insurance Advocate, unless otherwise specifically
provided by law.
``(2) Oversight by inspector general.--The Office of the
Independent Insurance Advocate shall be an office in the
establishment of the Department of the Treasury for purposes of
the Inspector General Act of 1978 (5 U.S.C. App.).
``(d) Retention of Existing State Regulatory Authority.--Nothing in
this section or section 314 shall be construed to establish or provide
the Office or the Department of the Treasury with general supervisory
or regulatory authority over the business of insurance.
``(e) Budget.--
``(1) Annual transmittal.--For each fiscal year, the
Independent Insurance Advocate shall transmit a budget estimate
and request to the Secretary of the Treasury, which shall
specify the aggregate amount of funds requested for such fiscal
year for the operations of the Office of the Independent
Insurance Advocate.
``(2) Inclusions.--In transmitting the proposed budget to
the President for approval, the Secretary of the Treasury shall
include--
``(A) an aggregate request for the Independent
Insurance Advocate; and
``(B) any comments of the Independent Insurance
Advocate with respect to the proposal.
``(3) President's budget.--The President shall include in
each budget of the United States Government submitted to the
Congress--
``(A) a separate statement of the budget estimate
prepared in accordance with paragraph (1);
``(B) the amount requested by the President for the
Independent Insurance Advocate; and
``(C) any comments of the Independent Insurance
Advocate with respect to the proposal if the
Independent Insurance Advocate concludes that the
budget submitted by the President would substantially
inhibit the Independent Insurance Advocate from
performing the duties of the office.
``(f) Assistance.--The Secretary of the Treasury shall provide the
Independent Insurance Advocate such services, funds, facilities and
other support services as the Independent Insurance Advocate may
request and as the Secretary may approve.
``(g) Personnel.--
``(1) Employees.--The Independent Insurance Advocate may
fix the number of, and appoint and direct, the employees of the
Office, in accordance with the applicable provisions of title
5, United States Code. The Independent Insurance Advocate is
authorized to employ attorneys, analysts, economists, and other
employees as may be deemed necessary to assist the Independent
Insurance Advocate to carry out the duties and functions of the
Office. Unless otherwise provided expressly by law, any
individual appointed under this paragraph shall be an employee
as defined in section 2105 of title 5, United States Code, and
subject to the provisions of such title and other laws
generally applicable to the employees of the Executive Branch.
``(2) Compensation.--Employees of the Office shall be paid
in accordance with the provisions of chapter 51 and subchapter
III of chapter 53 of title 5, United States Code, relating to
classification and General Schedule pay rates.
``(3) Procurement of temporary and intermittent services.--
The Independent Insurance Advocate may procure temporary and
intermittent services under section 3109(b) of title 5, United
States Code, at rates for individuals which do not exceed the
daily equivalent of the annual rate of basic pay prescribed for
Level V of the Executive Schedule under section 5316 of such
title.
``(4) Details.--Any employee of the Federal Government may
be detailed to the Office with or without reimbursement, and
such detail shall be without interruption or loss of civil
service status or privilege. An employee of the Federal
Government detailed to the Office shall report to and be
subject to oversight by the Independent Insurance Advocate
during the assignment to the office, and may be compensated by
the branch, department, or agency from which the employee was
detailed.
``(5) Intergovernmental personnel.--The Independent
Insurance Advocate may enter into agreements under subchapter
VI of chapter 33 of title 5, United States Code, with State and
local governments, institutions of higher education, Indian
tribal governments, and other eligible organizations for the
assignment of intermittent, part-time, and full-time personnel,
on a reimbursable or non-reimbursable basis.
``(h) Ethics.--
``(1) Designated ethics official.--The Legal Counsel of the
Financial Stability Oversight Council, or in the absence of a
Legal Counsel of the Council, the designated ethics official of
any Council member agency, as chosen by the Independent
Insurance Advocate, shall be the ethics official for the
Independent Insurance Advocate.
``(2) Restriction on representation.--In addition to any
restriction under section 205(c) of title18, United States
Code, except as provided in subsections (d) through (i) of
section 205 of such title, the Independent Insurance Advocate
(except in the proper discharge of official duties) shall not,
with or without compensation, represent anyone to or before any
officer or employee of--
``(A) the Financial Stability Oversight Council on
any matter; or
``(B) the Department of Justice with respect to
litigation involving a matter described in subparagraph
(A).
``(3) Compensation for services provided by another.--For
purposes of section 203 of title 18, United States Code, and if
a special government employee--
``(A) the Independent Insurance Advocate shall not
be subject to the restrictions of subsection (a)(1) of
section 203,of title 18, United States Code, for
sharing in compensation earned by another for
representations on matters covered by such section; and
``(B) a person shall not be subject to the
restrictions of subsection (a)(2) of such section for
sharing such compensation with the Independent
Insurance Advocate.
``(i) Advisory, Technical, and Professional Committees.--The
Independent Insurance Advocate may appoint such special advisory,
technical, or professional committees as may be useful in carrying out
the functions of the Office and the members of such committees may be
staff of the Office, or other persons, or both.
``(j) Mission and Functions.--
``(1) Mission.--In carrying out the functions under this
subsection, the mission of the Office shall be to act as an
independent advocate on behalf of the interests of United
States policyholders on prudential aspects of insurance matters
of importance, and to provide perspective on protecting their
interests, separate and apart from any other Federal agency or
State insurance regulator.
``(2) Office.--The Office shall have the authority--
``(A) to coordinate Federal efforts on prudential
aspects of international insurance matters, including
representing the United States, as appropriate, in the
International Association of Insurance Supervisors (or
a successor entity) and assisting the Secretary in
negotiating covered agreements (as such term is defined
in subsection (q)) in coordination with States
(including State insurance commissioners) and the
United States Trade Representative;
``(B) to consult with the States (including State
insurance regulators) regarding insurance matters of
national importance and prudential insurance matters of
international importance;
``(C) to assist the Secretary in administering the
Terrorism Insurance Program established in the
Department of the Treasury under the Terrorism Risk
Insurance Act of 2002 (15 U.S.C. 6701 note);
``(D) to observe all aspects of the insurance
industry, including identifying issues or gaps in the
regulation of insurers that could contribute to a
systemic crisis in the insurance industry or the United
States financial system; and
``(E) to make determinations and exercise the
authority under subsection (m) with respect to covered
agreements and State insurance measures.
``(3) Membership on financial stability oversight
council.--
``(A) In general.--The Independent Insurance
Advocate shall serve, pursuant to section 111(b)(1)(J)
of the Financial Stability Act of 2010 (12 U.S.C.
5321(b)(1)(J)), as a member on the Financial Stability
Oversight Council.
``(B) Authority.--To assist the Financial Stability
Oversight Council with its responsibilities to monitor
international insurance developments, advise the
Congress, and make recommendations, the Independent
Insurance Advocate shall have the authority--
``(i) to regularly consult with
international insurance supervisors and
international financial stability counterparts;
``(ii) to consult with the Board of
Governors of the Federal Reserve System and the
States with respect to representing the United
States, as appropriate, in the International
Association of Insurance Supervisors (including
to become a non-voting member thereof),
particularly on matters of systemic risk;
``(iii) to participate at the Financial
Stability Board of The Group of Twenty and to
join with other members from the United States
including on matters related to insurance; and
``(iv) to participate with the United
States delegation to the Organization for
Economic Cooperation and Development and
observe and participate at the Insurance and
Private Pensions Committee.
``(4) Limitations on participation in supervisory
colleges.--The Office may not engage in any activities that it
is not specifically authorized to engage in under this section
or any other provision of law, including participation in any
supervisory college or other meetings or fora for cooperation
and communication between the involved insurance supervisors
established for the fundamental purpose of facilitating the
effectiveness of supervision of entities which belong to an
insurance group.
``(k) Scope.--The authority of the Office as specified and limited
in this section shall extend to all lines of insurance except--
``(1) health insurance, as determined by the Secretary in
coordination with the Secretary of Health and Human Services
based on section 2791 of the Public Health Service Act (42
U.S.C. 300gg-91);
``(2) long-term care insurance, except long-term care
insurance that is included with life or annuity insurance
components, as determined by the Secretary in coordination with
the Secretary of Health and Human Services, and in the case of
long-term care insurance that is included with such components,
the Secretary shall coordinate with the Secretary of Health and
Human Services in performing the functions of the Office; and
``(3) crop insurance, as established by the Federal Crop
Insurance Act (7 U.S.C. 1501 et seq.).
``(l) Access to Information.--In carrying out the functions
required under subsection (j), the Office may coordinate with any
relevant Federal agency and any State insurance regulator (or other
relevant Federal or State regulatory agency, if any, in the case of an
affiliate of an insurer) and any publicly available sources for the
provision to the Office of publicly available information.
Notwithstanding any other provision of law, each such relevant Federal
agency and State insurance regulator or other Federal or State
regulatory agency is authorized to provide to the Office such data or
information.
``(m) Preemption Pursuant to Covered Agreements.--
``(1) Standards.--A State insurance measure shall be
preempted pursuant to this section or section 314 if, and only
to the extent that the Independent Insurance Advocate
determines, in accordance with this subsection, that the
measure--
``(A) results in less favorable treatment of a non-
United States insurer domiciled in a foreign
jurisdiction that is subject to a covered agreement
than a United States insurer domiciled, licensed, or
otherwise admitted in that State; and
``(B) is inconsistent with a covered agreement.
``(2) Determination.--
``(A) Notice of potential inconsistency.--Before
making any determination under paragraph (1), the
Independent Insurance Advocate shall--
``(i) notify and consult with the
appropriate State regarding any potential
inconsistency or preemption;
``(ii) notify and consult with the United
States Trade Representative regarding any
potential inconsistency or preemption;
``(iii) cause to be published in the
Federal Register notice of the issue regarding
the potential inconsistency or preemption,
including a description of each State insurance
measure at issue and any applicable covered
agreement;
``(iv) provide interested parties a
reasonable opportunity to submit written
comments to the Office; and
``(v) consider any comments received.
``(B) Scope of review.--For purposes of this
subsection, any determination of the Independent
Insurance Advocate regarding State insurance measures,
and any preemption under paragraph (1) as a result of
such determination, shall be limited to the subject
matter contained within the covered agreement involved
and shall achieve a level of protection for insurance
or reinsurance consumers that is substantially
equivalent to the level of protection achieved under
State insurance or reinsurance regulation.
``(C) Notice of determination of inconsistency.--
Upon making any determination under paragraph (1), the
Director shall--
``(i) notify the appropriate State of the
determination and the extent of the
inconsistency;
``(ii) establish a reasonable period of
time, which shall not be less than 30 days,
before the determination shall become
effective; and
``(iii) notify the Committees on Financial
Services and Ways and Means of the House of
Representatives and the Committees on Banking,
Housing, and Urban Affairs and Finance of the
Senate.
``(3) Notice of effectiveness.--Upon the conclusion of the
period referred to in paragraph (2)(C)(ii), if the basis for
such determination still exists, the determination shall become
effective and the Independent Insurance Advocate shall--
``(A) cause to be published a notice in the Federal
Register that the preemption has become effective, as
well as the effective date; and
``(B) notify the appropriate State.
``(4) Limitation.--No State may enforce a State insurance
measure to the extent that such measure has been preempted
under this subsection.
``(5) Applicability of administrative procedures act.--
Determinations of inconsistency made pursuant to paragraph (2)
shall be subject to the applicable provisions of subchapter II
of chapter 5 of title 5, United States Code (relating to
administrative procedure), and chapter 7 of such title
(relating to judicial review), except that in any action for
judicial review of a determination of inconsistency, the court
shall determine the matter de novo.
``(n) Consultation.--The Independent Insurance Advocate shall
consult with State insurance regulators, individually or collectively,
to the extent the Independent Insurance Advocate determines
appropriate, in carrying out the functions of the Office.
``(o) Notices and Requests for Comment.--In addition to the other
functions and duties specified in this section, the Independent
Insurance Advocate may prescribe such notices and requests for comment
in the Federal Register as are deemed necessary related to and
governing the manner in which the duties and authorities of the
Independent Insurance Advocate are carried out;
``(p) Savings Provisions.--Nothing in this section shall--
``(1) preempt--
``(A) any State insurance measure that governs any
insurer's rates, premiums, underwriting, or sales
practices;
``(B) any State coverage requirements for
insurance;
``(C) the application of the antitrust laws of any
State to the business of insurance; or
``(D) any State insurance measure governing the
capital or solvency of an insurer, except to the extent
that such State insurance measure results in less
favorable treatment of a non-United State insurer than
a United States insurer; or
``(2) affect the preemption of any State insurance measure
otherwise inconsistent with and preempted by Federal law.
``(q) Retention of Authority of Federal Financial Regulatory
Agencies.--Nothing in this section or section 314 shall be construed to
limit the authority of any Federal financial regulatory agency,
including the authority to develop and coordinate policy, negotiate,
and enter into agreements with foreign governments, authorities,
regulators, and multinational regulatory committees and to preempt
State measures to affect uniformity with international regulatory
agreements.
``(r) Retention of Authority of United States Trade
Representative.--Nothing in this section or section 314 shall be
construed to affect the authority of the Office of the United States
Trade Representative pursuant to section 141 of the Trade Act of 1974
(19 U.S.C. 2171) or any other provision of law, including authority
over the development and coordination of United States international
trade policy and the administration of the United States trade
agreements program.
``(s) Congressional Testimony.--The Independent Insurance Advocate
shall appear before the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban
Affairs at semi-annual hearings and shall provide testimony, which
shall include submitting written testimony in advance of such
appearances to such committees and to the Committee on Ways and Means
of the House of Representatives and the Committee on Finance of the
Senate, on the following matters:
``(1) Office activities.--The efforts, activities,
objectives, and plans of the Office.
``(2) Section 313(l) actions.--Any actions taken by the
Office pursuant to subsection (l) (regarding preemption
pursuant to covered agreements).
``(3) Insurance industry.--The state of, and developments
in, the insurance industry.
``(4) U.S. and global insurance and reinsurance markets.--
The breadth and scope of the global insurance and reinsurance
markets and the critical role such markets plays in supporting
insurance in the United States and the ongoing impacts of part
II of the Nonadmitted and Reinsurance Reform Act of 2010 on the
ability of State regulators to access reinsurance information
for regulated companies in their jurisdictions.
``(5) Other.--Any other matters as deemed relevant by the
Independent Insurance Advocate or requested by such Committees.
``(t) Report Upon End of Term of Office.--Not later than two months
prior to the expiration of the term of office, or discontinuation of
service, of each individual serving as the Independent Insurance
Advocate, the Independent Insurance Advocate shall submit a report to
the Committees on Financial Services and Ways and Means of the House of
Representatives and the Committees on Banking, Housing, and Urban
Affairs and Finance of the Senate setting forth recommendations
regarding the Financial Stability Oversight Council and the role,
duties, and functions of the Independent Insurance Advocate.
``(u) Definitions.--In this section and section 314, the following
definitions shall apply:
``(1) Affiliate.--The term `affiliate' means, with respect
to an insurer, any person who controls, is controlled by, or is
under common control with the insurer.
``(2) Covered agreement.--The term `covered agreement'
means a written bilateral or multilateral agreement regarding
prudential measures with respect to the business of insurance
or reinsurance that--
``(A) is entered into between the United States and
one or more foreign governments, authorities, or
regulatory entities; and
``(B) relates to the recognition of prudential
measures with respect to the business of insurance or
reinsurance that achieves a level of protection for
insurance or reinsurance consumers that is
substantially equivalent to the level of protection
achieved under State insurance or reinsurance
regulation.
``(3) Insurer.--The term `insurer' means any person engaged
in the business of insurance, including reinsurance.
``(4) Federal financial regulatory agency.--The term
`Federal financial regulatory agency' means the Department of
the Treasury, the Board of Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency, the
Office of Thrift Supervision, the Securities and Exchange
Commission, the Commodity Futures Trading Commission, the
Federal Deposit Insurance Corporation, the Federal Housing
Finance Agency, or the National Credit Union Administration.
``(5) Financial stability oversight council.--The term
`Financial Stability Oversight Council ' means the Financial
Stability Oversight Council established under section 111(a) of
the Dodd-Frank Wall Street Reform and Consumer Protection Act
(12 U.S.C. 5321(a)).
``(6) Member agency.--The term `member agency' has the
meaning given such term in section 111(a) of the Dodd-Frank
Wall Street Reform and Consumer Protection Act (12 U.S.C.
5321(a)).
``(7) Non-united states insurer.--The term `non-United
States insurer' means an insurer that is organized under the
laws of a jurisdiction other than a State, but does not include
any United States branch of such an insurer.
``(8) Office.--The term `Office' means the Office of the
Independent Insurance Advocate established by this section.
``(9) State insurance measure.--The term `State insurance
measure' means any State law, regulation, administrative
ruling, bulletin, guideline, or practice relating to or
affecting prudential measures applicable to insurance or
reinsurance.
``(10) State insurance regulator.--The term `State
insurance regulator' means any State regulatory authority
responsible for the supervision of insurers.
``(11) Substantially equivalent to the level of protection
achieved.--The term `substantially equivalent to the level of
protection achieved' means the prudential measures of a foreign
government, authority, or regulatory entity achieve a similar
outcome in consumer protection as the outcome achieved under
State insurance or reinsurance regulation.
``(12) United states insurer.--The term `United States
insurer' means--
``(A) an insurer that is organized under the laws
of a State; or
``(B) a United States branch of a non-United States
insurer.''.
(b) Pay at Level III of Executive Schedule.--Section 5314 of title
5, United States Code, is amended by adding at the end the following
new item:
``Independent Insurance Advocate, Department of the
Treasury.''.
(c) Voting Member of FSOC.--Paragraph (1) of section 111(b) of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C.
5321(b)(1)) is amended by striking subparagraph (J) and inserting the
following new subparagraph:
``(J) the Independent Insurance Advocate appointed
pursuant to section 313 of title 31, United States
Code.''.
(d) Independence.--Section 111 of Public Law 93-495 (12 U.S.C. 250)
is amended--
(1) by inserting ``the Independent Insurance Advocate of
the Department of the Treasury,'' after ``Federal Housing
Finance Agency,''; and
(2) by inserting ``or official'' before ``submitting
them''.
(e) Transfer of Employees.--All employees of the Department of
Treasury who are performing staff functions for the independent member
of the Financial Stability Oversight Council under section 111(b)(2)(J)
of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12
U.S.C. 5321(b)(2)(J)) on a full-time equivalent basis as of the date of
enactment of this Act shall be eligible for transfer to the Office of
the Independent Insurance Advocate established pursuant to the
amendment made by subsection (a) of this section for appointment as an
employee and shall be transferred at the joint discretion of the
Independent Insurance Advocate and the eligible employee. Any employee
eligible for transfer that is not appointed within 360 days from the
date of enactment of this Act shall be eligible for detail under
section 313(f)(4) of title 31, United States Code.
(f) Temporary Service; Transition.--Notwithstanding the amendment
made by subsection (a) of this section, during the period beginning on
the date of the enactment of this Act and ending on the date on which
the Independent Insurance Advocate is appointed and confirmed pursuant
to section 313(b)(2) of title 31, United States Code, as amended by
such amendment, the person serving, on such date of enactment, as the
independent member of the Financial Stability Oversight Council
pursuant to section 111(b)(1)(J) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (12 U.S.C. 5321(b)(1)(J)) shall act for all
purposes as, and with the full powers of, the Independent Insurance
Advocate.
(g) Comparability in Compensation Schedules.--Subsection (a) of
section 1206 of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 1833b(a)) is amended by inserting
``and the Office of the Independent Insurance Advocate of the
Department of the Treasury,'' after ``Farm Credit Administration,''.
(h) Senior Executives.--Subparagraph (D) of section 3132(a)(1) of
title 5, United States Code, is amended by inserting ``the Office of
the Independent Insurance Advocate of the Department of the Treasury,''
after ``Finance Agency,''.
SEC. 502. TREATMENT OF COVERED AGREEMENTS.
Subsection (c) of section 314 of title 31, United States Code is
amended--
(1) by designating paragraphs (1) and (2) as paragraphs (2)
and (3), respectively; and
(2) by inserting before paragraph (2), as so redesignated,
the following new paragraph:
``(1) the Secretary of the Treasury and the United States
Trade Representative have caused to be published in the Federal
Register, and made available for public comment for a period of
not fewer than 30 days and not greater than 90 days (which
period may run concurrently with the 90-day period for the
covered agreement referred to in paragraph (3)), the proposed
text of the covered agreement;''.
TITLE VI--DEMANDING ACCOUNTABILITY FROM FINANCIAL REGULATORS AND
DEVOLVING POWER AWAY FROM WASHINGTON
Subtitle A--Cost-Benefit Analyses
SEC. 611. DEFINITIONS.
As used in this subtitle--
(1) the term ``agency'' means the Board of Governors of the
Federal Reserve System, the Consumer Financial Opportunity
Commission, the Commodity Futures Trading Commission, the
Federal Deposit Insurance Corporation, the Federal Housing
Finance Agency, the Office of the Comptroller of the Currency,
the National Credit Union Administration, and the Securities
and Exchange Commission;
(2) the term ``chief economist'' means--
(A) with respect to the Board of Governors of the
Federal Reserve System, the Director of the Division of
Research and Statistics, or an employee of the agency
with comparable authority;
(B) with respect to the Consumer Financial
Opportunity Commission, the Head of the Office of
Economic Analysis, or an employee of the agency with
comparable authority;
(C) with respect to the Commodity Futures Trading
Commission, the Chief Economist, or an employee of the
agency with comparable authority;
(D) with respect to the Federal Deposit Insurance
Corporation, the Director of the Division of Insurance
and Research, or an employee of the agency with
comparable authority;
(E) with respect to the Federal Housing Finance
Agency, the Chief Economist, or an employee of the
agency with comparable authority;
(F) with respect to the Office of the Comptroller
of the Currency, the Director for Policy Analysis, or
an employee of the agency with comparable authority;
(G) with respect to the National Credit Union
Administration, the Chief Economist, or an employee of
the agency with comparable authority; and
(H) with respect to the Securities and Exchange
Commission, the Director of the Division of Economic
and Risk Analysis, or an employee of the agency with
comparable authority;
(3) the term ``Council'' means the Chief Economists Council
established under section 618; and
(4) the term ``regulation''--
(A) means an agency statement of general
applicability and future effect that is designed to
implement, interpret, or prescribe law or policy or to
describe the procedure or practice requirements of an
agency, including rules, orders of general
applicability, interpretive releases, and other
statements of general applicability that the agency
intends to have the force and effect of law; and
(B) does not include--
(i) a regulation issued in accordance with
the formal rulemaking provisions of section 556
or 557 of title 5, United States Code;
(ii) a regulation that is limited to agency
organization, management, or personnel matters;
(iii) a regulation promulgated pursuant to
statutory authority that expressly prohibits
compliance with this provision;
(iv) a regulation that is certified by the
agency to be an emergency action, if such
certification is published in the Federal
Register;
(v) a regulation that is promulgated by the
Board of Governors of the Federal Reserve
System or the Federal Open Market Committee
under section 10A, 10B, 13, 13A, or 19 of the
Federal Reserve Act, or any of subsections (a)
through (f) of section 14 of that Act; or
(vi) a regulation filed with the Commission
by a self-regulatory organization--
(I) that meet the criteria for
immediate effectiveness under section
240.19b-4(f) of title 17, Code of
Federal Regulations; and
(II) for which the self-regulatory
organization has itself conducted the
cost-benefit analysis and otherwise
complied with the requirements of
section 612.
SEC. 612. REQUIRED REGULATORY ANALYSIS.
(a) Requirements for Notices of Proposed Rulemaking.--An agency may
not issue a notice of proposed rulemaking unless the agency includes in
the notice of proposed rulemaking an analysis that contains, at a
minimum, with respect to each regulation that is being proposed--
(1) an identification of the need for the regulation and
the regulatory objective, including identification of the
nature and significance of the market failure, regulatory
failure, or other problem that necessitates the regulation;
(2) an explanation of why the private market or State,
local, or tribal authorities cannot adequately address the
identified market failure or other problem;
(3) an analysis of the adverse impacts to regulated
entities, other market participants, economic activity, or
agency effectiveness that are engendered by the regulation and
the magnitude of such adverse impacts;
(4) a quantitative and qualitative assessment of all
anticipated direct and indirect costs and benefits of the
regulation (as compared to a benchmark that assumes the absence
of the regulation), including--
(A) compliance costs;
(B) effects on economic activity, net job creation
(excluding jobs related to ensuring compliance with the
regulation), efficiency, competition, and capital
formation;
(C) regulatory administrative costs; and
(D) costs imposed by the regulation on State,
local, or tribal governments or other regulatory
authorities;
(5) if quantified benefits do not outweigh quantitative
costs, a justification for the regulation;
(6) an identification and assessment of all available
alternatives to the regulation, including modification of an
existing regulation or statute, together with--
(A) an explanation of why the regulation meets the
objectives of the regulation more effectively than the
alternatives, and if the agency is proposing multiple
alternatives, an explanation of why a notice of
proposed rulemaking, rather than an advanced notice of
proposed rulemaking, is appropriate; and
(B) if the regulation is not a pilot program, an
explanation of why a pilot program is not appropriate;
(7) if the regulation specifies the behavior or manner of
compliance, an explanation of why the agency did not instead
specify performance objectives;
(8) an assessment of how the burden imposed by the
regulation will be distributed among market participants,
including whether consumers, investors, or small businesses
will be disproportionately burdened;
(9) an assessment of the extent to which the regulation is
inconsistent, incompatible, or duplicative with the existing
regulations of the agency or those of other domestic and
international regulatory authorities with overlapping
jurisdiction;
(10) a description of any studies, surveys, or other data
relied upon in preparing the analysis;
(11) an assessment of the degree to which the key
assumptions underlying the analysis are subject to uncertainty;
and
(12) an explanation of predicted changes in market
structure and infrastructure and in behavior by market
participants, including consumers and investors, assuming that
they will pursue their economic interests.
(b) Requirements for Notices of Final Rulemaking.--
(1) In general.--Notwithstanding any other provision of
law, an agency may not issue a notice of final rulemaking with
respect to a regulation unless the agency--
(A) has issued a notice of proposed rulemaking for
the relevant regulation;
(B) has conducted and includes in the notice of
final rulemaking an analysis that contains, at a
minimum, the elements required under subsection (a);
and
(C) includes in the notice of final rulemaking
regulatory impact metrics selected by the chief
economist to be used in preparing the report required
pursuant to section 615.
(2) Consideration of comments.--The agency shall
incorporate in the elements described in paragraph (1)(B) the
data and analyses provided to the agency by commenters during
the comment period, or explain why the data or analyses are not
being incorporated.
(3) Comment period.--An agency shall not publish a notice
of final rulemaking with respect to a regulation, unless the
agency--
(A) has allowed at least 90 days from the date of
publication in the Federal Register of the notice of
proposed rulemaking for the submission of public
comments; or
(B) includes in the notice of final rulemaking an
explanation of why the agency was not able to provide a
90-day comment period.
(4) Prohibited rules.--
(A) In general.--An agency may not publish a notice
of final rulemaking if the agency, in its analysis
under paragraph (1)(B), determines that the quantified
costs are greater than the quantified benefits under
subsection (a)(5).
(B) Publication of analysis.--If the agency is
precluded by subparagraph (A) from publishing a notice
of final rulemaking, the agency shall publish in the
Federal Register and on the public website of the
agency its analysis under paragraph (1)(B), and provide
the analysis to each House of Congress.
(C) Congressional waiver.--If the agency is
precluded by subparagraph (A) from publishing a notice
of final rulemaking, Congress, by joint resolution
pursuant to the procedures set forth for joint
resolutions in section 802 of title 5, United States
Code, may direct the agency to publish a notice of
final rulemaking notwithstanding the prohibition
contained in subparagraph (A). In applying section 802
of title 5, United States Code, for purposes of this
paragraph, section 802(e)(2) shall not apply and the
terms--
(i) ``joint resolution'' or ``joint
resolution described in subsection (a)'' means
only a joint resolution introduced during the
period beginning on the submission or
publication date and ending 60 days thereafter
(excluding days either House of Congress is
adjourned for more than 3 days during a session
of Congress), the matter after the resolving
clause of which is as follows: ``That Congress
directs, notwithstanding the prohibition
contained in section 612(b)(4)(A) of the
Financial CHOICE Act of 2016, the __ to publish
the notice of final rulemaking for the
regulation or regulations that were the subject
of the analysis submitted by the __ to Congress
on __.'' (The blank spaces being appropriately
filled in.); and
(ii) ``submission or publication date''
means--
(I) the date on which the analysis
under paragraph (1)(B) is submitted to
Congress under paragraph (4)(B); or
(II) if the analysis is submitted
to Congress less than 60 session days
or 60 legislative days before the date
on which the Congress adjourns a
session of Congress, the date on which
the same or succeeding Congress first
convenes its next session.
SEC. 613. RULE OF CONSTRUCTION.
For purposes of the Paperwork Reduction Act (44 U.S.C. 3501 et
seq.), obtaining, causing to be obtained, or soliciting information for
purposes of complying with section 612 with respect to a proposed
rulemaking shall not be construed to be a collection of information,
provided that the agency has first issued an advanced notice of
proposed rulemaking in connection with the regulation, identifies that
advanced notice of proposed rulemaking in its solicitation of
information, and informs the person from whom the information is
obtained or solicited that the provision of information is voluntary.
SEC. 614. PUBLIC AVAILABILITY OF DATA AND REGULATORY ANALYSIS.
(a) In General.--At or before the commencement of the public
comment period with respect to a regulation, the agency shall make
available on its public website sufficient information about the data,
methodologies, and assumptions underlying the analyses performed
pursuant to section 612 so that the analytical results of the agency
are capable of being substantially reproduced, subject to an acceptable
degree of imprecision or error.
(b) Confidentiality.--The agency shall comply with subsection (a)
in a manner that preserves the confidentiality of nonpublic
information, including confidential trade secrets, confidential
commercial or financial information, and confidential information about
positions, transactions, or business practices.
SEC. 615. FIVE-YEAR REGULATORY IMPACT ANALYSIS.
(a) In General.--Not later than 5 years after the date of
publication in the Federal Register of a notice of final rulemaking,
the chief economist of the agency shall issue a report that examines
the economic impact of the subject regulation, including the direct and
indirect costs and benefits of the regulation.
(b) Regulatory Impact Metrics.--In preparing the report required by
subsection (a), the chief economist shall employ the regulatory impact
metrics included in the notice of final rulemaking pursuant to section
612(b)(1)(C).
(c) Reproducibility.--The report shall include the data,
methodologies, and assumptions underlying the evaluation so that the
agency's analytical results are capable of being substantially
reproduced, subject to an acceptable degree of imprecision or error.
(d) Confidentiality.--The agency shall comply with subsection (c)
in a manner that preserves the confidentiality of nonpublic
information, including confidential trade secrets, confidential
commercial or financial information, and confidential information about
positions, transactions, or business practices.
(e) Report.--The agency shall submit the report required by
subsection (a) to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the House of
Representatives and post it on the public website of the agency. The
Commodity Futures Trading Commission shall also submit its report to
the Committee on Agriculture, Nutrition, and Forestry of the Senate and
the Committee on Agriculture of the House of Representatives.
SEC. 616. RETROSPECTIVE REVIEW OF EXISTING RULES.
(a) Regulatory Improvement Plan.--Not later than 1 year after the
date of enactment of this Act and every 5 years thereafter, each agency
shall develop, submit to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the
House of Representatives, and post on the public website of the agency
a plan, consistent with law and its resources and regulatory
priorities, under which the agency will modify, streamline, expand, or
repeal existing regulations so as to make the regulatory program of the
agency more effective or less burdensome in achieving the regulatory
objectives. The Commodity Futures Trading Commission shall also submit
its plan to the Committee on Agriculture, Nutrition, and Forestry of
the Senate and the Committee on Agriculture of the House of
Representatives.
(b) Implementation Progress Report.--Two years after the date of
submission of each plan required under subsection (a), each agency
shall develop, submit to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the
House of Representatives, and post on the public website of the agency
a report of the steps that it has taken to implement the plan, steps
that remain to be taken to implement the plan, and, if any parts of the
plan will not be implemented, reasons for not implementing those parts
of the plan. The Commodity Futures Trading Commission shall also submit
its plan to the Committee on Agriculture, Nutrition, and Forestry of
the Senate and the Committee on Agriculture of the House of
Representatives.
SEC. 617. JUDICIAL REVIEW.
(a) In General.--Notwithstanding any other provision of law, during
the period beginning on the date on which a notice of final rulemaking
for a regulation is published in the Federal Register and ending 1 year
later, a person that is adversely affected or aggrieved by the
regulation is entitled to bring an action in the United States Court of
Appeals for the District of Columbia Circuit for judicial review of
agency compliance with the requirements of section 612.
(b) Stay.--The court may stay the effective date of the regulation
or any provision thereof.
(c) Relief.--If the court finds that an agency has not complied
with the requirements of section 612, the court shall vacate the
subject regulation, unless the agency shows by clear and convincing
evidence that vacating the regulation would result in irreparable harm.
Nothing in this section affects other limitations on judicial review or
the power or duty of the court to dismiss any action or deny relief on
any other appropriate legal or equitable ground.
SEC. 618. CHIEF ECONOMISTS COUNCIL.
(a) Establishment.--There is established the Chief Economists
Council.
(b) Membership.--The Council shall consist of the chief economist
of each agency. The members of the Council shall select the first
chairperson of the Council. Thereafter the position of Chairperson
shall rotate annually among the members of the Council.
(c) Meetings.--The Council shall meet at the call of the
Chairperson, but not less frequently than quarterly.
(d) Report.--One year after the effective date of this Act and
annually thereafter, the Council shall prepare and submit to the
Committee on Banking, Housing, and Urban Affairs and the Committee on
Agriculture, Nutrition, and Forestry of the Senate and the Committee on
Financial Services and the Committee on Agriculture of the House of
Representatives a report on--
(1) the benefits and costs of regulations adopted by the
agencies during the past 12 months;
(2) the regulatory actions planned by the agencies for the
upcoming 12 months;
(3) the cumulative effect of the existing regulations of
the agencies on economic activity, innovation, international
competitiveness of entities regulated by the agencies, and net
job creation (excluding jobs related to ensuring compliance
with the regulation);
(4) the training and qualifications of the persons who
prepared the cost-benefit analyses of each agency during the
past 12 months;
(5) the sufficiency of the resources available to the chief
economists during the past 12 months for the conduct of the
activities required by this subtitle; and
(6) recommendations for legislative or regulatory action to
enhance the efficiency and effectiveness of financial
regulation in the United States.
SEC. 619. CONFORMING AMENDMENTS.
Section 15(a) of the Commodity Exchange Act (7 U.S.C. 19(a)) is
amended--
(1) by striking paragraph (1);
(2) in paragraph (2), by striking ``(2)'' and all that
follows through ``light of--'' and inserting the following:
``(1) Considerations.--Before promulgating a regulation
under this chapter or issuing an order (except as provided in
paragraph (2)), the Commission shall take into consideration--
'';
(3) in paragraph (1), as so redesignated--
(A) in subparagraph (B), by striking ``futures''
and inserting ``the relevant'';
(B) in subparagraph (C), by adding ``and'' at the
end;
(C) in subparagraph (D), by striking ``; and'' and
inserting a period; and
(D) by striking subparagraph (E); and
(4) by redesignating paragraph (3) as paragraph (2).
SEC. 620. OTHER REGULATORY ENTITIES.
(a) Securities and Exchange Commission.--Not later than 1 year
after the date of enactment of this Act, the Securities and Exchange
Commission shall provide to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial Services of
the House of Representatives a report setting forth a plan for
subjecting the Public Company Accounting Oversight Board, the Municipal
Securities Rulemaking Board, and any national securities association
registered under section 15A of the Securities Exchange Act of 1934 (15
U.S.C. 78o-4(a)) to the requirements of this subtitle, other than
direct representation on the Council.
(b) Commodity Futures Trading Commission.--Not later than 1 year
after the date of enactment of this Act, the Commodity Futures Trading
Commission shall provide to the Committee on Banking, Housing, and
Urban Affairs of the Senate, the Committee on Financial Services of the
House of Representatives, the Committee on Agriculture, Nutrition, and
Forestry of the Senate, and the Committee on Agriculture of the House
of Representatives a report setting forth a plan for subjecting any
futures association registered under section 17 of the Commodity
Exchange Act (7 U.S.C. 21) to the requirements of this subtitle, other
than direct representation on the Council.
SEC. 621. AVOIDANCE OF DUPLICATIVE OR UNNECESSARY ANALYSES.
An agency may perform the analyses required by this subtitle in
conjunction with, or as a part of, any other agenda or analysis
required by any other provision of law, if such other analysis
satisfies the provisions of this subtitle.
Subtitle B--Congressional Review of Federal Financial Agency Rulemaking
SEC. 631. CONGRESSIONAL REVIEW.
(a)(1)(A) Before a rule may take effect, a Federal financial agency
shall publish in the Federal Register a list of information on which
the rule is based, including data, scientific and economic studies, and
cost-benefit analyses, and identify how the public can access such
information online, and shall submit to each House of the Congress and
to the Comptroller General a report containing--
(i) a copy of the rule;
(ii) a concise general statement relating to the rule;
(iii) a classification of the rule as a major or nonmajor
rule, including an explanation of the classification
specifically addressing each criteria for a major rule
contained within subparagraphs (A) through (C) of section
634(2);
(iv) a list of any other related regulatory actions
intended to implement the same statutory provision or
regulatory objective as well as the individual and aggregate
economic effects of those actions; and
(v) the proposed effective date of the rule.
(B) On the date of the submission of the report under subparagraph
(A), the Federal financial agency shall submit to the Comptroller
General and make available to each House of Congress--
(i) a complete copy of the cost-benefit analysis of the
rule, if any, including an analysis of any jobs added or lost,
differentiating between public and private sector jobs;
(ii) the Federal financial agency's actions pursuant to
sections 603, 604, 605, 607, and 609 of title 5, United States
Code;
(iii) the Federal financial agency's actions pursuant to
sections 202, 203, 204, and 205 of the Unfunded Mandates Reform
Act of 1995; and
(iv) any other relevant information or requirements under
any other Act and any relevant Executive orders.
(C) Upon receipt of a report submitted under subparagraph (A), each
House shall provide copies of the report to the chairman and ranking
member of each standing committee with jurisdiction under the rules of
the House of Representatives or the Senate to report a bill to amend
the provision of law under which the rule is issued.
(2)(A) The Comptroller General shall provide a report on each major
rule to the committees of jurisdiction by the end of 15 calendar days
after the submission or publication date. The report of the Comptroller
General shall include an assessment of the Federal financial agency's
compliance with procedural steps required by paragraph (1)(B) and an
assessment of whether the major rule imposes any new limits or mandates
on private-sector activity.
(B) Federal financial agencies shall cooperate with the Comptroller
General by providing information relevant to the Comptroller General's
report under subparagraph (A).
(3) A major rule relating to a report submitted under paragraph (1)
shall take effect upon enactment of a joint resolution of approval
described in section 632 or as provided for in the rule following
enactment of a joint resolution of approval described in section 632,
whichever is later.
(4) A nonmajor rule shall take effect as provided by section 633
after submission to Congress under paragraph (1).
(5) If a joint resolution of approval relating to a major rule is
not enacted within the period provided in subsection (b)(2), then a
joint resolution of approval relating to the same rule may not be
considered under this subtitle in the same Congress by either the House
of Representatives or the Senate.
(b)(1) A major rule shall not take effect unless the Congress
enacts a joint resolution of approval described under section 632.
(2) If a joint resolution described in subsection (a) is not
enacted into law by the end of 70 session days or legislative days, as
applicable, beginning on the date on which the report referred to in
subsection (a)(1)(A) is received by Congress (excluding days either
House of Congress is adjourned for more than 3 days during a session of
Congress), then the rule described in that resolution shall be deemed
not to be approved and such rule shall not take effect.
(c)(1) Notwithstanding any other provision of this section (except
subject to paragraph (3)), a major rule may take effect for one 90-
calendar-day period if the President makes a determination under
paragraph (2) and submits written notice of such determination to the
Congress.
(2) Paragraph (1) applies to a determination made by the President
by Executive order that the major rule should take effect because such
rule is--
(A) necessary because of an imminent threat to health or
safety or other emergency;
(B) necessary for the enforcement of criminal laws;
(C) necessary for national security; or
(D) issued pursuant to any statute implementing an
international trade agreement.
(3) An exercise by the President of the authority under this
subsection shall have no effect on the procedures under section 632.
(d)(1) In addition to the opportunity for review otherwise provided
under this subtitle, in the case of any rule for which a report was
submitted in accordance with subsection (a)(1)(A) during the period
beginning on the date occurring--
(A) in the case of the Senate, 60 session days; or
(B) in the case of the House of Representatives, 60
legislative days,
before the date the Congress is scheduled to adjourn a session of
Congress through the date on which the same or succeeding Congress
first convenes its next session, sections 632 and 633 shall apply to
such rule in the succeeding session of Congress.
(2)(A) In applying sections 632 and 633 for purposes of such
additional review, a rule described under paragraph (1) shall be
treated as though--
(i) such rule were published in the Federal Register on--
(I) in the case of the Senate, the 15th session
day; or
(II) in the case of the House of Representatives,
the 15th legislative day,
after the succeeding session of Congress first convenes; and
(ii) a report on such rule were submitted to Congress under
subsection (a)(1) on such date.
(B) Nothing in this paragraph shall be construed to affect the
requirement under subsection (a)(1) that a report shall be submitted to
Congress before a rule can take effect.
(3) A rule described under paragraph (1) shall take effect as
otherwise provided by law (including other subsections of this
section).
SEC. 632. CONGRESSIONAL APPROVAL PROCEDURE FOR MAJOR RULES.
(a)(1) For purposes of this section, the term ``joint resolution''
means only a joint resolution addressing a report classifying a rule as
major pursuant to section 631(a)(1)(A)(iii) that--
(A) bears no preamble;
(B) bears the following title (with blanks filled as
appropriate): ``Approving the rule submitted by ___ relating to
___.'';
(C) includes after its resolving clause only the following
(with blanks filled as appropriate): ``That Congress approves
the rule submitted by ___ relating to ___.''; and
(D) is introduced pursuant to paragraph (2).
(2) After a House of Congress receives a report classifying a rule
as major pursuant to section 631(a)(1)(A)(iii), the majority leader of
that House (or his or her respective designee) shall introduce (by
request, if appropriate) a joint resolution described in paragraph
(1)--
(A) in the case of the House of Representatives, within 3
legislative days; and
(B) in the case of the Senate, within 3 session days.
(3) A joint resolution described in paragraph (1) shall not be
subject to amendment at any stage of proceeding.
(b) A joint resolution described in subsection (a) shall be
referred in each House of Congress to the committees having
jurisdiction over the provision of law under which the rule is issued.
(c) In the Senate, if the committee or committees to which a joint
resolution described in subsection (a) has been referred have not
reported it at the end of 15 session days after its introduction, such
committee or committees shall be automatically discharged from further
consideration of the resolution and it shall be placed on the calendar.
A vote on final passage of the resolution shall be taken on or before
the close of the 15th session day after the resolution is reported by
the committee or committees to which it was referred, or after such
committee or committees have been discharged from further consideration
of the resolution.
(d)(1) In the Senate, when the committee or committees to which a
joint resolution is referred have reported, or when a committee or
committees are discharged (under subsection (c)) from further
consideration of a joint resolution described in subsection (a), it is
at any time thereafter in order (even though a previous motion to the
same effect has been disagreed to) for a motion to proceed to the
consideration of the joint resolution, and all points of order against
the joint resolution (and against consideration of the joint
resolution) are waived. The motion is not subject to amendment, or to a
motion to postpone, or to a motion to proceed to the consideration of
other business. A motion to reconsider the vote by which the motion is
agreed to or disagreed to shall not be in order. If a motion to proceed
to the consideration of the joint resolution is agreed to, the joint
resolution shall remain the unfinished business of the Senate until
disposed of.
(2) In the Senate, debate on the joint resolution, and on all
debatable motions and appeals in connection therewith, shall be limited
to not more than 2 hours, which shall be divided equally between those
favoring and those opposing the joint resolution. A motion to further
limit debate is in order and not debatable. An amendment to, or a
motion to postpone, or a motion to proceed to the consideration of
other business, or a motion to recommit the joint resolution is not in
order.
(3) In the Senate, immediately following the conclusion of the
debate on a joint resolution described in subsection (a), and a single
quorum call at the conclusion of the debate if requested in accordance
with the rules of the Senate, the vote on final passage of the joint
resolution shall occur.
(4) Appeals from the decisions of the Chair relating to the
application of the rules of the Senate to the procedure relating to a
joint resolution described in subsection (a) shall be decided without
debate.
(e) In the House of Representatives, if any committee to which a
joint resolution described in subsection (a) has been referred has not
reported it to the House at the end of 15 legislative days after its
introduction, such committee shall be discharged from further
consideration of the joint resolution, and it shall be placed on the
appropriate calendar. On the second and fourth Thursdays of each month
it shall be in order at any time for the Speaker to recognize a Member
who favors passage of a joint resolution that has appeared on the
calendar for at least 5 legislative days to call up that joint
resolution for immediate consideration in the House without
intervention of any point of order. When so called up a joint
resolution shall be considered as read and shall be debatable for 1
hour equally divided and controlled by the proponent and an opponent,
and the previous question shall be considered as ordered to its passage
without intervening motion. It shall not be in order to reconsider the
vote on passage. If a vote on final passage of the joint resolution has
not been taken by the third Thursday on which the Speaker may recognize
a Member under this subsection, such vote shall be taken on that day.
(f)(1) If, before passing a joint resolution described in
subsection (a), one House receives from the other a joint resolution
having the same text, then--
(A) the joint resolution of the other House shall not be
referred to a committee; and
(B) the procedure in the receiving House shall be the same
as if no joint resolution had been received from the other
House until the vote on passage, when the joint resolution
received from the other House shall supplant the joint
resolution of the receiving House.
(2) This subsection shall not apply to the House of Representatives
if the joint resolution received from the Senate is a revenue measure.
(g) If either House has not taken a vote on final passage of the
joint resolution by the last day of the period described in section
631(b)(2), then such vote shall be taken on that day.
(h) This section and section 633 are enacted by Congress--
(1) as an exercise of the rulemaking power of the Senate
and House of Representatives, respectively, and as such is
deemed to be part of the rules of each House, respectively, but
applicable only with respect to the procedure to be followed in
that House in the case of a joint resolution described in
subsection (a) and superseding other rules only where
explicitly so; and
(2) with full recognition of the Constitutional right of
either House to change the rules (so far as they relate to the
procedure of that House) at any time, in the same manner and to
the same extent as in the case of any other rule of that House.
SEC. 633. CONGRESSIONAL DISAPPROVAL PROCEDURE FOR NONMAJOR RULES.
(a) For purposes of this section, the term ``joint resolution''
means only a joint resolution introduced in the period beginning on the
date on which the report referred to in section 631(a)(1)(A) is
received by Congress and ending 60 days thereafter (excluding days
either House of Congress is adjourned for more than 3 days during a
session of Congress), the matter after the resolving clause of which is
as follows: ``That Congress disapproves the nonmajor rule submitted by
the ___ relating to ___, and such rule shall have no force or effect.''
(The blank spaces being appropriately filled in).
(b) A joint resolution described in subsection (a) shall be
referred to the committees in each House of Congress with jurisdiction.
(c) In the Senate, if the committee to which is referred a joint
resolution described in subsection (a) has not reported such joint
resolution (or an identical joint resolution) at the end of 15 session
days after the date of introduction of the joint resolution, such
committee may be discharged from further consideration of such joint
resolution upon a petition supported in writing by 30 Members of the
Senate, and such joint resolution shall be placed on the calendar.
(d)(1) In the Senate, when the committee to which a joint
resolution is referred has reported, or when a committee is discharged
(under subsection (c)) from further consideration of a joint resolution
described in subsection (a), it is at any time thereafter in order
(even though a previous motion to the same effect has been disagreed
to) for a motion to proceed to the consideration of the joint
resolution, and all points of order against the joint resolution (and
against consideration of the joint resolution) are waived. The motion
is not subject to amendment, or to a motion to postpone, or to a motion
to proceed to the consideration of other business. A motion to
reconsider the vote by which the motion is agreed to or disagreed to
shall not be in order. If a motion to proceed to the consideration of
the joint resolution is agreed to, the joint resolution shall remain
the unfinished business of the Senate until disposed of.
(2) In the Senate, debate on the joint resolution, and on all
debatable motions and appeals in connection therewith, shall be limited
to not more than 10 hours, which shall be divided equally between those
favoring and those opposing the joint resolution. A motion to further
limit debate is in order and not debatable. An amendment to, or a
motion to postpone, or a motion to proceed to the consideration of
other business, or a motion to recommit the joint resolution is not in
order.
(3) In the Senate, immediately following the conclusion of the
debate on a joint resolution described in subsection (a), and a single
quorum call at the conclusion of the debate if requested in accordance
with the rules of the Senate, the vote on final passage of the joint
resolution shall occur.
(4) Appeals from the decisions of the Chair relating to the
application of the rules of the Senate to the procedure relating to a
joint resolution described in subsection (a) shall be decided without
debate.
(e) In the Senate, the procedure specified in subsection (c) or (d)
shall not apply to the consideration of a joint resolution respecting a
nonmajor rule--
(1) after the expiration of the 60 session days beginning
with the applicable submission or publication date; or
(2) if the report under section 631(a)(1)(A) was submitted
during the period referred to in section 631(d)(1), after the
expiration of the 60 session days beginning on the 15th session
day after the succeeding session of Congress first convenes.
(f) If, before the passage by one House of a joint resolution of
that House described in subsection (a), that House receives from the
other House a joint resolution described in subsection (a), then the
following procedures shall apply:
(1) The joint resolution of the other House shall not be
referred to a committee.
(2) With respect to a joint resolution described in
subsection (a) of the House receiving the joint resolution--
(A) the procedure in that House shall be the same
as if no joint resolution had been received from the
other House; but
(B) the vote on final passage shall be on the joint
resolution of the other House.
SEC. 634. DEFINITIONS.
For purposes of this subtitle:
(1) The term ``Federal financial agency'' means the
Consumer Financial Opportunity Commission, Board of Governors
of the Federal Reserve System, the Commodity Futures Trading
Commission, the Federal Deposit Insurance Corporation, the
Federal Housing Finance Agency, the Office of the Comptroller
of the Currency, the National Credit Union Administration, and
the Securities and Exchange Commission.
(2) The term ``major rule'' means any rule, including an
interim final rule, that the Administrator of the Office of
Information and Regulatory Affairs of the Office of Management
and Budget finds has resulted in or is likely to result in--
(A) an annual effect on the economy of $100 million
or more;
(B) a major increase in costs or prices for
consumers, individual industries, Federal, State, or
local government agencies, or geographic regions; or
(C) significant adverse effects on competition,
employment, investment, productivity, innovation, or on
the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic and
export markets.
(3) The term ``nonmajor rule'' means any rule that is not a
major rule.
(4) The term ``rule'' has the meaning given such term in
section 551 of title 5, United States Code, except that such
term does not include--
(A) any rule of particular applicability, including
a rule that approves or prescribes for the future
rates, wages, prices, services, or allowances
therefore, corporate or financial structures,
reorganizations, mergers, or acquisitions thereof, or
accounting practices or disclosures bearing on any of
the foregoing;
(B) any rule relating to agency management or
personnel; or
(C) any rule of agency organization, procedure, or
practice that does not substantially affect the rights
or obligations of non-agency parties.
(5) The term ``submission date or publication date'',
except as otherwise provided in this subtitle, means--
(A) in the case of a major rule, the date on which
the Congress receives the report submitted under
section 631(a)(1)(A); and
(B) in the case of a nonmajor rule, the later of--
(i) the date on which the Congress receives
the report submitted under section
631(a)(1)(A); and
(ii) the date on which the nonmajor rule is
published in the Federal Register, if so
published.
SEC. 635. JUDICIAL REVIEW.
(a) No determination, finding, action, or omission under this
subtitle shall be subject to judicial review.
(b) Notwithstanding subsection (a), a court may determine whether a
Federal financial agency has completed the necessary requirements under
this subtitle for a rule to take effect.
(c) The enactment of a joint resolution of approval under section
632 shall not be interpreted to serve as a grant or modification of
statutory authority by Congress for the promulgation of a rule, shall
not extinguish or affect any claim, whether substantive or procedural,
against any alleged defect in a rule, and shall not form part of the
record before the court in any judicial proceeding concerning a rule
except for purposes of determining whether or not the rule is in
effect.
SEC. 636. EFFECTIVE DATE OF CERTAIN RULES.
Notwithstanding section 631--
(1) any rule that establishes, modifies, opens, closes, or
conducts a regulatory program for a commercial, recreational,
or subsistence activity related to hunting, fishing, or
camping; or
(2) any rule other than a major rule which the Federal
financial agency for good cause finds (and incorporates the
finding and a brief statement of reasons therefore in the rule
issued) that notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public interest,
shall take effect at such time as the Federal financial agency
promulgating the rule determines.
SEC. 637. BUDGETARY EFFECTS OF RULES SUBJECT TO SECTION 632 OF THE
FINANCIAL CHOICE ACT OF 2016.
Section 257(b)(2) of the Balanced Budget and Emergency Deficit
Control Act of 1985 is amended by adding at the end the following new
subparagraph:
``(E) Budgetary effects of rules subject to section 632 of
the financial choice act of 2016.--Any rules subject to the
congressional approval procedure set forth in section 632 of
the Financial CHOICE Act of 2016 affecting budget authority,
outlays, or receipts shall be assumed to be effective unless it
is not approved in accordance with such section.''.
Subtitle C--Judicial Review of Agency Actions
SEC. 641. SCOPE OF JUDICIAL REVIEW OF AGENCY ACTIONS.
(a) In General.--Notwithstanding any other provision of law, in any
judicial review of an agency action pursuant to chapter 7 of title 5,
United States Code, to the extent necessary to decision and when
presented, the reviewing court shall determine the meaning or
applicability of the terms of an agency action and decide de novo all
relevant questions of law, including the interpretation of
constitutional and statutory provisions, and rules made by an agency.
Notwithstanding any other provision of law, this section shall apply in
any action for judicial review of agency action authorized under any
provision of law. No law may exempt any such civil action from the
application of this section except by specific reference to this
section.
(b) Agency Defined.--For purposes of this section, the term
``agency'' means the Consumer Financial Opportunity Commission, the
Board of Governors of the Federal Reserve System, the Commodity Futures
Trading Commission, the Federal Deposit Insurance Corporation, the
Federal Housing Finance Agency, the Office of the Comptroller of the
Currency, the National Credit Union Administration, and the Securities
and Exchange Commission.
Subtitle D--Leadership of Financial Regulators
SEC. 651. FEDERAL DEPOSIT INSURANCE CORPORATION.
Section 2 of the Federal Deposit Insurance Act (12 U.S.C. 1812) is
amended--
(1) in subsection (a)(1), by striking ``5 members'' and all
that follows through ``3 of whom'' and inserting the following:
``5 members, who'';
(2) by amending subsection (d) to read as follows:
``(d) Vacancy.--Any vacancy on the Board of Directors shall be
filled in the manner in which the original appointment was made.''; and
(3) in subsection (f)--
(A) by striking paragraph (2); and
(B) by redesignating paragraph (3) as paragraph
(2).
SEC. 652. FEDERAL HOUSING FINANCE AGENCY.
(a) Establishment of Board.--Section 1312 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4512)
is amended--
(1) in the heading of such section, by striking
``director'' and inserting ``board of directors''; and
(2) by striking subsections (a) and (b) and inserting the
following:
``(a) Establishment.--There is established the Board of Directors
of the Agency, which shall serve as the head of the Agency.
``(b) Board of Directors.--
``(1) Composition of the board.--
``(A) In general.--The Board shall be composed of 5
members who shall be appointed by the President, by and
with the advice and consent of the Senate, from among
individuals who--
``(i) are citizens of the United States;
and
``(ii) have a demonstrated understanding of
financial management or oversight, and have a
demonstrated understanding of capital markets,
including the mortgage securities markets and
housing finance.
``(B) Staggering.--The members of the Board shall
serve staggered terms, which initially shall be
established by the President for terms of 1, 2, 3, 4,
and 5 years, respectively.
``(C) Terms.--
``(i) In general.--Each member of the
Board, including the Chair, shall serve for a
term of 5 years.
``(ii) Removal.--The President may remove
any member of the Board for inefficiency,
neglect of duty, or malfeasance in office.
``(iii) Vacancies.--Any member of the Board
appointed to fill a vacancy occurring before
the expiration of the term to which that
member's predecessor was appointed (including
the Chair) shall be appointed only for the
remainder of the term.
``(iv) Continuation of service.--Each
member of the Board may continue to serve after
the expiration of the term of office to which
that member was appointed until a successor has
been appointed by the President and confirmed
by the Senate, except that a member may not
continue to serve more than 1 year after the
date on which that member's term would
otherwise expire.
``(v) Other employment prohibited.--No
member of the Board shall engage in any other
business, vocation, or employment.
``(2) Affiliation.--Not more than 3 members of the Board
shall be members of any one political party.
``(3) Chair of the board.--
``(A) Appointment.--The Chair of the Board shall be
appointed by the President.
``(B) Authority.--The Chair shall be the principal
executive officer of the Agency, and shall exercise all
of the executive and administrative functions of the
Agency, including with respect to--
``(i) the appointment and supervision of
personnel employed under the Agency (other than
personnel employed regularly and full time in
the immediate offices of members of the Board
other than the Chair);
``(ii) the distribution of business among
personnel appointed and supervised by the Chair
and among administrative units of the Agency;
and
``(iii) the use and expenditure of funds.
``(C) Limitation.--In carrying out any of the
Chair's functions under the provisions of this
paragraph the Chair shall be governed by general
policies of the Agency and by such regulatory
decisions, findings, and determinations as the Agency
may by law be authorized to make.
``(4) No impairment by reason of vacancies.--No vacancy in
the members of the Board shall impair the right of the
remaining members of the Board to exercise all the powers of
the Board. Three members of the Board shall constitute a quorum
for the transaction of business, except that if there are only
3 members serving on the Board because of vacancies in the
Board, 2 members of the Board shall constitute a quorum for the
transaction of business. If there are only 2 members serving on
the Board because of vacancies in the Board, 2 members shall
constitute a quorum for the 6-month period beginning on the
date of the vacancy which caused the number of Board members to
decline to 2.
``(5) Compensation.--
``(A) Chair.--The Chair shall receive compensation
at the rate prescribed for level I of the Executive
Schedule under section 5313 of title 5, United States
Code.
``(B) Other members of the board.--The 4 other
members of the Board shall each receive compensation at
the rate prescribed for level II of the Executive
Schedule under section 5314 of title 5, United States
Code.
``(6) Initial quorum established.--During any time period
prior to the confirmation of at least two members of the Board,
one member of the Board shall constitute a quorum for the
transaction of business. Following the confirmation of at least
2 additional members of the Board, the quorum requirements of
paragraph (4) shall apply.''.
(b) Conforming Amendment.--Section 5313 of title 5, United States
Code, is amended by striking ``Director of the Federal Housing Finance
Agency.''.
(c) Deeming.--Any reference in a law, regulation, document, paper,
or other record of the United States to the position of the Director of
the Federal Housing Finance Agency shall be deemed a reference to the
Board of Directors of the Federal Housing Finance Agency.
SEC. 653. NATIONAL CREDIT UNION ADMINISTRATION.
Section 102 of the Federal Credit Union Act (12 U.S.C. 1752a) is
amended--
(1) in subsection (b)(1)--
(A) by striking ``three'' and inserting ``five'';
and
(B) by striking ``two'' and inserting ``three'';
and
(2) by amending subsection (c) to read as follows:
``(c) Terms.--The term of office of each member of the Board shall
be five years, and the members shall serve staggered terms. Board
members shall not be appointed to succeed themselves. Any Board member
may continue to serve as such after the expiration of said member's
term until a successor has qualified.''.
SEC. 654. OFFICE OF THE COMPTROLLER OF THE CURRENCY.
(a) Establishment of Board.--Subsection (b) of section 324 of the
Revised Statutes of the United States (12 U.S.C. 1) is amended to read
as follows:
``(b) Board of Directors.--
``(1) Establishment.--There is established the Board of
Directors of the Office of the Comptroller of the Currency
(hereinafter referred to as the `Board'), which shall serve as
the head of the Office.
``(2) Composition of the board.--
``(A) In general.--The Board shall be composed of 5
members who shall be appointed by the President, by and
with the advice and consent of the Senate, from among
individuals who--
``(i) are citizens of the United States;
and
``(ii) have strong competencies and
experiences related to the banking industry.
``(B) Staggering.--The members of the Board shall
serve staggered terms, which initially shall be
established by the President for terms of 1, 2, 3, 4,
and 5 years, respectively.
``(C) Terms.--
``(i) In general.--Each member of the
Board, including the Chair, shall serve for a
term of 5 years.
``(ii) Removal.--The President may remove
any member of the Board for inefficiency,
neglect of duty, or malfeasance in office.
``(iii) Vacancies.--Any member of the Board
appointed to fill a vacancy occurring before
the expiration of the term to which that
member's predecessor was appointed (including
the Chair) shall be appointed only for the
remainder of the term.
``(iv) Continuation of service.--Each
member of the Board may continue to serve after
the expiration of the term of office to which
that member was appointed until a successor has
been appointed by the President and confirmed
by the Senate, except that a member may not
continue to serve more than 1 year after the
date on which that member's term would
otherwise expire.
``(v) Other employment prohibited.--No
member of the Board shall engage in any other
business, vocation, or employment.
``(3) Affiliation.--Not more than 3 members of the Board
shall be members of any one political party.
``(4) Chair of the board.--
``(A) Appointment.--The Chair of the Board shall be
appointed by the President.
``(B) Authority.--The Chair shall be the principal
executive officer of the Office, and shall exercise all
of the executive and administrative functions of the
Office, including with respect to--
``(i) the appointment and supervision of
personnel employed under the Office (other than
personnel employed regularly and full time in
the immediate offices of members of the Board
other than the Chair);
``(ii) the distribution of business among
personnel appointed and supervised by the Chair
and among administrative units of the Office;
and
``(iii) the use and expenditure of funds.
``(C) Limitation.--In carrying out any of the
Chair's functions under the provisions of this
paragraph the Chair shall be governed by general
policies of the Office and by such regulatory
decisions, findings, and determinations as the Office
may by law be authorized to make.
``(5) No impairment by reason of vacancies.--No vacancy in
the members of the Board shall impair the right of the
remaining members of the Board to exercise all the powers of
the Board. Three members of the Board shall constitute a quorum
for the transaction of business, except that if there are only
3 members serving on the Board because of vacancies in the
Board, 2 members of the Board shall constitute a quorum for the
transaction of business. If there are only 2 members serving on
the Board because of vacancies in the Board, 2 members shall
constitute a quorum for the 6-month period beginning on the
date of the vacancy which caused the number of Board members to
decline to 2.
``(6) Compensation.--
``(A) Chair.--The Chair shall receive compensation
at the rate prescribed for level I of the Executive
Schedule under section 5313 of title 5, United States
Code.
``(B) Other members of the board.--The 4 other
members of the Board shall each receive compensation at
the rate prescribed for level II of the Executive
Schedule under section 5314 of title 5, United States
Code.
``(7) Initial quorum established.--During any time period
prior to the confirmation of at least two members of the Board,
one member of the Board shall constitute a quorum for the
transaction of business. Following the confirmation of at least
2 additional members of the Board, the quorum requirements of
paragraph (5) shall apply.''.
(b) Conforming Amendment.--Section 5314 of title 5, United States
Code, is amended by striking ``Comptroller of the Currency.''.
(c) Deeming.--Any reference in a law, regulation, document, paper,
or other record of the United States to the position of the Comptroller
of the Currency shall be deemed a reference to the Board of Directors
of the Office of the Comptroller of the Currency.
Subtitle E--Congressional Oversight of Appropriations
SEC. 661. BRINGING THE FEDERAL DEPOSIT INSURANCE CORPORATION INTO THE
REGULAR APPROPRIATIONS PROCESS.
(a) In General.--Section 10 of the Federal Deposit Insurance Act
(12 U.S.C. 1820) is amended--
(1) in subsection (a)--
(A) by striking ``(a) The'' and inserting the
following:
``(a) Powers.--
``(1) In general.--The'';
(B) by inserting ``, subject to paragraph (2) and
subsection (l),'' after ``The Board of Directors of the
Corporation''; and
(C) by adding at the end the following new
paragraph:
``(2) Appropriations requirement.--The Corporation may only
incur obligations or allow and pay expenses pursuant to an
appropriations Act, other than with respect to obligations or
expenses paid for with funds from the Deposit Insurance Fund or
incurred, allowed, or paid for the purpose of carrying out the
insurance function of the Corporation.''; and
(2) by adding at the end the following new subsection:
``(l) Non-insurance Fees as Offsetting Collections.--Any fees
collected by the Corporation, except pursuant to section 5(d), shall be
deposited and credited as offsetting collections to the account
providing appropriations to the Corporation.''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to expenses paid and fees collected on or after the
date that is 90 days after the date of the enactment of the first
appropriation Act that provides for appropriations to the Federal
Deposit Insurance Corporation and that is enacted after the date of the
enactment of this Act.
SEC. 662. BRINGING THE FEDERAL HOUSING FINANCE AGENCY INTO THE REGULAR
APPROPRIATIONS PROCESS.
(a) In General.--Section 1316(f) of the Housing and Community
Development Act of 1992 (12 U.S.C. 4516(f)) is amended to read as
follows:
``(f) Appropriations Requirement; Assessments Deposited as
Offsetting Collections.--
``(1) Appropriations requirement.--The Agency may only
incur obligations or allow and pay expenses pursuant to an
appropriations Act.
``(2) Offsetting collections.--Any assessments or other
fees collected by the Agency shall be deposited and credited as
offsetting collections to the account providing appropriations
to the Agency.''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to expenses paid and fees collected on or after the
date that is 90 days after the date of the enactment of the first
appropriation Act that provides for appropriations to the Federal
Housing Finance Agency and that is enacted after the date of the
enactment of this Act.
SEC. 663. BRINGING THE NATIONAL CREDIT UNION ADMINISTRATION INTO THE
REGULAR APPROPRIATIONS PROCESS.
(a) In General.--Section 105 of the Federal Credit Union Act (12
U.S.C. 1755) is amended by striking subsections (d) and (e) and
inserting the following:
``(d) Appropriations Requirement.--The Administration may only
incur obligations or allow and pay expenses pursuant to an
appropriations Act, other than with respect to obligations or expenses
paid for with funds from the National Credit Union Share Insurance Fund
or incurred, allowed, or paid for the purpose of carrying out the
insurance function of the Administration.
``(e) Non-insurance Fees as Offsetting Collections.--Any fees
collected by the Administration, except for insurance fees collected
under title II, shall be deposited and credited as offsetting
collections to the account providing appropriations to the
Administration.''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to expenses paid and fees collected on or after the
date that is 90 days after the date of the enactment of the first
appropriation Act that provides for appropriations to the National
Credit Union Administration and that is enacted after the date of the
enactment of this Act.
SEC. 664. BRINGING THE OFFICE OF THE COMPTROLLER OF THE CURRENCY INTO
THE REGULAR APPROPRIATIONS PROCESS.
(a) In General.--Section 5240A of the Revised Statutes of the
United States is amended--
(1) by striking ``Sec. 5240A. The Comptroller of the
Currency may'' and inserting the following:
``SEC. 5240A. APPROPRIATIONS REQUIREMENT; ASSESSMENTS DEPOSITED AS
OFFSETTING COLLECTIONS.
``(a) In General.--The Board of Directors of the Office of the
Comptroller of the Currency may'';
(2) by striking ``Funds derived'' and all that follows
through the end of the section; and
(3) by adding at the end the following:
``(b) Appropriations Requirement.--The Chair of the Board of
Directors of the Office of the Comptroller of the Currency may only
incur obligations or allow and pay expenses pursuant to an
appropriations Act.
``(c) Offsetting Collections.--Any assessments or other fees
collected by the Chair shall be deposited and credited as offsetting
collections to the account providing appropriations to the Board of
Directors of the Office of the Comptroller of the Currency.''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to expenses paid and fees collected on or after the
date that is 90 days after the date of the enactment of the first
appropriation Act that provides for appropriations to the Board of
Directors of the Office of the Comptroller of the Currency and that is
enacted after the date of the enactment of this Act.
SEC. 665. BRINGING THE NON-MONETARY POLICY RELATED FUNCTIONS OF THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM INTO THE
REGULAR APPROPRIATIONS PROCESS.
The Federal Reserve Act is amended by inserting after section 11B
the following:
``SEC. 11C. APPROPRIATIONS REQUIREMENT FOR NON-MONETARY POLICY RELATED
ADMINISTRATIVE COSTS.
``(a) Appropriations Requirement.--The Board of Governors of the
Federal Reserve System and the Federal reserve banks may only incur
obligations or allow and pay expenses with respect to non-monetary
policy related administrative costs pursuant to an appropriations Act.
``(b) Earnings and Assessments Used to Recover the Cost of
Appropriations.--
``(1) In general.--Except as provided under paragraph (2)
and notwithstanding any other provision of law, all earnings of
the Board of Governors of the Federal Reserve System and the
Federal reserve banks and all amounts collected pursuant to
section 11(t) that would, absent this section, be used to fund
the non-monetary policy related administrative costs of the
Board of Governors of the Federal Reserve System and each of
the Federal reserve banks shall be deposited into the general
fund of the Treasury and credited as offsetting collections for
the amounts appropriated to fund such non-monetary policy
related administrative costs.
``(2) No deposits in excess of appropriations.--The amount
deposited pursuant to paragraph (1) with respect to a fiscal
year shall not exceed the amount appropriated to fund the non-
monetary policy related administrative costs of the Board of
Governors of the Federal Reserve System and each of the Federal
reserve banks for such fiscal year.
``(c) Definitions.--For purposes of this section:
``(1) Monetary policy.--The term `monetary policy' means a
strategy for producing a generally acceptable exchange medium
that supports the productive employment of economic resources
by reliably serving as both a unit of account and store of
value.
``(2) Non-monetary policy related administrative costs.--
The term `non-monetary policy related administrative costs'
means administrative costs not related to the conduct of
monetary policy, and include--
``(A) direct operating expenses for supervising and
regulating entities supervised and regulated by the
Board of Governors of the Federal Reserve System,
including conducting examinations, conducting stress
tests, communicating with the entities regarding
supervisory matters and laws, and regulations;
``(B) operating expenses for activities integral to
carrying out supervisory and regulatory
responsibilities, such as training staff in the
supervisory function, research and analysis functions
including library subscription services, and collecting
and processing regulatory reports filed by supervised
institutions; and
``(C) support, overhead, and pension expenses
related to the items described under subparagraphs (A)
and (B).''.
Subtitle F--International Processes
SEC. 671. REQUIREMENTS FOR INTERNATIONAL PROCESSES.
(a) Board of Governors Requirements.--Section 11 of the Federal
Reserve Act (12 U.S.C. 248), as amended by section 706, is further
amended by adding at the end the following new subsection:
``(w) International Processes.--
``(1) Notice of process; consultation.--At least 30
calendar days before any member or employee of the Board of
Governors of the Federal Reserve System participates in a
process of setting financial standards as a part of any foreign
or multinational entity, the Board of Governors shall--
``(A) issue a notice of the process, including the
subject matter, scope, and goals of the process, to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate;
``(B) make such notice available to the public,
including on the website of the Board of Governors; and
``(C) solicit public comment, and consult with the
committees described under subparagraph (A), with
respect to the subject matter, scope, and goals of the
process.
``(2) Public reports on process.--After the end of any
process described under paragraph (1), the Board of Governors
shall issue a public report on the topics that were discussed
during the process and any new or revised rulemakings or policy
changes that the Board of Governors believes should be
implemented as a result of the process.
``(3) Notice of agreements; consultation.--At least 90
calendar days before any member or employee of the Board of
Governors of the Federal Reserve System participates in a
process of setting financial standards as a part of any foreign
or multinational entity, the Board of Governors shall--
``(A) issue a notice of agreement to the Committee
on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban
Affairs of the Senate;
``(B) make such notice available to the public,
including on the website of the Board of Governors; and
``(C) consult with the committees described under
subparagraph (A) with respect to the nature of the
agreement and any anticipated effects such agreement
will have on the economy.
``(4) Definition.--For purposes of this subsection, the
term `process' shall include any official proceeding or meeting
on financial regulation of a recognized international
organization with authority to set financial standards on a
global or regional level, including the Financial Stability
Board, the Basel Committee on Banking Supervision (or a similar
organization), and the International Association of Insurance
Supervisors (or a similar organization).''.
(b) FDIC Requirements.--The Federal Deposit Insurance Act (12
U.S.C. 1811 et seq.) is amended by adding at the end the following new
section:
``SEC. 51. INTERNATIONAL PROCESSES.
``(a) Notice of Process; Consultation.--At least 30 calendar days
before the Board of Directors participates in a process of setting
financial standards as a part of any foreign or multinational entity,
the Board of Directors shall--
``(1) issue a notice of the process, including the subject
matter, scope, and goals of the process, to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate;
``(2) make such notice available to the public, including
on the website of the Corporation; and
``(3) solicit public comment, and consult with the
committees described under paragraph (1), with respect to the
subject matter, scope, and goals of the process.
``(b) Public Reports on Process.--After the end of any process
described under subsection (a), the Board of Directors shall issue a
public report on the topics that were discussed at the process and any
new or revised rulemakings or policy changes that the Board of
Directors believes should be implemented as a result of the process.
``(c) Notice of Agreements; Consultation.--At least 90 calendar
days before the Board of Directors participates in a process of setting
financial standards as a part of any foreign or multinational entity,
the Board of Directors shall--
``(1) issue a notice of agreement to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate;
``(2) make such notice available to the public, including
on the website of the Corporation; and
``(3) consult with the committees described under paragraph
(1) with respect to the nature of the agreement and any
anticipated effects such agreement will have on the economy.
``(d) Definition.--For purposes of this section, the term `process'
shall include any official proceeding or meeting on financial
regulation of a recognized international organization with authority to
set financial standards on a global or regional level, including the
Financial Stability Board, the Basel Committee on Banking Supervision
(or a similar organization), and the International Association of
Insurance Supervisors (or a similar organization).''.
(c) Treasury Requirements.--Section 325 of title 31, United States
Code, is amended by adding at the end the following new subsection:
``(d) International Processes.--
``(1) Notice of process; consultation.--At least 30
calendar days before the Secretary participates in a process of
setting financial standards as a part of any foreign or
multinational entity, the Secretary shall--
``(A) issue a notice of the process, including the
subject matter, scope, and goals of the process, to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate;
``(B) make such notice available to the public,
including on the website of the Department of the
Treasury; and
``(C) solicit public comment, and consult with the
committees described under subparagraph (A), with
respect to the subject matter, scope, and goals of the
process.
``(2) Public reports on process.--After the end of any
process described under paragraph (1), the Secretary shall
issue a public report on the topics that were discussed at the
process and any new or revised rulemakings or policy changes
that the Secretary believes should be implemented as a result
of the process.
``(3) Notice of agreements; consultation.--At least 90
calendar days before the Secretary participates in a process of
setting financial standards as a part of any foreign or
multinational entity, the Secretary shall--
``(A) issue a notice of agreement to the Committee
on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban
Affairs of the Senate;
``(B) make such notice available to the public,
including on the website of the Department of the
Treasury; and
``(C) consult with the committees described under
subparagraph (A) with respect to the nature of the
agreement and any anticipated effects such agreement
will have on the economy.
``(4) Definition.--For purposes of this subsection, the
term `process' shall include any official proceeding or meeting
on financial regulation of a recognized international
organization with authority to set financial standards on a
global or regional level, including the Financial Stability
Board, the Basel Committee on Banking Supervision (or a similar
organization), and the International Association of Insurance
Supervisors (or a similar organization).''.
(d) OCC Requirements.--Chapter one of title LXII of the Revised
Statutes of the United States (12 U.S.C. 21 et seq.) is amended--
(1) by adding at the end the following new section:
``SEC. 5156B. INTERNATIONAL PROCESSES.
``(a) Notice of Process; Consultation.--At least 30 calendar days
before the Board of Directors of the Office of the Comptroller of the
Currency participates in a process of setting financial standards as a
part of any foreign or multinational entity, the Board of Directors
shall--
``(1) issue a notice of the process, including the subject
matter, scope, and goals of the process, to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate;
``(2) make such notice available to the public, including
on the website of the Office of the Comptroller of the
Currency; and
``(3) solicit public comment, and consult with the
committees described under paragraph (1), with respect to the
subject matter, scope, and goals of the process.
``(b) Public Reports on Process.--After the end of any process
described under subsection (a), the Board of Directors shall issue a
public report on the topics that were discussed at the process and any
new or revised rulemakings or policy changes that the Board of
Directors believes should be implemented as a result of the process.
``(c) Notice of Agreements; Consultation.--At least 90 calendar
days before the Board of Directors participates in a process of setting
financial standards as a part of any foreign or multinational entity,
the Board of Directors shall--
``(1) issue a notice of agreement to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate;
``(2) make such notice available to the public, including
on the website of the Office of the Comptroller of the
Currency; and
``(3) consult with the committees described under paragraph
(1) with respect to the nature of the agreement and any
anticipated effects such agreement will have on the economy.
``(d) Definition.--For purposes of this section, the term `process'
shall include any official proceeding or meeting on financial
regulation of a recognized international organization with authority to
set financial standards on a global or regional level, including the
Financial Stability Board, the Basel Committee on Banking Supervision
(or a similar organization), and the International Association of
Insurance Supervisors (or a similar organization).''; and
(2) in the table of contents for such chapter, by adding at
the end the following new item:
``5156B. International processes.''.
(e) Securities and Exchange Commission Requirements.--Section 4 of
the Securities Exchange Act of 1934 (15 U.S.C. 78d) is amended by
adding at the end the following new subsection:
``(j) International Processes.--
``(1) Notice of process; consultation.--At least 30
calendar days before the Commission participates in a process
of setting financial standards as a part of any foreign or
multinational entity, the Commission shall--
``(A) issue a notice of the process, including the
subject matter, scope, and goals of the process, to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate;
``(B) make such notice available to the public,
including on the website of the Commission; and
``(C) solicit public comment, and consult with the
committees described under subparagraph (A), with
respect to the subject matter, scope, and goals of the
process.
``(2) Public reports on process.--After the end of any
process described under paragraph (1), the Commission shall
issue a public report on the topics that were discussed at the
process and any new or revised rulemakings or policy changes
that the Commission believes should be implemented as a result
of the process.
``(3) Notice of agreements; consultation.--At least 90
calendar days before the Commission participates in a process
of setting financial standards as a part of any foreign or
multinational entity, the Commission shall--
``(A) issue a notice of agreement to the Committee
on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban
Affairs of the Senate;
``(B) make such notice available to the public,
including on the website of the Commission; and
``(C) consult with the committees described under
subparagraph (A) with respect to the nature of the
agreement and any anticipated effects such agreement
will have on the economy.
``(4) Definition.--For purposes of this subsection, the
term `process' shall include any official proceeding or meeting
on financial regulation of a recognized international
organization with authority to set financial standards on a
global or regional level, including the Financial Stability
Board, the Basel Committee on Banking Supervision (or a similar
organization), and the International Association of Insurance
Supervisors (or a similar organization).''.
(f) Commodity Futures Trading Commission Requirements.--Section 2
of the Commodity Exchange Act (7 U.S.C. 2) is amended by adding at the
end the following:
``(k) International Processes.--
``(1) Notice of process; consultation.--At least 30
calendar days before the Commission participates in a process
of setting financial standards as a part of any foreign or
multinational entity, the Commission shall--
``(A) issue a notice of the process, including the
subject matter, scope, and goals of the process, to--
``(i) the Committees on Financial Services
and Agriculture of the House of
Representatives; and
``(ii) the Committees on Banking, Housing,
and Urban Affairs and Agriculture, Nutrition,
and Forestry of the Senate;
``(B) make such notice available to the public,
including on the website of the Commission; and
``(C) solicit public comment, and consult with the
committees described under subparagraph (A), with
respect to the subject matter, scope, and goals of the
process.
``(2) Public reports on process.--After the end of any
process described under paragraph (1), the Commission shall
issue a public report on the topics that were discussed during
the process and any new or revised rulemakings or policy
changes that the Commission believes should be implemented as a
result of the process.
``(3) Notice of agreements; consultation.--At least 90
calendar days before the Commission participates in a process
of setting financial standards as a part of any foreign or
multinational entity, the Commission shall--
``(A) issue a notice of agreement to--
``(i) the Committees on Financial Services
and Agriculture of the House of
Representatives; and
``(ii) the Committees on Banking, Housing,
and Urban Affairs and Agriculture, Nutrition,
and Forestry of the Senate;
``(B) make such notice available to the public,
including on the website of the Commission; and
``(C) consult with the committees described under
subparagraph (A) with respect to the nature of the
agreement and any anticipated effects such agreement
will have on the economy.
``(4) Definition.--For purposes of this subsection, the
term `process' shall include any official proceeding or meeting
on financial regulation of a recognized international
organization with authority to set financial standards on a
global or regional level, including the Financial Stability
Board, the Basel Committee on Banking Supervision (or a similar
organization), and the International Association of Insurance
Supervisors (or a similar organization).''.
TITLE VII--FED OVERSIGHT REFORM AND MODERNIZATION
SEC. 701. REQUIREMENTS FOR POLICY RULES OF THE FEDERAL OPEN MARKET
COMMITTEE.
The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended by
inserting after section 2B the following new section:
``SEC. 2C. DIRECTIVE POLICY RULES OF THE FEDERAL OPEN MARKET COMMITTEE.
``(a) Definitions.--In this section the following definitions shall
apply:
``(1) Appropriate congressional committees.--The term
`appropriate congressional committees' means the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate.
``(2) Directive policy rule.--The term `Directive Policy
Rule' means a policy rule developed by the Federal Open Market
Committee that meets the requirements of subsection (c) and
that provides the basis for the Open Market Operations
Directive.
``(3) GDP.--The term `GDP' means the gross domestic product
of the United States as computed and published by the
Department of Commerce.
``(4) Intermediate policy input.--The term `Intermediate
Policy Input'--
``(A) may include any variable determined by the
Federal Open Market Committee as a necessary input to
guide open-market operations;
``(B) shall include an estimate of, and the method
of calculation for, the current rate of inflation or
current inflation expectations; and
``(C) shall include, specifying whether the
variable or estimate is historical, current, or a
forecast and the method of calculation, at least one
of--
``(i) an estimate of real GDP, nominal GDP,
or potential GDP;
``(ii) an estimate of the monetary
aggregate compiled by the Board of Governors of
the Federal Reserve System and Federal reserve
banks; or
``(iii) an interactive variable or a net
estimate composed of the estimates described in
clauses (i) and (ii).
``(5) Legislative day.--The term `legislative day' means a
day on which either House of Congress is in session.
``(6) Open market operations directive.--The term `Open
Market Operations Directive' means an order to achieve a
specified Policy Instrument Target provided to the Federal
Reserve Bank of New York by the Federal Open Market Committee
pursuant to powers authorized under section 14 of this Act that
guide open-market operations.
``(7) Policy instrument.--The term `Policy Instrument'
means--
``(A) the nominal Federal funds rate;
``(B) the nominal rate of interest paid on
nonborrowed reserves; or
``(C) the discount window primary credit interest
rate most recently published on the Federal Reserve
Statistical Release on selected interest rates (daily
or weekly), commonly referred to as the H.15 release.
``(8) Policy instrument target.--The term `Policy
Instrument Target' means the target for the Policy Instrument
specified in the Open Market Operations Directive.
``(9) Reference policy rule.--The term `Reference Policy
Rule' means a calculation of the nominal Federal funds rate as
equal to the sum of the following:
``(A) The rate of inflation over the previous four
quarters.
``(B) One-half of the percentage deviation of the
real GDP from an estimate of potential GDP.
``(C) One-half of the difference between the rate
of inflation over the previous four quarters and two
percent.
``(D) Two percent.
``(b) Submitting a Directive Policy Rule.--Not later than 48 hours
after the end of a meeting of the Federal Open Market Committee, the
Chairman of the Federal Open Market Committee shall submit to the
appropriate congressional committees and the Comptroller General of the
United States a Directive Policy Rule and a statement that identifies
the members of the Federal Open Market Committee who voted in favor of
the Rule.
``(c) Requirements for a Directive Policy Rule.--A Directive Policy
Rule shall--
``(1) identify the Policy Instrument the Directive Policy
Rule is designed to target;
``(2) describe the strategy or rule of the Federal Open
Market Committee for the systematic quantitative adjustment of
the Policy Instrument Target to respond to a change in the
Intermediate Policy Inputs;
``(3) include a function that comprehensively models the
interactive relationship between the Intermediate Policy
Inputs;
``(4) include the coefficients of the Directive Policy Rule
that generate the current Policy Instrument Target and a range
of predicted future values for the Policy Instrument Target if
changes occur in any Intermediate Policy Input;
``(5) describe the procedure for adjusting the supply of
bank reserves to achieve the Policy Instrument Target;
``(6) include a statement as to whether the Directive
Policy Rule substantially conforms to the Reference Policy Rule
and, if applicable--
``(A) an explanation of the extent to which it
departs from the Reference Policy Rule;
``(B) a detailed justification for that departure;
and
``(C) a description of the circumstances under
which the Directive Policy Rule may be amended in the
future;
``(7) include a certification that such Rule is expected to
support the economy in achieving stable prices and maximum
natural employment over the long term;
``(8) include a calculation that describes with
mathematical precision the expected annual inflation rate over
a 5-year period; and
``(9) include a plan to use the most accurate data, subject
to all historical revisions, for inputs into the Directive
Policy Rule and the Reference Policy Rule.
``(d) GAO Report.--The Comptroller General of the United States
shall compare the Directive Policy Rule submitted under subsection (b)
with the rule that was most recently submitted to determine whether the
Directive Policy Rule has materially changed. If the Directive Policy
Rule has materially changed, the Comptroller General shall, not later
than 7 days after each meeting of the Federal Open Market Committee,
prepare and submit a compliance report to the appropriate congressional
committees specifying whether the Directive Policy Rule submitted after
that meeting and the Federal Open Market Committee are in compliance
with this section.
``(e) Changing Market Conditions.--
``(1) Rule of construction.--Nothing in this Act shall be
construed to require that the plans with respect to the
systematic quantitative adjustment of the Policy Instrument
Target described under subsection (c)(2) be implemented if the
Federal Open Market Committee determines that such plans cannot
or should not be achieved due to changing market conditions.
``(2) GAO approval of update.--Upon determining that plans
described in paragraph (1) cannot or should not be achieved,
the Federal Open Market Committee shall submit an explanation
for that determination and an updated version of the Directive
Policy Rule to the Comptroller General of the United States and
the appropriate congressional committees not later than 48
hours after making the determination. The Comptroller General
shall, not later than 48 hours after receiving such updated
version, prepare and submit to the appropriate congressional
committees a compliance report determining whether such updated
version and the Federal Open Market Committee are in compliance
with this section.
``(f) Directive Policy Rule and Federal Open Market Committee Not
in Compliance.--
``(1) In general.--If the Comptroller General of the United
States determines that the Directive Policy Rule and the
Federal Open Market Committee are not in compliance with this
section in the report submitted pursuant to subsection (d), or
that the updated version of the Directive Policy Rule and the
Federal Open Market Committee are not in compliance with this
section in the report submitted pursuant to subsection (e)(2),
the Chairman of the Board of Governors of the Federal Reserve
System shall, if requested by the chairman of either of the
appropriate congressional committees, not later than 7
legislative days after such request, testify before such
committee as to why the Directive Policy Rule, the updated
version, or the Federal Open Market Committee is not in
compliance.
``(2) GAO audit.--Notwithstanding subsection (b) of section
714 of title 31, United States Code, upon submitting a report
of noncompliance pursuant to subsection (d) or subsection
(e)(2) and after the period of 7 legislative days described in
paragraph (1), the Comptroller General shall audit the conduct
of monetary policy by the Board of Governors of the Federal
Reserve System and the Federal Open Market Committee upon
request of the appropriate congressional committee. Such
committee may specify the parameters of such audit.
``(g) Congressional Hearings.--The Chairman of the Board of
Governors of the Federal Reserve System shall, if requested by the
chairman of either of the appropriate congressional committees and not
later than 7 legislative days after such request, appear before such
committee to explain any change to the Directive Policy Rule.''.
SEC. 702. FEDERAL OPEN MARKET COMMITTEE BLACKOUT PERIOD.
Section 12A of the Federal Reserve Act (12 U.S.C. 263) is amended
by adding at the end the following new subsection:
``(d) Blackout Period.--
``(1) In general.--During a blackout period, the only
public communications that may be made by members and staff of
the Committee with respect to macroeconomic or financial
developments or about current or prospective monetary policy
issues are the following:
``(A) The dissemination of published data, surveys,
and reports that have been cleared for publication by
the Board of Governors of the Federal Reserve System.
``(B) Answers to technical questions specific to a
data release.
``(C) Communications with respect to the prudential
or supervisory functions of the Board of Governors.
``(2) Blackout period defined.--For purposes of this
subsection, and with respect to a meeting of the Committee
described under subsection (a), the term `blackout period'
means the time period that--
``(A) begins immediately after midnight on the day
that is one week prior to the date on which such
meeting takes place; and
``(B) ends at midnight on the day after the date on
which such meeting takes place.
``(3) Exemption for chairman of the board of governors.--
Nothing in this section shall prohibit the Chairman of the
Board of Governors of the Federal Reserve System from
participating in or issuing public communications.''.
SEC. 703. MEMBERSHIP OF FEDERAL OPEN MARKET COMMITTEE.
Section 12A(a) of the Federal Reserve Act (12 U.S.C. 263(a)) is
amended--
(1) in the first sentence, by striking ``five'' and
inserting ``six'';
(2) in the second sentence, by striking ``One by the board
of directors'' and all that follows through the period at the
end and inserting the following: ``One by the boards of
directors of the Federal Reserve Banks of New York and Boston;
one by the boards of directors of the Federal Reserve Banks of
Philadelphia and Cleveland; one by the boards of directors of
the Federal Reserve Banks of Richmond and Atlanta; one by the
boards of directors of the Federal Reserve Banks of Chicago and
St. Louis; one by the boards of directors of the Federal
Reserve Banks of Minneapolis and Kansas City; and one by the
boards of directors of the Federal Reserve Banks of Dallas and
San Francisco.''; and
(3) by inserting after the second sentence the following:
``In odd numbered calendar years, one representative shall be
elected from each of the Federal Reserve Banks of Boston,
Philadelphia, Richmond, Chicago, Minneapolis, and Dallas. In
even-numbered calendar years, one representative shall be
elected from each of the Federal Reserve Banks of New York,
Cleveland, Atlanta, St. Louis, Kansas City, and San
Francisco.''.
SEC. 704. FREQUENCY OF TESTIMONY OF THE CHAIRMAN OF THE BOARD OF
GOVERNORS OF THE FEDERAL RESERVE SYSTEM TO CONGRESS.
(a) In General.--Section 2B of the Federal Reserve Act (12 U.S.C.
225b) is amended--
(1) by striking ``semi-annual'' each place it appears and
inserting ``quarterly''; and
(2) in subsection (a)(2)--
(A) by inserting ``and October 20'' after ``July
20'' each place it appears; and
(B) by inserting ``and May 20'' after ``February
20'' each place it appears.
(b) Conforming Amendment.--Paragraph (12) of section 10 of the
Federal Reserve Act (12 U.S.C. 247b(12)) is amended by striking ``semi-
annual'' and inserting ``quarterly''.
SEC. 705. VICE CHAIRMAN FOR SUPERVISION REPORT REQUIREMENT.
Paragraph (12) of section 10 of the Federal Reserve Act (12 U.S.C.
247(b)) is amended--
(1) by redesignating such paragraph as paragraph (11); and
(2) in such paragraph, by adding at the end the following:
``In each such appearance, the Vice Chairman for Supervision
shall provide written testimony that includes the status of all
pending and anticipated rulemakings that are being made by the
Board of Governors of the Federal Reserve System. If, at the
time of any appearance described in this paragraph, the
position of Vice Chairman for Supervision is vacant, the Vice
Chairman for the Board of Governors of the Federal Reserve
System (who has the responsibility to serve in the absence of
the Chairman) shall appear instead and provide the required
written testimony. If, at the time of any appearance described
in this paragraph, both Vice Chairman positions are vacant, the
Chairman of the Board of Governors of the Federal Reserve
System shall appear instead and provide the required written
testimony.''.
SEC. 706. SALARIES, FINANCIAL DISCLOSURES, AND OFFICE STAFF OF THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
(a) In General.--Section 11 of the Federal Reserve Act (12 U.S.C.
248) is amended--
(1) by redesignating the second subsection (s) (relating to
``Assessments, Fees, and Other Charges for Certain Companies'')
as subsection (t); and
(2) by adding at the end the following new subsections:
``(u) Ethics Standards for Members and Employees.--
``(1) Prohibited and restricted financial interests and
transactions.--The members and employees of the Board of
Governors of the Federal Reserve System shall be subject to the
provisions under section 4401.102 of title 5, Code of Federal
Regulations, to the same extent as such provisions apply to an
employee of the Securities and Exchange Commission.
``(2) Treatment of brokerage accounts and availability of
account statements.--The members and employees of the Board of
Governors of the Federal Reserve System shall--
``(A) disclose all brokerage accounts that they
maintain, as well as those in which they control
trading or have a financial interest (including managed
accounts, trust accounts, investment club accounts, and
the accounts of spouses or minor children who live with
the member or employee); and
``(B) with respect to any securities account that
the member or employee is required to disclose to the
Board of Governors, authorize their brokers and dealers
to send duplicate account statements directly to Board
of Governors.
``(3) Prohibitions related to outside employment and
activities.--The members and employees of the Board of
Governors of the Federal Reserve System shall be subject to the
prohibitions related to outside employment and activities
described under section 4401.103(c) of title 5, Code of Federal
Regulations, to the same extent as such prohibitions apply to
an employee of the Securities and Exchange Commission.
``(4) Additional ethics standards.--The members and
employees of the Board of Governors of the Federal Reserve
System shall be subject to--
``(A) the employee responsibilities and conduct
regulations of the Office of Personnel Management under
part 735 of title 5, Code of Federal Regulations;
``(B) the canons of ethics contained in subpart C
of part 200 of title 17, Code of Federal Regulations,
to the same extent as such subpart applies to the
employees of the Securities and Exchange Commission;
and
``(C) the regulations concerning the conduct of
members and employees and former members and employees
contained in subpart M of part 200 of title 17, Code of
Federal Regulations, to the same extent as such subpart
applies to the employees of the Securities and Exchange
Commission.
``(v) Disclosure of Staff Salaries and Financial Information.--The
Board of Governors of the Federal Reserve System shall make publicly
available, on the website of the Board of Governors, a searchable
database that contains the names of all members, officers, and
employees of the Board of Governors who receive an annual salary in
excess of the annual rate of basic pay for GS-15 of the General
Schedule, and--
``(1) the yearly salary information for such individuals,
along with any nonsalary compensation received by such
individuals; and
``(2) any financial disclosures required to be made by such
individuals.''.
(b) Office Staff for Each Member of the Board of Governors.--
Subsection (l) of section 11 of the Federal Reserve Act (12 U.S.C. 248)
is amended by adding at the end the following: ``Each member of the
Board of Governors of the Federal Reserve System may employ, at a
minimum, 2 individuals, with such individuals selected by such member
and the salaries of such individuals set by such member. A member may
employ additional individuals as determined necessary by the Board of
Governors.''.
SEC. 707. AMENDMENTS TO POWERS OF THE BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM.
(a) In General.--Section 13(3) of the Federal Reserve Act (12
U.S.C. 343(3)), as amended by section 221, is further amended--
(1) in subparagraph (A)--
(A) by inserting ``that pose a threat to the
financial stability of the United States'' after
``unusual and exigent circumstances''; and
(B) by inserting ``and by the affirmative vote of
not less than nine presidents of the Federal reserve
banks'' after ``five members'';
(2) in subparagraph (B)--
(A) in clause (i), by inserting at the end the
following: ``Federal reserve banks may not accept
equity securities issued by the recipient of any loan
or other financial assistance under this paragraph as
collateral. Not later than 6 months after the date of
enactment of this sentence, the Board shall, by rule,
establish--
``(I) a method for determining the
sufficiency of the collateral required
under this paragraph;
``(II) acceptable classes of
collateral;
``(III) the amount of any discount
of such value that the Federal reserve
banks will apply for purposes of
calculating the sufficiency of
collateral under this paragraph; and
``(IV) a method for obtaining
independent appraisals of the value of
collateral the Federal reserve banks
receive.''; and
(B) in clause (ii)--
(i) by striking the second sentence; and
(ii) by inserting after the first sentence
the following: ``A borrower shall not be
eligible to borrow from any emergency lending
program or facility unless the Board and all
federal banking regulators with jurisdiction
over the borrower certify that, at the time the
borrower initially borrows under the program or
facility, the borrower is not insolvent.'';
(3) by inserting ``financial institution'' before
``participant'' each place such term appears;
(4) in subparagraph (D)(i), by inserting ``financial
institution'' before ``participants''; and
(5) by adding at the end the following new subparagraphs:
``(E) Penalty rate.--
``(i) In general.--Not later than 6 months
after the date of enactment of this
subparagraph, the Board shall, with respect to
a recipient of any loan or other financial
assistance under this paragraph, establish by
rule a minimum interest rate on the principal
amount of any loan or other financial
assistance.
``(ii) Minimum interest rate defined.--In
this subparagraph, the term `minimum interest
rate' shall mean the sum of--
``(I) the average of the secondary
discount rate of all Federal Reserve
banks over the most recent 90-day
period; and
``(II) the average of the
difference between a distressed
corporate bond yield index (as defined
by rule of the Board) and a bond yield
index of debt issued by the United
States (as defined by rule of the
Board) over the most recent 90-day
period.
``(F) Financial institution participant defined.--
For purposes of this paragraph, the term `financial
institution participant'--
``(i) means a company that is predominantly
engaged in financial activities (as defined in
section 102(a) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (12 U.S.C.
5311(a))); and
``(ii) does not include an agency described
in subparagraph (W) of section 5312(a)(2) of
title 31, United States Code, or an entity
controlled or sponsored by such an agency.''.
(b) Conforming Amendment.--Section 11(r)(2)(A) of such Act is
amended--
(1) in clause (ii)(IV), by striking ``; and'' and inserting
a semicolon;
(2) in clause (iii), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following new clause:
``(iv) the available members secure the affirmative vote of
not less than nine presidents of the Federal reserve banks.''.
SEC. 708. INTEREST RATES ON BALANCES MAINTAINED AT A FEDERAL RESERVE
BANK BY DEPOSITORY INSTITUTIONS ESTABLISHED BY FEDERAL
OPEN MARKET COMMITTEE.
Subparagraph (A) of section 19(b)(12) of the Federal Reserve Act
(12 U.S.C. 461(b)(12)(A)) is amended by inserting ``established by the
Federal Open Market Committee'' after ``rate or rates''.
SEC. 709. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF
THE FEDERAL RESERVE SYSTEM.
(a) In General.--Notwithstanding section 714 of title 31, United
States Code, or any other provision of law, the Comptroller General of
the United States shall annually complete an audit of the Board of
Governors of the Federal Reserve System and the Federal reserve banks
under subsection (b) of such section 714 within 12 months after the
date of the enactment of this Act.
(b) Report.--
(1) In general.--Not later than 90 days after each audit
required pursuant to subsection (a) is completed, the
Comptroller General--
(A) shall submit to Congress a report on such
audit; and
(B) shall make such report available to the Speaker
of the House, the majority and minority leaders of the
House of Representatives, the majority and minority
leaders of the Senate, the Chairman and Ranking Member
of the committee and each subcommittee of jurisdiction
in the House of Representatives and the Senate, and any
other Member of Congress who requests the report.
(2) Contents.--The report under paragraph (1) shall include
a detailed description of the findings and conclusion of the
Comptroller General with respect to the audit that is the
subject of the report, together with such recommendations for
legislative or administrative action as the Comptroller General
may determine to be appropriate.
(c) Repeal of Certain Limitations.--Subsection (b) of section 714
of title 31, United States Code, is amended by striking the second
sentence.
(d) Technical and Conforming Amendments.--
(1) In general.--Section 714 of title 31, United States
Code, is amended--
(A) in subsection (d)(3), by striking ``or (f)''
each place such term appears;
(B) in subsection (e), by striking ``the third
undesignated paragraph of section 13'' and inserting
``section 13(3)''; and
(C) by striking subsection (f).
(2) Federal reserve act.--Subsection (s) (relating to
``Federal Reserve Transparency and Release of Information'') of
section 11 of the Federal Reserve Act (12 U.S.C. 248) is
amended--
(A) in paragraph (4)(A), by striking ``has the same
meaning as in section 714(f)(1)(A) of title 31, United
States Code'' and inserting ``means a program or
facility, including any special purpose vehicle or
other entity established by or on behalf of the Board
of Governors of the Federal Reserve System or a Federal
reserve bank, authorized by the Board of Governors
under section 13(3), that is not subject to audit under
section 714(e) of title 31, United States Code'';
(B) in paragraph (6), by striking ``or in section
714(f)(3)(C) of title 31, United States Code, the
information described in paragraph (1) and information
concerning the transactions described in section 714(f)
of such title,'' and inserting ``the information
described in paragraph (1)''; and
(C) in paragraph (7), by striking ``and section
13(3)(C), section 714(f)(3)(C) of title 31, United
States Code, and'' and inserting ``, section 13(3)(C),
and''.
SEC. 710. ESTABLISHMENT OF A CENTENNIAL MONETARY COMMISSION.
(a) Findings.--Congress finds the following:
(1) The Constitution endows Congress with the power ``to
coin money, regulate the value thereof''.
(2) Following the financial crisis known as the Panic of
1907, Congress established the National Monetary Commission to
provide recommendations for the reform of the financial and
monetary systems of the United States.
(3) Incorporating several of the recommendations of the
National Monetary Commission, Congress created the Federal
Reserve System in 1913. As currently organized, the Federal
Reserve System consists of the Board of Governors in
Washington, District of Columbia, and the Federal Reserve Banks
organized into 12 districts around the United States. The
stockholders of the 12 Federal Reserve Banks include national
and certain State-chartered commercial banks, which operate on
a fractional reserve basis.
(4) Originally, Congress gave the Federal Reserve System a
monetary mandate to provide an elastic currency, within the
context of a gold standard, in response to seasonal
fluctuations in the demand for currency.
(5) Congress also gave the Federal Reserve System a
financial stability mandate to serve as the lender of last
resort to solvent but illiquid banks during a financial crisis.
(6) In 1977, Congress changed the monetary mandate of the
Federal Reserve System to a dual mandate for maximum employment
and stable prices.
(7) Empirical studies and historical evidence, both within
the United States and in other countries, demonstrate that
price stability is desirable because both inflation and
deflation damage the economy.
(8) The economic challenge of recent years--most notably
the bursting of the housing bubble, the financial crisis of
2008, and the ensuing anemic recovery--have occurred at great
cost in terms of lost jobs and output.
(9) Policymakers are reexamining the structure and
functioning of financial institutions and markets to determine
what, if any, changes need to be made to place the financial
system on a stronger, more sustainable path going forward.
(10) The Federal Reserve System has taken extraordinary
actions in response to the recent economic challenges.
(11) The Federal Open Market Committee has engaged in
multiple rounds of quantitative easing, providing unprecedented
liquidity to financial markets, while committing to holding
short-term interest rates low for a seemingly indefinite
period, and pursuing a policy of credit allocation by
purchasing Federal agency debt and mortgage-backed securities.
(12) In the wake of the recent extraordinary actions of the
Federal Reserve System, Congress--consistent with its
constitutional responsibilities and as it has done periodically
throughout the history of the United States--has once again
renewed its examination of monetary policy.
(13) Central in such examination has been a renewed look at
what is the most proper mandate for the Federal Reserve System
to conduct monetary policy in the 21st century.
(b) Establishment of a Centennial Monetary Commission.--There is
established a commission to be known as the ``Centennial Monetary
Commission'' (in this section referred to as the ``Commission'').
(c) Study and Report on Monetary Policy.--
(1) Study.--The Commission shall--
(A) examine how United States monetary policy since
the creation of the Board of Governors of the Federal
Reserve System in 1913 has affected the performance of
the United States economy in terms of output,
employment, prices, and financial stability over time;
(B) evaluate various operational regimes under
which the Board of Governors of the Federal Reserve
System and the Federal Open Market Committee may
conduct monetary policy in terms achieving the maximum
sustainable level of output and employment and price
stability over the long term, including--
(i) discretion in determining monetary
policy without an operational regime;
(ii) price level targeting;
(iii) inflation rate targeting;
(iv) nominal gross domestic product
targeting (both level and growth rate);
(v) the use of monetary policy rules; and
(vi) the gold standard;
(C) evaluate the use of macro-prudential
supervision and regulation as a tool of monetary policy
in terms of achieving the maximum sustainable level of
output and employment and price stability over the long
term;
(D) evaluate the use of the lender-of-last-resort
function of the Board of Governors of the Federal
Reserve System as a tool of monetary policy in terms of
achieving the maximum sustainable level of output and
employment and price stability over the long term;
(E) recommend a course for United States monetary
policy going forward, including--
(i) the legislative mandate;
(ii) the operational regime;
(iii) the securities used in open market
operations; and
(iv) transparency issues; and
(F) consider the effects of the GDP output and
employment targets of the ``dual mandate'' (both from
the creation of the dual mandate in 1977 until the
present time and estimates of the future effect of the
dual mandate ) on--
(i) United States economic activity;
(ii) Federal Reserve actions; and
(iii) Federal debt.
(2) Report.--Not later than December 1, 2017, the
Commission shall submit to Congress and make publicly available
a report containing a statement of the findings and conclusions
of the Commission in carrying out the study under paragraph
(1), together with the recommendations the Commission considers
appropriate. In making such report, the Commission shall
specifically report on the considerations required under
paragraph (1)(F).
(d) Membership.--
(1) Number and appointment.--
(A) Appointed voting members.--The Commission shall
contain 12 voting members as follows:
(i) Six members appointed by the Speaker of
the House of Representatives, with four members
from the majority party and two members from
the minority party.
(ii) Six members appointed by the President
Pro Tempore of the Senate, with four members
from the majority party and two members from
the minority party.
(B) Chairman.--The Speaker of the House of
Representatives and the majority leader of the Senate
shall jointly designate one of the members of the
Commission as Chairman.
(C) Non-voting members.--The Commission shall
contain 2 non-voting members as follows:
(i) One member appointed by the Secretary
of the Treasury.
(ii) One member who is the president of a
district Federal reserve bank appointed by the
Chair of the Board of Governors of the Federal
Reserve System.
(2) Period of appointment.--Each member shall be appointed
for the life of the Commission.
(3) Timing of appointment.--All members of the Commission
shall be appointed not later than 30 days after the date of the
enactment of this section.
(4) Vacancies.--A vacancy in the Commission shall not
affect its powers, and shall be filled in the manner in which
the original appointment was made.
(5) Meetings.--
(A) Initial meeting.--The Commission shall hold its
initial meeting and begin the operations of the
Commission as soon as is practicable.
(B) Further meetings.--The Commission shall meet
upon the call of the Chair or a majority of its
members.
(6) Quorum.--Seven voting members of the Commission shall
constitute a quorum but a lesser number may hold hearings.
(7) Member of congress defined.--In this subsection, the
term ``Member of Congress'' means a Senator or a Representative
in, or Delegate or Resident Commissioner to, the Congress.
(e) Powers.--
(1) Hearings and sessions.--The Commission or, on the
authority of the Commission, any subcommittee or member
thereof, may, for the purpose of carrying out this section,
hold hearings, sit and act at times and places, take testimony,
receive evidence, or administer oaths as the Commission or such
subcommittee or member thereof considers appropriate.
(2) Contract authority.--To the extent or in the amounts
provided in advance in appropriation Acts, the Commission may
contract with and compensate government and private agencies or
persons to enable the Commission to discharge its duties under
this section, without regard to section 3709 of the Revised
Statutes (41 U.S.C. 5).
(3) Obtaining official data.--
(A) In general.--The Commission is authorized to
secure directly from any executive department, bureau,
agency, board, commission, office, independent
establishment, or instrumentality of the Government,
any information, including suggestions, estimates, or
statistics, for the purposes of this section.
(B) Requesting official data.--The head of such
department, bureau, agency, board, commission, office,
independent establishment, or instrumentality of the
government shall, to the extent authorized by law,
furnish such information upon request made by--
(i) the Chair;
(ii) the Chair of any subcommittee created
by a majority of the Commission; or
(iii) any member of the Commission
designated by a majority of the commission to
request such information.
(4) Assistance from federal agencies.--
(A) General services administration.--The
Administrator of General Services shall provide to the
Commission on a reimbursable basis administrative
support and other services for the performance of the
functions of the Commission.
(B) Other departments and agencies.--In addition to
the assistance prescribed in subparagraph (A), at the
request of the Commission, departments and agencies of
the United States shall provide such services, funds,
facilities, staff, and other support services as may be
authorized by law.
(5) Postal service.--The Commission may use the United
States mails in the same manner and under the same conditions
as other departments and agencies of the United States.
(f) Commission Personnel.--
(1) Appointment and compensation of staff.--
(A) In general.--Subject to rules prescribed by the
Commission, the Chair may appoint and fix the pay of
the executive director and other personnel as the Chair
considers appropriate.
(B) Applicability of civil service laws.--The staff
of the Commission may be appointed without regard to
the provisions of title 5, United States Code,
governing appointments in the competitive service, and
may be paid without regard to the provisions of chapter
51 and subchapter III of chapter 53 of that title
relating to classification and General Schedule pay
rates, except that an individual so appointed may not
receive pay in excess of level V of the Executive
Schedule.
(2) Consultants.--The Commission may procure temporary and
intermittent services under section 3109(b) of title 5, United
States Code, but at rates for individuals not to exceed the
daily equivalent of the rate of pay for a person occupying a
position at level IV of the Executive Schedule.
(3) Staff of federal agencies.--Upon request of the
Commission, the head of any Federal department or agency may
detail, on a reimbursable basis, any of the personnel of such
department or agency to the Commission to assist it in carrying
out its duties under this section.
(g) Termination of Commission.--
(1) In general.--The Commission shall terminate on June 1,
2017.
(2) Administrative activities before termination.--The
Commission may use the period between the submission of its
report and its termination for the purpose of concluding its
activities, including providing testimony to the committee of
Congress concerning its report.
(h) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $1,000,000, which shall remain
available until the date on which the Commission terminates.
SEC. 711. PUBLIC TRANSCRIPTS OF FOMC MEETINGS.
Section 12A of the Federal Reserve Act (12 U.S.C. 263), as amended
by this Act, is further amended by adding at the end the following:
``(e) Public Transcripts of Meetings.--The Committee shall--
``(1) record all meetings of the Committee; and
``(2) make the full transcript of such meetings available
to the public.''.
TITLE VIII--DEMANDING ACCOUNTABILITY FROM WALL STREET
Subtitle A--SEC Penalties Modernization
SEC. 801. ENHANCEMENT OF CIVIL PENALTIES FOR SECURITIES LAWS
VIOLATIONS.
(a) Updated Civil Money Penalties.--
(1) Securities act of 1933.--
(A) Money penalties in administrative actions.--
Section 8A(g)(2) of the Securities Act of 1933 (15
U.S.C. 77h-1(g)(2)) is amended--
(i) in subparagraph (A)--
(I) by striking ``$7,500'' and
inserting ``$10,000''; and
(II) by striking ``$75,000'' and
inserting ``$100,000'';
(ii) in subparagraph (B)--
(I) by striking ``$75,000'' and
inserting ``$100,000''; and
(II) by striking ``$375,000'' and
inserting ``$500,000''; and
(iii) by striking subparagraph (C) and
inserting the following:
``(C) Third tier.--
``(i) In general.--Notwithstanding
subparagraphs (A) and (B), the amount of
penalty for each such act or omission shall not
exceed the amount specified in clause (ii) if--
``(I) the act or omission described
in paragraph (1) involved fraud,
deceit, manipulation, or deliberate or
reckless disregard of a regulatory
requirement; and
``(II) such act or omission
directly or indirectly resulted in--
``(aa) substantial losses
or created a significant risk
of substantial losses to other
persons; or
``(bb) substantial
pecuniary gain to the person
who committed the act or
omission.
``(ii) Maximum amount of penalty.--The
amount referred to in clause (i) is the
greatest of--
``(I) $300,000 for a natural person
or $1,450,000 for any other person;
``(II) 3 times the gross amount of
pecuniary gain to the person who
committed the act or omission; or
``(III) the amount of losses
incurred by victims as a result of the
act or omission.''.
(B) Money penalties in civil actions.--Section
20(d)(2) of the Securities Act of 1933 (15 U.S.C.
77t(d)(2)) is amended--
(i) in subparagraph (A)--
(I) by striking ``$5,000'' and
inserting ``$10,000''; and
(II) by striking ``$50,000'' and
inserting ``$100,000'';
(ii) in subparagraph (B)--
(I) by striking ``$50,000'' and
inserting ``$100,000''; and
(II) by striking ``$250,000'' and
inserting ``$500,000''; and
(iii) by striking subparagraph (C) and
inserting the following:
``(C) Third tier.--
``(i) In general.--Notwithstanding
subparagraphs (A) and (B), the amount of
penalty for each such violation shall not
exceed the amount specified in clause (ii) if--
``(I) the violation described in
paragraph (1) involved fraud, deceit,
manipulation, or deliberate or reckless
disregard of a regulatory requirement;
and
``(II) such violation directly or
indirectly resulted in substantial
losses or created a significant risk of
substantial losses to other persons.
``(ii) Maximum amount of penalty.--The
amount referred to in clause (i) is the
greatest of--
``(I) $300,000 for a natural person
or $1,450,000 for any other person;
``(II) 3 times the gross amount of
pecuniary gain to such defendant as a
result of the violation; or
``(III) the amount of losses
incurred by victims as a result of the
violation.''.
(2) Securities exchange act of 1934.--
(A) Money penalties in civil actions.--Section
21(d)(3)(B) of the Securities Exchange Act of 1934 (15
U.S.C. 78u(d)(3)(B)) is amended--
(i) in clause (i)--
(I) by striking ``$5,000'' and
inserting ``$10,000''; and
(II) by striking ``$50,000'' and
inserting ``$100,000'';
(ii) in clause (ii)--
(I) by striking ``$50,000'' and
inserting ``$100,000''; and
(II) by striking ``$250,000'' and
inserting ``$500,000''; and
(iii) by striking clause (iii) and
inserting the following:
``(iii) Third tier.--
``(I) In general.--Notwithstanding clauses
(i) and (ii), the amount of penalty for each
such violation shall not exceed the amount
specified in subclause (II) if--
``(aa) the violation described in
subparagraph (A) involved fraud,
deceit, manipulation, or deliberate or
reckless disregard of a regulatory
requirement; and
``(bb) such violation directly or
indirectly resulted in substantial
losses or created a significant risk of
substantial losses to other persons.
``(II) Maximum amount of penalty.--The
amount referred to in subclause (I) is the
greatest of--
``(aa) $300,000 for a natural
person or $1,450,000 for any other
person;
``(bb) 3 times the gross amount of
pecuniary gain to such defendant as a
result of the violation; or
``(cc) the amount of losses
incurred by victims as a result of the
violation.''.
(B) Money penalties in administrative actions.--
Section 21B(b) of the Securities Exchange Act of 1934
(15 U.S.C. 78u-2(b)) is amended--
(i) in paragraph (1)--
(I) by striking ``$5,000'' and
inserting ``$10,000''; and
(II) by striking ``$50,000'' and
inserting ``$100,000'';
(ii) in paragraph (2)--
(I) by striking ``$50,000'' and
inserting ``$100,000''; and
(II) by striking ``$250,000'' and
inserting ``$500,000''; and
(iii) by striking paragraph (3) and
inserting the following:
``(3) Third tier.--
``(A) In general.--Notwithstanding paragraphs (1)
and (2), the amount of penalty for each such act or
omission shall not exceed the amount specified in
subparagraph (B) if--
``(i) the act or omission described in
subsection (a) involved fraud, deceit,
manipulation, or deliberate or reckless
disregard of a regulatory requirement; and
``(ii) such act or omission directly or
indirectly resulted in substantial losses or
created a significant risk of substantial
losses to other persons or resulted in
substantial pecuniary gain to the person who
committed the act or omission.
``(B) Maximum amount of penalty.--The amount
referred to in subparagraph (A) is the greatest of--
``(i) $300,000 for a natural person or
$1,450,000 for any other person;
``(ii) 3 times the gross amount of
pecuniary gain to the person who committed the
act or omission; or
``(iii) the amount of losses incurred by
victims as a result of the act or omission.''.
(3) Investment company act of 1940.--
(A) Money penalties in administrative actions.--
Section 9(d)(2) of the Investment Company Act of 1940
(15 U.S.C. 80a-9(d)(2)) is amended--
(i) in subparagraph (A)--
(I) by striking ``$5,000'' and
inserting ``$10,000''; and
(II) by striking ``$50,000'' and
inserting ``$100,000'';
(ii) in subparagraph (B)--
(I) by striking ``$50,000'' and
inserting ``$100,000''; and
(II) by striking ``$250,000'' and
inserting ``$500,000''; and
(iii) by striking subparagraph (C) and
inserting the following:
``(C) Third tier.--
``(i) In general.--Notwithstanding
subparagraphs (A) and (B), the amount of
penalty for each such act or omission shall not
exceed the amount specified in clause (ii) if--
``(I) the act or omission described
in paragraph (1) involved fraud,
deceit, manipulation, or deliberate or
reckless disregard of a regulatory
requirement; and
``(II) such act or omission
directly or indirectly resulted in
substantial losses or created a
significant risk of substantial losses
to other persons or resulted in
substantial pecuniary gain to the
person who committed the act or
omission.
``(ii) Maximum amount of penalty.--The
amount referred to in clause (i) is the
greatest of--
``(I) $300,000 for a natural person
or $1,450,000 for any other person;
``(II) 3 times the gross amount of
pecuniary gain to the person who
committed the act or omission; or
``(III) the amount of losses
incurred by victims as a result of the
act or omission.''.
(B) Money penalties in civil actions.--Section
42(e)(2) of the Investment Company Act of 1940 (15
U.S.C. 80a-41(e)(2)) is amended--
(i) in subparagraph (A)--
(I) by striking ``$5,000'' and
inserting ``$10,000''; and
(II) by striking ``$50,000'' and
inserting ``$100,000'';
(ii) in subparagraph (B)--
(I) by striking ``$50,000'' and
inserting ``$100,000''; and
(II) by striking ``$250,000'' and
inserting ``$500,000''; and
(iii) by striking subparagraph (C) and
inserting the following:
``(C) Third tier.--
``(i) In general.--Notwithstanding
subparagraphs (A) and (B), the amount of
penalty for each such violation shall not
exceed the amount specified in clause (ii) if--
``(I) the violation described in
paragraph (1) involved fraud, deceit,
manipulation, or deliberate or reckless
disregard of a regulatory requirement;
and
``(II) such violation directly or
indirectly resulted in substantial
losses or created a significant risk of
substantial losses to other persons.
``(ii) Maximum amount of penalty.--The
amount referred to in clause (i) is the
greatest of--
``(I) $300,000 for a natural person
or $1,450,000 for any other person;
``(II) 3 times the gross amount of
pecuniary gain to such defendant as a
result of the violation; or
``(III) the amount of losses
incurred by victims as a result of the
violation.''.
(4) Investment advisers act of 1940.--
(A) Money penalties in administrative actions.--
Section 203(i)(2) of the Investment Advisers Act of
1940 (15 U.S.C. 80b-3(i)(2)) is amended--
(i) in subparagraph (A)--
(I) by striking ``$5,000'' and
inserting ``$10,000''; and
(II) by striking ``$50,000'' and
inserting ``$100,000'';
(ii) in subparagraph (B)--
(I) by striking ``$50,000'' and
inserting ``$100,000''; and
(II) by striking ``$250,000'' and
inserting ``$500,000''; and
(iii) by striking subparagraph (C) and
inserting the following:
``(C) Third tier.--
``(i) In general.--Notwithstanding
subparagraphs (A) and (B), the amount of
penalty for each such act or omission shall not
exceed the amount specified in clause (ii) if--
``(I) the act or omission described
in paragraph (1) involved fraud,
deceit, manipulation, or deliberate or
reckless disregard of a regulatory
requirement; and
``(II) such act or omission
directly or indirectly resulted in
substantial losses or created a
significant risk of substantial losses
to other persons or resulted in
substantial pecuniary gain to the
person who committed the act or
omission.
``(ii) Maximum amount of penalty.--The
amount referred to in clause (i) is the
greatest of--
``(I) $300,000 for a natural person
or $1,450,000 for any other person;
``(II) 3 times the gross amount of
pecuniary gain to the person who
committed the act or omission; or
``(III) the amount of losses
incurred by victims as a result of the
act or omission.''.
(B) Money penalties in civil actions.--Section
209(e)(2) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-9(e)(2)) is amended--
(i) in subparagraph (A)--
(I) by striking ``$5,000'' and
inserting ``$10,000''; and
(II) by striking ``$50,000'' and
inserting ``$100,000'';
(ii) in subparagraph (B)--
(I) by striking ``$50,000'' and
inserting ``$100,000''; and
(II) by striking ``$250,000'' and
inserting ``$500,000''; and
(iii) by striking subparagraph (C) and
inserting the following:
``(C) Third tier.--
``(i) In general.--Notwithstanding
subparagraphs (A) and (B), the amount of
penalty for each such violation shall not
exceed the amount specified in clause (ii) if--
``(I) the violation described in
paragraph (1) involved fraud, deceit,
manipulation, or deliberate or reckless
disregard of a regulatory requirement;
and
``(II) such violation directly or
indirectly resulted in substantial
losses or created a significant risk of
substantial losses to other persons.
``(ii) Maximum amount of penalty.--The
amount referred to in clause (i) is the
greatest of--
``(I) $300,000 for a natural person
or $1,450,000 for any other person;
``(II) 3 times the gross amount of
pecuniary gain to such defendant as a
result of the violation; or
``(III) the amount of losses
incurred by victims as a result of the
violation.''.
(b) Penalties for Recidivists.--
(1) Securities act of 1933.--
(A) Money penalties in administrative actions.--
Section 8A(g)(2) of the Securities Act of 1933 (15
U.S.C. 77h-1(g)(2)) is amended by adding at the end the
following:
``(D) Fourth tier.--Notwithstanding subparagraphs
(A), (B), and (C), the maximum amount of penalty for
each such act or omission shall be 3 times the
otherwise applicable amount in such subparagraphs if,
within the 5-year period preceding such act or
omission, the person who committed the act or omission
was criminally convicted for securities fraud or became
subject to a judgment or order imposing monetary,
equitable, or administrative relief in any Commission
action alleging fraud by that person.''.
(B) Money penalties in civil actions.--Section
20(d)(2) of the Securities Act of 1933 (15 U.S.C.
77t(d)(2)) is amended by adding at the end the
following:
``(D) Fourth tier.--Notwithstanding subparagraphs
(A), (B), and (C), the maximum amount of penalty for
each such violation shall be 3 times the otherwise
applicable amount in such subparagraphs if, within the
5-year period preceding such violation, the defendant
was criminally convicted for securities fraud or became
subject to a judgment or order imposing monetary,
equitable, or administrative relief in any Commission
action alleging fraud by that defendant.''.
(2) Securities exchange act of 1934.--
(A) Money penalties in civil actions.--Section
21(d)(3)(B) of the Securities Exchange Act of 1934 (15
U.S.C. 78u(d)(3)(B)) is amended by adding at the end
the following:
``(iv) Fourth tier.--Notwithstanding
clauses (i), (ii), and (iii), the maximum
amount of penalty for each such violation shall
be 3 times the otherwise applicable amount in
such clauses if, within the 5-year period
preceding such violation, the defendant was
criminally convicted for securities fraud or
became subject to a judgment or order imposing
monetary, equitable, or administrative relief
in any Commission action alleging fraud by that
defendant.''.
(B) Money penalties in administrative actions.--
Section 21B(b) of the Securities Exchange Act of 1934
(15 U.S.C. 78u-2(b)) is amended by adding at the end
the following:
``(4) Fourth tier.--Notwithstanding paragraphs (1), (2),
and (3), the maximum amount of penalty for each such act or
omission shall be 3 times the otherwise applicable amount in
such paragraphs if, within the 5-year period preceding such act
or omission, the person who committed the act or omission was
criminally convicted for securities fraud or became subject to
a judgment or order imposing monetary, equitable, or
administrative relief in any Commission action alleging fraud
by that person.''.
(3) Investment company act of 1940.--
(A) Money penalties in administrative actions.--
Section 9(d)(2) of the Investment Company Act of 1940
(15 U.S.C. 80a-9(d)(2)) is amended by adding at the end
the following:
``(D) Fourth tier.--Notwithstanding subparagraphs
(A), (B), and (C), the maximum amount of penalty for
each such act or omission shall be 3 times the
otherwise applicable amount in such subparagraphs if,
within the 5-year period preceding such act or
omission, the person who committed the act or omission
was criminally convicted for securities fraud or became
subject to a judgment or order imposing monetary,
equitable, or administrative relief in any Commission
action alleging fraud by that person.''.
(B) Money penalties in civil actions.--Section
42(e)(2) of the Investment Company Act of 1940 (15
U.S.C. 80a-41(e)(2)) is amended by adding at the end
the following:
``(D) Fourth tier.--Notwithstanding subparagraphs
(A), (B), and (C), the maximum amount of penalty for
each such violation shall be 3 times the otherwise
applicable amount in such subparagraphs if, within the
5-year period preceding such violation, the defendant
was criminally convicted for securities fraud or became
subject to a judgment or order imposing monetary,
equitable, or administrative relief in any Commission
action alleging fraud by that defendant.''.
(4) Investment advisers act of 1940.--
(A) Money penalties in administrative actions.--
Section 203(i)(2) of the Investment Advisers Act of
1940 (15 U.S.C. 80b-3(i)(2)) is amended by adding at
the end the following:
``(D) Fourth tier.--Notwithstanding subparagraphs
(A), (B), and (C), the maximum amount of penalty for
each such act or omission shall be 3 times the
otherwise applicable amount in such subparagraphs if,
within the 5-year period preceding such act or
omission, the person who committed the act or omission
was criminally convicted for securities fraud or became
subject to a judgment or order imposing monetary,
equitable, or administrative relief in any Commission
action alleging fraud by that person.''.
(B) Money penalties in civil actions.--Section
209(e)(2) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-9(e)(2)) is amended by adding at the end the
following:
``(D) Fourth tier.--Notwithstanding subparagraphs
(A), (B), and (C), the maximum amount of penalty for
each such violation shall be 3 times the otherwise
applicable amount in such subparagraphs if, within the
5-year period preceding such violation, the defendant
was criminally convicted for securities fraud or became
subject to a judgment or order imposing monetary,
equitable, or administrative relief in any Commission
action alleging fraud by that defendant.''.
(c) Violations of Injunctions and Bars.--
(1) Securities act of 1933.--Section 20(d) of the
Securities Act of 1933 (15 U.S.C. 77t(d)) is amended--
(A) in paragraph (1), by inserting after ``the
rules or regulations thereunder,'' the following: ``a
Federal court injunction or a bar obtained or entered
by the Commission under this title,''; and
(B) by striking paragraph (4) and inserting the
following:
``(4) Special provisions relating to a violation of an
injunction or certain orders.--
``(A) In general.--Each separate violation of an
injunction or order described in subparagraph (B) shall
be a separate offense, except that in the case of a
violation through a continuing failure to comply with
such injunction or order, each day of the failure to
comply with the injunction or order shall be deemed a
separate offense.
``(B) Injunctions and orders.--Subparagraph (A)
shall apply with respect to any action to enforce--
``(i) a Federal court injunction obtained
pursuant to this title;
``(ii) an order entered or obtained by the
Commission pursuant to this title that bars,
suspends, places limitations on the activities
or functions of, or prohibits the activities
of, a person; or
``(iii) a cease-and-desist order entered by
the Commission pursuant to section 8A.''.
(2) Securities exchange act of 1934.--Section 21(d)(3) of
the Securities Exchange Act of 1934 (15 U.S.C. 78u(d)(3)) is
amended--
(A) in subparagraph (A), by inserting after ``the
rules or regulations thereunder,'' the following: ``a
Federal court injunction or a bar obtained or entered
by the Commission under this title,''; and
(B) by striking subparagraph (D) and inserting the
following:
``(D) Special provisions relating to a violation of an
injunction or certain orders.--
``(i) In general.--Each separate violation of an
injunction or order described in clause (ii) shall be a
separate offense, except that in the case of a
violation through a continuing failure to comply with
such injunction or order, each day of the failure to
comply with the injunction or order shall be deemed a
separate offense.
``(ii) Injunctions and orders.--Clause (i) shall
apply with respect to an action to enforce--
``(I) a Federal court injunction obtained
pursuant to this title;
``(II) an order entered or obtained by the
Commission pursuant to this title that bars,
suspends, places limitations on the activities
or functions of, or prohibits the activities
of, a person; or
``(III) a cease-and-desist order entered by
the Commission pursuant to section 21C.''.
(3) Investment company act of 1940.--Section 42(e) of the
Investment Company Act of 1940 (15 U.S.C. 80a-41(e)) is
amended--
(A) in paragraph (1), by inserting after ``the
rules or regulations thereunder,'' the following: ``a
Federal court injunction or a bar obtained or entered
by the Commission under this title,''; and
(B) by striking paragraph (4) and inserting the
following:
``(4) Special provisions relating to a violation of an
injunction or certain orders.--
``(A) In general.--Each separate violation of an
injunction or order described in subparagraph (B) shall
be a separate offense, except that in the case of a
violation through a continuing failure to comply with
such injunction or order, each day of the failure to
comply with the injunction or order shall be deemed a
separate offense.
``(B) Injunctions and orders.--Subparagraph (A)
shall apply with respect to any action to enforce--
``(i) a Federal court injunction obtained
pursuant to this title;
``(ii) an order entered or obtained by the
Commission pursuant to this title that bars,
suspends, places limitations on the activities
or functions of, or prohibits the activities
of, a person; or
``(iii) a cease-and-desist order entered by
the Commission pursuant to section 9(f).''.
(4) Investment advisers act of 1940.--Section 209(e) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-9(e)) is
amended--
(A) in paragraph (1), by inserting after ``the
rules or regulations thereunder,'' the following: ``a
Federal court injunction or a bar obtained or entered
by the Commission under this title,''; and
(B) by striking paragraph (4) and inserting the
following:
``(4) Special provisions relating to a violation of an
injunction or certain orders.--
``(A) In general.--Each separate violation of an
injunction or order described in subparagraph (B) shall
be a separate offense, except that in the case of a
violation through a continuing failure to comply with
such injunction or order, each day of the failure to
comply with the injunction or order shall be deemed a
separate offense.
``(B) Injunctions and orders.--Subparagraph (A)
shall apply with respect to any action to enforce--
``(i) a Federal court injunction obtained
pursuant to this title;
``(ii) an order entered or obtained by the
Commission pursuant to this title that bars,
suspends, places limitations on the activities
or functions of, or prohibits the activities
of, a person; or
``(iii) a cease-and-desist order entered by
the Commission pursuant to section 203(k).''.
(d) Effective Date.--The amendments made by this section shall
apply with respect to conduct that occurs after the date of the
enactment of this Act.
SEC. 802. UPDATED CIVIL MONEY PENALTIES OF PUBLIC COMPANY ACCOUNTING
OVERSIGHT BOARD.
(a) In General.--Section 105(c)(4)(D) of the Sarbanes-Oxley Act of
2002 (15 U.S.C. 7215(c)(4)(D)) is amended--
(1) in clause (i)--
(A) by striking ``$100,000'' and inserting
``$200,000''; and
(B) by striking ``$2,000,000'' and inserting
``$4,000,000''; and
(2) in clause (ii)--
(A) by striking ``$750,000'' and inserting
``$1,000,000''; and
(B) by striking ``$15,000,000'' and inserting
``$20,000,000''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to conduct that occurs after the date of the
enactment of this Act.
SEC. 803. UPDATED CIVIL MONEY PENALTY FOR CONTROLLING PERSONS IN
CONNECTION WITH INSIDER TRADING.
(a) In General.--Section 21A(a)(3) of the Securities Exchange Act
of 1934 (15 U.S.C. 78u-1(a)(3)) is amended by striking ``$1,000,000''
and inserting ``$2,000,000''.
(b) Effective Date.--The amendment made by this section shall apply
with respect to conduct that occurs after the date of the enactment of
this Act.
SEC. 804. UPDATE OF CERTAIN OTHER PENALTIES.
(a) In General.--Section 32 of the Securities Exchange Act of 1934
(15 U.S.C. 78ff) is amended--
(1) in subsection (a), by striking ``$5,000,000'' and
inserting ``$7,000,000''; and
(2) in subsection (c)--
(A) in paragraph (1)--
(i) in subparagraph (A), by striking
``$2,000,000'' and inserting ``$4,000,000'';
and
(ii) in subparagraph (B), by striking
``$10,000'' and inserting ``$50,000''; and
(B) in paragraph (2)--
(i) in subparagraph (A), by striking
``$100,000'' and inserting ``$250,000''; and
(ii) in subparagraph (B), by striking
``$10,000'' and inserting ``$50,000''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to conduct that occurs after the date of the
enactment of this Act.
SEC. 805. MONETARY SANCTIONS TO BE USED FOR THE RELIEF OF VICTIMS.
(a) In General.--Section 308(a) of the Sarbanes-Oxley Act of 2002
(15 U.S.C. 7246(a)) is amended to read as follows:
``(a) Monetary Sanctions to Be Used for the Relief of Victims.--If,
in any judicial or administrative action brought by the Commission
under the securities laws, the Commission obtains a monetary sanction
(as defined in section 21F(a) of the Securities Exchange Act of 1934)
against any person for a violation of such laws, or such person agrees,
in settlement of any such action, to such monetary sanction, the amount
of such monetary sanction shall, on the motion or at the direction of
the Commission, be added to and become part of a disgorgement fund or
other fund established for the benefit of the victims of such
violation.''.
(b) Monetary Sanction Defined.--Section 21F(a)(4)(A) of the
Securities Exchange Act of 1934 (15 U.S.C. 78u-6(a)(4)(A)) is amended
by striking ``ordered'' and inserting ``required''.
(c) Effective Date.--The amendments made by this section apply with
respect to any monetary sanction ordered or required to be paid before
or after the date of enactment of this Act.
SEC. 806. GAO REPORT ON USE OF CIVIL MONEY PENALTY AUTHORITY BY
COMMISSION.
(a) In General.--Not later than 2 years after the date of the
enactment of this Act, the Comptroller General of the United States
shall submit to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban
Affairs of the Senate a report on the use by the Commission of the
authority to impose or obtain civil money penalties for violations of
the securities laws during the period beginning on June 1, 2010, and
ending on the date of the enactment of this Act.
(b) Matters Required to Be Included.--The matters covered by the
report required by subsection (a) shall include the following:
(1) The types of violations for which civil money penalties
were imposed or obtained.
(2) The types of persons on whom civil money penalties were
imposed or from whom such penalties were obtained.
(3) The number and dollar amount of civil money penalties
imposed or obtained, disaggregated as follows:
(A) Penalties imposed in administrative actions and
penalties obtained in judicial actions.
(B) Penalties imposed on or obtained from issuers
(individual and aggregate filers) and penalties imposed
on or obtained from other persons.
(C) Penalties permitted to be retained for use by
the Commission and penalties deposited in the general
fund of the Treasury of the United States.
(4) For penalties imposed on or obtained from issuers:
(A) Whether the violations involved resulted in
direct economic benefit to the issuers.
(B) The impact of the penalties on the shareholders
of the issuers.
(c) Definitions.--In this section, the terms ``Commission'',
``issuer'', and ``securities laws'' have the meanings given such terms
in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)).
Subtitle B--FIRREA Penalties Modernization
SEC. 811. INCREASE OF CIVIL AND CRIMINAL PENALTIES ORIGINALLY
ESTABLISHED IN THE FINANCIAL INSTITUTIONS REFORM,
RECOVERY, AND ENFORCEMENT ACT OF 1989.
(a) Amendments to FIRREA.--Section 951(b) of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
1833a(b)) is amended--
(1) in paragraph (1), by striking ``$1,000,000'' and
inserting ``$1,500,000''; and
(2) in paragraph (2), by striking ``$1,000,000 per day or
$5,000,000'' and inserting ``$1,500,000 per day or
$7,500,000''.
(b) Amendments to the Home Owners' Loan Act.--The Home Owners' Loan
Act (12 U.S.C. 1461 et seq.) is amended--
(1) in section 5(v)(6), by striking ``$1,000,000'' and
inserting ``$1,500,000''; and
(2) in section 10--
(A) in subsection (r)(3), by striking
``$1,000,000'' and inserting ``$1,500,000''; and
(B) in subsection (i)(1)(B), by striking
``$1,000,000'' and inserting ``$1,500,000''.
(c) Amendments to the Federal Deposit Insurance Act.--The Federal
Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended--
(1) in section 7--
(A) in subsection (a)(1), by striking
``$1,000,000'' and inserting ``$1,500,000''; and
(B) in subsection (j)(16)(D), by striking
``$1,000,000'' each place such term appears and
inserting ``$1,500,000'';
(2) in section 8--
(A) in subsection (i)(2)(D), by striking
``$1,000,000'' each place such term appears and
inserting ``$1,500,000''; and
(B) in subsection (j), by striking ``$1,000,000''
and inserting ``$1,500,000''; and
(3) in section 19(b), by striking ``$1,000,000'' and
inserting ``$1,500,000''.
(d) Amendments to the Federal Credit Union Act.--The Federal Credit
Union Act (12 U.S.C. 1751 et seq.) is amended--
(1) in section 202(a)(3), by striking ``$1,000,000'' and
inserting ``$1,500,000'';
(2) in section 205(d)(3), by striking ``$1,000,000'' and
inserting ``$1,500,000''; and
(3) in section 206--
(A) in subsection (k)(2)(D), by striking
``$1,000,000'' each place such term appears and
inserting ``$1,500,000''; and
(B) in subsection (l), by striking ``$1,000,000''
and inserting ``$1,500,000''.
(e) Amendments to the Revised Statutes of the United States.--Title
LXII of the Revised Statutes of the United States is amended--
(1) in section 5213(c), by striking ``$1,000,000'' and
inserting ``$1,500,000''; and
(2) in section 5239(b)(4), by striking ``$1,000,000'' each
place such term appears and inserting ``$1,500,000''.
(f) Amendments to the Federal Reserve Act.--The Federal Reserve Act
(12 U.S.C. 221 et seq.) is amended--
(1) in the 6th undesignated paragraph of section 9, by
striking ``$1,000,000'' and inserting ``$1,500,000'';
(2) in section 19(l)(4), by striking ``$1,000,000'' each
place such term appears and inserting ``$1,500,000''; and
(3) in section 29(d), by striking ``$1,000,000'' each place
such term appears and inserting ``$1,500,000''.
(g) Amendments to the Bank Holding Company Act Amendments of
1970.--Section 106(b)(2)(F)(iv) of the Bank Holding Company Act
Amendments of 1970 (12 U.S.C. 1978(b)(2)(F)(iv)) is amended by striking
``$1,000,000'' each place such term appears and inserting
``$1,500,000''.
(h) Amendments to the Bank Holding Company Act of 1956.--Section 8
of the Bank Holding Company Act of 1956 (12 U.S.C. 1847) is amended--
(1) in subsection (a)(2), by striking ``$1,000,000'' and
inserting ``$1,500,000''; and
(2) in subsection (d)(3), by striking ``$1,000,000'' and
inserting ``$1,500,000''.
(i) Amendments to Title 18, United States Code.--Title 18, United
States Code, is amended--
(1) in section 215(a) of chapter 11, by striking
``$1,000,000'' and inserting ``$1,500,000'';
(2) in chapter 31--
(A) in section 656, by striking ``$1,000,000'' and
inserting ``$1,500,000''; and
(B) in section 657, by striking ``$1,000,000'' and
inserting ``$1,500,000'';
(3) in chapter 47--
(A) in section 1005, by striking ``$1,000,000'' and
inserting ``$1,500,000'';
(B) in section 1006, by striking ``$1,000,000'' and
inserting ``$1,500,000'';
(C) in section 1007, by striking ``$1,000,000'' and
inserting ``$1,500,000''; and
(D) in section 1014, by striking ``$1,000,000'' and
inserting ``$1,500,000''; and
(4) in chapter 63--
(A) in section 1341, by striking ``$1,000,000'' and
inserting ``$1,500,000'';
(B) in section 1343, by striking ``$1,000,000'' and
inserting ``$1,500,000''; and
(C) in section 1344, by striking ``$1,000,000'' and
inserting ``$1,500,000''.
TITLE IX--REPEAL OF THE VOLCKER RULE AND OTHER PROVISIONS
SEC. 901. REPEALS.
(a) In General.--The following sections of title VI of the Dodd-
Frank Wall Street Reform and Consumer Protection Act are repealed, and
the provisions of law amended or repealed by such sections are restored
or revived as if such sections had not been enacted:
(1) Section 603.
(2) Section 618.
(3) Section 619.
(4) Section 620.
(5) Section 621.
(b) Clerical Amendment.--The table of contents under section 1(b)
of the Dodd-Frank Wall Street Reform and Consumer Protection Act is
amended by striking the items relating to sections 603, 618, 619, 620,
and 621.
TITLE X--UNLEASHING OPPORTUNITIES FOR SMALL BUSINESSES, INNOVATORS, AND
JOB CREATORS BY FACILITATING CAPITAL FORMATION
Subtitle A--Small Business Mergers, Acquisitions, Sales, and Brokerage
Simplification
SEC. 1001. REGISTRATION EXEMPTION FOR MERGER AND ACQUISITION BROKERS.
Section 15(b) of the Securities Exchange Act of 1934 (15 U.S.C.
78o(b)) is amended by adding at the end the following:
``(13) Registration exemption for merger and acquisition
brokers.--
``(A) In general.--Except as provided in
subparagraph (B), an M&A broker shall be exempt from
registration under this section.
``(B) Excluded activities.--An M&A broker is not
exempt from registration under this paragraph if such
broker does any of the following:
``(i) Directly or indirectly, in connection
with the transfer of ownership of an eligible
privately held company, receives, holds,
transmits, or has custody of the funds or
securities to be exchanged by the parties to
the transaction.
``(ii) Engages on behalf of an issuer in a
public offering of any class of securities that
is registered, or is required to be registered,
with the Commission under section 12 or with
respect to which the issuer files, or is
required to file, periodic information,
documents, and reports under subsection (d).
``(iii) Engages on behalf of any party in a
transaction involving a public shell company.
``(C) Disqualifications.--An M&A broker is not
exempt from registration under this paragraph if such
broker is subject to--
``(i) suspension or revocation of
registration under paragraph (4);
``(ii) a statutory disqualification
described in section 3(a)(39);
``(iii) a disqualification under the rules
adopted by the Commission under section 926 of
the Investor Protection and Securities Reform
Act of 2010 (15 U.S.C. 77d note); or
``(iv) a final order described in paragraph
(4)(H).
``(D) Rule of construction.--Nothing in this
paragraph shall be construed to limit any other
authority of the Commission to exempt any person, or
any class of persons, from any provision of this title,
or from any provision of any rule or regulation
thereunder.
``(E) Definitions.--In this paragraph:
``(i) Control.--The term `control' means
the power, directly or indirectly, to direct
the management or policies of a company,
whether through ownership of securities, by
contract, or otherwise. There is a presumption
of control for any person who--
``(I) is a director, general
partner, member or manager of a limited
liability company, or officer
exercising executive responsibility (or
has similar status or functions);
``(II) has the right to vote 20
percent or more of a class of voting
securities or the power to sell or
direct the sale of 20 percent or more
of a class of voting securities; or
``(III) in the case of a
partnership or limited liability
company, has the right to receive upon
dissolution, or has contributed, 20
percent or more of the capital.
``(ii) Eligible privately held company.--
The term `eligible privately held company'
means a privately held company that meets both
of the following conditions:
``(I) The company does not have any
class of securities registered, or
required to be registered, with the
Commission under section 12 or with
respect to which the company files, or
is required to file, periodic
information, documents, and reports
under subsection (d).
``(II) In the fiscal year ending
immediately before the fiscal year in
which the services of the M&A broker
are initially engaged with respect to
the securities transaction, the company
meets either or both of the following
conditions (determined in accordance
with the historical financial
accounting records of the company):
``(aa) The earnings of the
company before interest, taxes,
depreciation, and amortization
are less than $25,000,000.
``(bb) The gross revenues
of the company are less than
$250,000,000.
``(iii) M&A broker.--The term `M&A broker'
means a broker, and any person associated with
a broker, engaged in the business of effecting
securities transactions solely in connection
with the transfer of ownership of an eligible
privately held company, regardless of whether
the broker acts on behalf of a seller or buyer,
through the purchase, sale, exchange, issuance,
repurchase, or redemption of, or a business
combination involving, securities or assets of
the eligible privately held company, if the
broker reasonably believes that--
``(I) upon consummation of the
transaction, any person acquiring
securities or assets of the eligible
privately held company, acting alone or
in concert, will control and, directly
or indirectly, will be active in the
management of the eligible privately
held company or the business conducted
with the assets of the eligible
privately held company; and
``(II) if any person is offered
securities in exchange for securities
or assets of the eligible privately
held company, such person will, prior
to becoming legally bound to consummate
the transaction, receive or have
reasonable access to the most recent
fiscal year-end financial statements of
the issuer of the securities as
customarily prepared by the management
of the issuer in the normal course of
operations and, if the financial
statements of the issuer are audited,
reviewed, or compiled, any related
statement by the independent
accountant, a balance sheet dated not
more than 120 days before the date of
the offer, and information pertaining
to the management, business, results of
operations for the period covered by
the foregoing financial statements, and
material loss contingencies of the
issuer.
``(iv) Public shell company.--The term
`public shell company' is a company that at the
time of a transaction with an eligible
privately held company--
``(I) has any class of securities
registered, or required to be
registered, with the Commission under
section 12 or that is required to file
reports pursuant to subsection (d);
``(II) has no or nominal
operations; and
``(III) has--
``(aa) no or nominal
assets;
``(bb) assets consisting
solely of cash and cash
equivalents; or
``(cc) assets consisting of
any amount of cash and cash
equivalents and nominal other
assets.
``(F) Inflation adjustment.--
``(i) In general.--On the date that is 5
years after the date of the enactment of this
paragraph, and every 5 years thereafter, each
dollar amount in subparagraph (E)(ii)(II) shall
be adjusted by--
``(I) dividing the annual value of
the Employment Cost Index For Wages and
Salaries, Private Industry Workers (or
any successor index), as published by
the Bureau of Labor Statistics, for the
calendar year preceding the calendar
year in which the adjustment is being
made by the annual value of such index
(or successor) for the calendar year
ending December 31, 2012; and
``(II) multiplying such dollar
amount by the quotient obtained under
subclause (I).
``(ii) Rounding.--Each dollar amount
determined under clause (i) shall be rounded to
the nearest multiple of $100,000.''.
SEC. 1002. EFFECTIVE DATE.
This subtitle and any amendment made by this subtitle shall take
effect on the date that is 90 days after the date of the enactment of
this Act.
Subtitle B--Encouraging Employee Ownership
SEC. 1006. INCREASED THRESHOLD FOR DISCLOSURES RELATING TO COMPENSATORY
BENEFIT PLANS.
Not later than 60 days after the date of the enactment of this Act,
the Securities and Exchange Commission shall revise section 230.701(e)
of title 17, Code of Federal Regulations, so as to increase from
$5,000,000 to $10,000,000 the aggregate sales price or amount of
securities sold during any consecutive 12-month period in excess of
which the issuer is required under such section to deliver an
additional disclosure to investors. The Commission shall index for
inflation such aggregate sales price or amount every 5 years to reflect
the change in the Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics, rounding to the nearest
$1,000,000.
Subtitle C--Small Company Disclosure Simplification
SEC. 1011. EXEMPTION FROM XBRL REQUIREMENTS FOR EMERGING GROWTH
COMPANIES AND OTHER SMALLER COMPANIES.
(a) Exemption for Emerging Growth Companies.--Emerging growth
companies are exempted from the requirements to use Extensible Business
Reporting Language (XBRL) for financial statements and other periodic
reporting required to be filed with the Commission under the securities
laws. Such companies may elect to use XBRL for such reporting.
(b) Exemption for Other Smaller Companies.--Issuers with total
annual gross revenues of less than $250,000,000 are exempt from the
requirements to use XBRL for financial statements and other periodic
reporting required to be filed with the Commission under the securities
laws. Such issuers may elect to use XBRL for such reporting. An
exemption under this subsection shall continue in effect until--
(1) the date that is five years after the date of enactment
of this Act; or
(2) the date that is two years after a determination by the
Commission, by order after conducting the analysis required by
section 3, that the benefits of such requirements to such
issuers outweigh the costs, but no earlier than three years
after enactment of this Act.
(c) Modifications to Regulations.--Not later than 60 days after the
date of enactment of this Act, the Commission shall revise its
regulations under parts 229, 230, 232, 239, 240, and 249 of title 17,
Code of Federal Regulations, to reflect the exemptions set forth in
subsections (a) and (b).
SEC. 1012. ANALYSIS BY THE SEC.
The Commission shall conduct an analysis of the costs and benefits
to issuers described in section 1011(b) of the requirements to use XBRL
for financial statements and other periodic reporting required to be
filed with the Commission under the securities laws. Such analysis
shall include an assessment of--
(1) how such costs and benefits may differ from the costs
and benefits identified by the Commission in the order relating
to interactive data to improve financial reporting (dated
January 30, 2009; 74 Fed. Reg. 6776) because of the size of
such issuers;
(2) the effects on efficiency, competition, capital
formation, and financing and on analyst coverage of such
issuers (including any such effects resulting from use of XBRL
by investors);
(3) the costs to such issuers of--
(A) submitting data to the Commission in XBRL;
(B) posting data on the website of the issuer in
XBRL;
(C) software necessary to prepare, submit, or post
data in XBRL; and
(D) any additional consulting services or filing
agent services;
(4) the benefits to the Commission in terms of improved
ability to monitor securities markets, assess the potential
outcomes of regulatory alternatives, and enhance investor
participation in corporate governance and promote capital
formation; and
(5) the effectiveness of standards in the United States for
interactive filing data relative to the standards of
international counterparts.
SEC. 1013. REPORT TO CONGRESS.
Not later than one year after the date of enactment of this Act,
the Commission shall provide the Committee on Financial Services of the
House of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate a report regarding--
(1) the progress in implementing XBRL reporting within the
Commission;
(2) the use of XBRL data by Commission officials;
(3) the use of XBRL data by investors;
(4) the results of the analysis required by section 1012;
and
(5) any additional information the Commission considers
relevant for increasing transparency, decreasing costs, and
increasing efficiency of regulatory filings with the
Commission.
SEC. 1014. DEFINITIONS.
As used in this subtitle, the terms ``Commission'', ``emerging
growth company'', ``issuer'', and ``securities laws'' have the meanings
given such terms in section 3 of the Securities Exchange Act of 1934
(15 U.S.C. 78c).
Subtitle D--Securities and Exchange Commission Overpayment Credit
SEC. 1016. REFUNDING OR CREDITING OVERPAYMENT OF SECTION 31 FEES.
(a) In General.--Section 31 of the Securities Exchange Act of 1934
(15 U.S.C. 78ee) is amended by adding at the end the following:
``(n) Overpayment.--If a national securities exchange or national
securities association pays to the Commission an amount in excess of
fees and assessments due under this section and informs the Commission
of such amount paid in excess within 10 years of the date of the
payment, the Commission shall offset future fees and assessments due by
such exchange or association in an amount equal to such excess
amount.''.
(b) Applicability.--The amendment made by this section shall apply
to any fees and assessments paid before, on, or after the date of
enactment of this section.
Subtitle E--Fair Access to Investment Research
SEC. 1021. SAFE HARBOR FOR INVESTMENT FUND RESEARCH.
(a) Expansion of the Safe Harbor.--Not later than the end of the
45-day period beginning on the date of enactment of this Act, the
Securities and Exchange Commission shall propose, and not later than
the end of the 180-day period beginning on such date, the Commission
shall adopt, upon such terms, conditions, or requirements as the
Commission may determine necessary or appropriate in the public
interest, for the protection of investors, and for the promotion of
capital formation, revisions to section 230.139 of title 17, Code of
Federal Regulations, to provide that a covered investment fund research
report that is published or distributed by a broker or dealer--
(1) shall be deemed, for purposes of sections 2(a)(10) and
5(c) of the Securities Act of 1933 (15 U.S.C. 77b(a)(10),
77e(c)), not to constitute an offer for sale or an offer to
sell a security that is the subject of an offering pursuant to
a registration statement that is effective, even if the broker
or dealer is participating or will participate in the
registered offering of the covered investment fund's
securities; and
(2) shall be deemed to satisfy the conditions of subsection
(a)(1) or (a)(2) of section 230.139 of title 17, Code of
Federal Regulations, or any successor provisions, for purposes
of the Commission's rules and regulations under the Federal
securities laws and the rules of any self-regulatory
organization.
(b) Implementation of Safe Harbor.--In implementing the safe harbor
pursuant to subsection (a), the Commission shall--
(1) not, in the case of a covered investment fund with a
class of securities in substantially continuous distribution,
condition the safe harbor on whether the broker's or dealer's
publication or distribution of a covered investment fund
research report constitutes such broker's or dealer's
initiation or reinitiation of research coverage on such covered
investment fund or its securities;
(2) not--
(A) require the covered investment fund to have
been registered as an investment company under the
Investment Company Act of 1940 (15 U.S.C. 80a-1 et
seq.) or subject to the reporting requirements of
section 13 or 15(d) of the Securities Exchange Act of
1934 (15 U.S.C. 78m, 78o(d)) for any period exceeding
the period of time referenced under paragraph
(a)(1)(i)(A)(1) of section 230.139 of title 17, Code of
Federal Regulations; or
(B) impose a minimum float provision exceeding that
referenced in paragraph (a)(1)(i)(A)(1)(i) of section
230.139 of title 17, Code of Federal Regulations;
(3) provide that a self-regulatory organization may not
maintain or enforce any rule that would--
(A) prohibit the ability of a member to publish or
distribute a covered investment fund research report
solely because the member is also participating in a
registered offering or other distribution of any
securities of such covered investment fund; or
(B) prohibit the ability of a member to participate
in a registered offering or other distribution of
securities of a covered investment fund solely because
the member has published or distributed a covered
investment fund research report about such covered
investment fund or its securities; and
(4) provide that a covered investment fund research report
shall not be subject to section 24(b) of the Investment Company
Act of 1940 (15 U.S.C. 80a-24(b)) or the rules and regulations
thereunder, except that such report may still be subject to
such section and the rules and regulations thereunder to the
extent that it is otherwise not subject to the content
standards in the rules of any self-regulatory organization
related to research reports, including those contained in the
rules governing communications with the public regarding
investment companies or substantially similar standards.
(c) Rules of Construction.--Nothing in this Act shall be construed
as in any way limiting--
(1) the applicability of the antifraud or antimanipulation
provisions of the Federal securities laws and rules adopted
thereunder to a covered investment fund research report,
including section 17 of the Securities Act of 1933 (15 U.S.C.
77q), section 34(b) of the Investment Company Act of 1940 (15
U.S.C. 80a-33), and sections 9 and 10 of the Securities
Exchange Act of 1934 (15 U.S.C. 78i, 78j); or
(2) the authority of any self-regulatory organization to
examine or supervise a member's practices in connection with
such member's publication or distribution of a covered
investment fund research report for compliance with applicable
provisions of the Federal securities laws or self-regulatory
organization rules related to research reports, including those
contained in rules governing communications with the public.
(d) Interim Effectiveness of Safe Harbor.--
(1) In general.--From and after the 180-day period
beginning on the date of enactment of this Act, if the
Commission has not adopted revisions to section 230.139 of
title 17, Code of Federal Regulations, as required by
subsection (a), and until such time as the Commission has done
so, a broker or dealer distributing or publishing a covered
investment fund research report after such date shall be able
to rely on the provisions of section 230.139 of title 17, Code
of Federal Regulations, and the broker or dealer's publication
of such report shall be deemed to satisfy the conditions of
subsection (a)(1) or (a)(2) of section 230.139 of title 17,
Code of Federal Regulations, if the covered investment fund
that is the subject of such report satisfies the reporting
history requirements (without regard to Form S-3 or Form F-3
eligibility) and minimum float provisions of such subsections
for purposes of the Commission's rules and regulations under
the Federal securities laws and the rules of any self-
regulatory organization, as if revised and implemented in
accordance with subsections (a) and (b).
(2) Status of covered investment fund.--After such period
and until the Commission has adopted revisions to section
230.139 and FINRA has revised rule 2210, for purposes of
subsection (c)(7)(O) of such rule, a covered investment fund
shall be deemed to be a security that is listed on a national
securities exchange and that is not subject to section 24(b) of
the Investment Company Act of 1940 (15 U.S.C. 80a-24(b)).
Communications concerning only covered investment funds that
fall within the scope of such section shall not be required to
be filed with FINRA.
(e) Definitions.--For purposes of this section:
(1) The term ``covered investment fund research report''
means a research report published or distributed by a broker or
dealer about a covered investment fund or any securities issued
by the covered investment fund, but not including a research
report to the extent that it is published or distributed by the
covered investment fund or any affiliate of the covered
investment fund.
(2) The term ``covered investment fund'' means--
(A) an investment company registered under, or that
has filed an election to be treated as a business
development company under, the Investment Company Act
of 1940 and that has filed a registration statement
under the Securities Act of 1933 for the public
offering of a class of its securities, which
registration statement has been declared effective by
the Commission; and
(B) a trust or other person--
(i) issuing securities in an offering
registered under the Securities Act of 1933 and
which class of securities is listed for trading
on a national securities exchange;
(ii) the assets of which consist primarily
of commodities, currencies, or derivative
instruments that reference commodities or
currencies, or interests in the foregoing; and
(iii) that provides in its registration
statement under the Securities Act of 1933 that
a class of its securities are purchased or
redeemed, subject to conditions or limitations,
for a ratable share of its assets.
(3) The term ``FINRA'' means the Financial Industry
Regulatory Authority.
(4) The term ``research report'' has the meaning given that
term under section 2(a)(3) of the Securities Act of 1933 (15
U.S.C. 77b(a)(3)), except that such term shall not include an
oral communication.
(5) The term ``self-regulatory organization'' has the
meaning given to that term under section 3(a)(26) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(26)).
Subtitle F--Accelerating Access to Capital
SEC. 1026. EXPANDED ELIGIBILITY FOR USE OF FORM S-3.
Not later than 45 days after the date of the enactment of this Act,
the Securities and Exchange Commission shall revise Form S-3--
(1) so as to permit securities to be registered pursuant to
General Instruction I.B.1. of such form provided that either--
(A) the aggregate market value of the voting and
non-voting common equity held by non-affiliates of the
registrant is $75,000,000 or more; or
(B) the registrant has at least one class of common
equity securities listed and registered on a national
securities exchange; and
(2) so as to remove the requirement of paragraph (c) from
General Instruction I.B.6. of such form.
Subtitle G--SEC Small Business Advocate
SEC. 1031. ESTABLISHMENT OF OFFICE OF THE ADVOCATE FOR SMALL BUSINESS
CAPITAL FORMATION AND SMALL BUSINESS CAPITAL FORMATION
ADVISORY COMMITTEE.
(a) Office of the Advocate for Small Business Capital Formation.--
Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d), as
amended by title VI, is further amended by adding at the end the
following:
``(k) Office of the Advocate for Small Business Capital
Formation.--
``(1) Office established.--There is established within the
Commission the Office of the Advocate for Small Business
Capital Formation (hereafter in this subsection referred to as
the `Office').
``(2) Advocate for small business capital formation.--
``(A) In general.--The head of the Office shall be
the Advocate for Small Business Capital Formation, who
shall--
``(i) report directly to the Commission;
and
``(ii) be appointed by the Commission, from
among individuals having experience in
advocating for the interests of small
businesses and encouraging small business
capital formation.
``(B) Compensation.--The annual rate of pay for the
Advocate for Small Business Capital Formation shall be
equal to the highest rate of annual pay for other
senior executives who report directly to the
Commission.
``(C) No current employee of the commission.--An
individual may not be appointed as the Advocate for
Small Business Capital Formation if the individual is
currently employed by the Commission.
``(3) Staff of office.--The Advocate for Small Business
Capital Formation, after consultation with the Commission, may
retain or employ independent counsel, research staff, and
service staff, as the Advocate for Small Business Capital
Formation determines to be necessary to carry out the functions
of the Office.
``(4) Functions of the advocate for small business capital
formation.--The Advocate for Small Business Capital Formation
shall--
``(A) assist small businesses and small business
investors in resolving significant problems such
businesses and investors may have with the Commission
or with self-regulatory organizations;
``(B) identify areas in which small businesses and
small business investors would benefit from changes in
the regulations of the Commission or the rules of self-
regulatory organizations;
``(C) identify problems that small businesses have
with securing access to capital, including any unique
challenges to minority-owned and women-owned small
businesses;
``(D) analyze the potential impact on small
businesses and small business investors of--
``(i) proposed regulations of the
Commission that are likely to have a
significant economic impact on small businesses
and small business capital formation; and
``(ii) proposed rules that are likely to
have a significant economic impact on small
businesses and small business capital formation
of self-regulatory organizations registered
under this title;
``(E) conduct outreach to small businesses and
small business investors, including through regional
roundtables, in order to solicit views on relevant
capital formation issues;
``(F) to the extent practicable, propose to the
Commission changes in the regulations or orders of the
Commission and to Congress any legislative,
administrative, or personnel changes that may be
appropriate to mitigate problems identified under this
paragraph and to promote the interests of small
businesses and small business investors;
``(G) consult with the Investor Advocate on
proposed recommendations made under subparagraph (F);
and
``(H) advise the Investor Advocate on issues
related to small businesses and small business
investors.
``(5) Access to documents.--The Commission shall ensure
that the Advocate for Small Business Capital Formation has full
access to the documents and information of the Commission and
any self-regulatory organization, as necessary to carry out the
functions of the Office.
``(6) Annual report on activities.--
``(A) In general.--Not later than December 31 of
each year after 2015, the Advocate for Small Business
Capital Formation shall submit to the Committee on
Banking, Housing, and Urban Affairs of the Senate and
the Committee on Financial Services of the House of
Representatives a report on the activities of the
Advocate for Small Business Capital Formation during
the immediately preceding fiscal year.
``(B) Contents.--Each report required under
subparagraph (A) shall include--
``(i) appropriate statistical information
and full and substantive analysis;
``(ii) information on steps that the
Advocate for Small Business Capital Formation
has taken during the reporting period to
improve small business services and the
responsiveness of the Commission and self-
regulatory organizations to small business and
small business investor concerns;
``(iii) a summary of the most serious
issues encountered by small businesses and
small business investors, including any unique
issues encountered by minority-owned and women-
owned small businesses and their investors,
during the reporting period;
``(iv) an inventory of the items summarized
under clause (iii) (including items summarized
under such clause for any prior reporting
period on which no action has been taken or
that have not been resolved to the satisfaction
of the Advocate for Small Business Capital
Formation as of the beginning of the reporting
period covered by the report) that includes--
``(I) identification of any action
taken by the Commission or the self-
regulatory organization and the result
of such action;
``(II) the length of time that each
item has remained on such inventory;
and
``(III) for items on which no
action has been taken, the reasons for
inaction, and an identification of any
official who is responsible for such
action;
``(v) recommendations for such changes to
the regulations, guidance and orders of the
Commission and such legislative actions as may
be appropriate to resolve problems with the
Commission and self-regulatory organizations
encountered by small businesses and small
business investors and to encourage small
business capital formation; and
``(vi) any other information, as determined
appropriate by the Advocate for Small Business
Capital Formation.
``(C) Confidentiality.--No report required by
subparagraph (A) may contain confidential information.
``(D) Independence.--Each report required under
subparagraph (A) shall be provided directly to the
committees of Congress listed in such subparagraph
without any prior review or comment from the
Commission, any commissioner, any other officer or
employee of the Commission, or the Office of Management
and Budget.
``(7) Regulations.--The Commission shall establish
procedures requiring a formal response to all recommendations
submitted to the Commission by the Advocate for Small Business
Capital Formation, not later than 3 months after the date of
such submission.
``(8) Government-business forum on small business capital
formation.--The Advocate for Small Business Capital Formation
shall be responsible for planning, organizing, and executing
the annual Government-Business Forum on Small Business Capital
Formation described in section 503 of the Small Business
Investment Incentive Act of 1980 (15 U.S.C. 80c-1).
``(9) Rule of construction.--Nothing in this subsection may
be construed as replacing or reducing the responsibilities of
the Investor Advocate with respect to small business
investors.''.
(b) Small Business Capital Formation Advisory Committee.--The
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by
inserting after section 39 the following:
``SEC. 40. SMALL BUSINESS CAPITAL FORMATION ADVISORY COMMITTEE.
``(a) Establishment and Purpose.--
``(1) Establishment.--There is established within the
Commission the Small Business Capital Formation Advisory
Committee (hereafter in this section referred to as the
`Committee').
``(2) Functions.--
``(A) In general.--The Committee shall provide the
Commission with advice on the Commission's rules,
regulations, and policies with regard to the
Commission's mission of protecting investors,
maintaining fair, orderly, and efficient markets, and
facilitating capital formation, as such rules,
regulations, and policies relate to--
``(i) capital raising by emerging,
privately held small businesses (`emerging
companies') and publicly traded companies with
less than $250,000,000 in public market
capitalization (`smaller public companies')
through securities offerings, including private
and limited offerings and initial and other
public offerings;
``(ii) trading in the securities of
emerging companies and smaller public
companies; and
``(iii) public reporting and corporate
governance requirements of emerging companies
and smaller public companies.
``(B) Limitation.--The Committee shall not provide
any advice with respect to any policies, practices,
actions, or decisions concerning the Commission's
enforcement program.
``(b) Membership.--
``(1) In general.--The members of the Committee shall be--
``(A) the Advocate for Small Business Capital
Formation;
``(B) not fewer than 10, and not more than 20,
members appointed by the Commission, from among
individuals--
``(i) who represent--
``(I) emerging companies engaging
in private and limited securities
offerings or considering initial public
offerings (`IPO') (including the
companies' officers and directors);
``(II) the professional advisors of
such companies (including attorneys,
accountants, investment bankers, and
financial advisors); and
``(III) the investors in such
companies (including angel investors,
venture capital funds, and family
offices);
``(ii) who are officers or directors of
minority-owned small businesses and women-owned
small businesses;
``(iii) who represent--
``(I) smaller public companies
(including the companies' officers and
directors);
``(II) the professional advisors of
such companies (including attorneys,
auditors, underwriters, and financial
advisors); and
``(III) the pre-IPO and post-IPO
investors in such companies (both
institutional, such as venture capital
funds, and individual, such as angel
investors); and
``(iv) who represent participants in the
marketplace for the securities of emerging
companies and smaller public companies, such as
securities exchanges, alternative trading
systems, analysts, information processors, and
transfer agents; and
``(C) 3 non-voting members--
``(i) 1 of whom shall be appointed by the
Investor Advocate;
``(ii) 1 of whom shall be appointed by the
North American Securities Administrators
Association; and
``(iii) 1 of whom shall be appointed by the
Administrator of the Small Business
Administration.
``(2) Term.--Each member of the Committee appointed under
subparagraph (B), (C)(ii), or (C)(iii) of paragraph (1) shall
serve for a term of 4 years.
``(3) Members not commission employees.--Members appointed
under subparagraph (B), (C)(ii), or (C)(iii) of paragraph (1)
shall not be treated as employees or agents of the Commission
solely because of membership on the Committee.
``(c) Chairman; Vice Chairman; Secretary; Assistant Secretary.--
``(1) In general.--The members of the Committee shall
elect, from among the members of the Committee--
``(A) a chairman;
``(B) a vice chairman;
``(C) a secretary; and
``(D) an assistant secretary.
``(2) Term.--Each member elected under paragraph (1) shall
serve for a term of 3 years in the capacity for which the
member was elected under paragraph (1).
``(d) Meetings.--
``(1) Frequency of meetings.--The Committee shall meet--
``(A) not less frequently than four times annually,
at the call of the chairman of the Committee; and
``(B) from time to time, at the call of the
Commission.
``(2) Notice.--The chairman of the Committee shall give the
members of the Committee written notice of each meeting, not
later than 2 weeks before the date of the meeting.
``(e) Compensation and Travel Expenses.--Each member of the
Committee who is not a full-time employee of the United States shall--
``(1) be entitled to receive compensation at a rate not to
exceed the daily equivalent of the annual rate of basic pay in
effect for a position at level V of the Executive Schedule
under section 5316 of title 5, United States Code, for each day
during which the member is engaged in the actual performance of
the duties of the Committee; and
``(2) while away from the home or regular place of business
of the member in the performance of services for the Committee,
be allowed travel expenses, including per diem in lieu of
subsistence, in the same manner as persons employed
intermittently in the Government service are allowed expenses
under section 5703 of title 5, United States Code.
``(f) Staff.--The Commission shall make available to the Committee
such staff as the chairman of the Committee determines are necessary to
carry out this section.
``(g) Review by Commission.--The Commission shall--
``(1) review the findings and recommendations of the
Committee; and
``(2) each time the Committee submits a finding or
recommendation to the Commission, promptly issue a public
statement--
``(A) assessing the finding or recommendation of
the Committee; and
``(B) disclosing the action, if any, the Commission
intends to take with respect to the finding or
recommendation.''.
(c) Annual Government-Business Forum on Small Business Capital
Formation.--Section 503(a) of the Small Business Investment Incentive
Act of 1980 (15 U.S.C. 80c-1(a)) is amended by inserting ``(acting
through the Office of the Advocate for Small Business Capital Formation
and in consultation with the Small Business Capital Formation Advisory
Committee)'' after ``Securities and Exchange Commission''.
Subtitle H--Small Business Credit Availability
SEC. 1036. BUSINESS DEVELOPMENT COMPANY OWNERSHIP OF SECURITIES OF
INVESTMENT ADVISERS AND CERTAIN FINANCIAL COMPANIES.
(a) In General.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Securities and Exchange Commission
shall promulgate regulations to codify the order in Investment
Company Act Release No. 30024, dated March 30, 2012. If the
Commission fails to complete the regulations as required by
this subsection, a business development company shall be
entitled to treat such regulations as having been completed in
accordance with the actions required to be taken by the
Commission until such time as such regulations are completed by
the Commission.
(2) Rule of construction.--Nothing in this subsection shall
prevent the Commission from issuing rules to address potential
conflicts of interest between business development companies
and investment advisers.
(b) Permissible Assets of an Eligible Portfolio Company.--Section
55 of the Investment Company Act of 1940 (15 U.S.C. 80a-54) is amended
by adding at the end the following:
``(c) Securities Deemed To Be Permissible Assets.--Notwithstanding
subsection (a), securities that would be described in paragraphs (1)
through (6) of such subsection except that the issuer is a company
described in paragraph (2), (3), (4), (5), (6), or (9) of section 3(c)
may be deemed to be assets described in paragraphs (1) through (6) of
subsection (a) to the extent necessary for the sum of the assets to
equal 70 percent of the value of a business development company's total
assets (other than assets described in paragraph (7) of subsection
(a)), provided that the aggregate value of such securities counting
toward such 70 percent shall not exceed 20 percent of the value of the
business development company's total assets.''.
SEC. 1037. EXPANDING ACCESS TO CAPITAL FOR BUSINESS DEVELOPMENT
COMPANIES.
(a) In General.--Section 61(a) of the Investment Company Act of
1940 (15 U.S.C. 80a-60(a)) is amended--
(1) by redesignating paragraphs (2) through (4) as
paragraphs (3) through (5), respectively;
(2) by striking paragraph (1) and inserting the following:
``(1) Except as provided in paragraph (2), the asset
coverage requirements of subparagraphs (A) and (B) of section
18(a)(1) (and any related rule promulgated under this Act)
applicable to business development companies shall be 200
percent.
``(2) The asset coverage requirements of subparagraphs (A)
and (B) of section 18(a)(1) and of subparagraphs (A) and (B) of
section 18(a)(2) (and any related rule promulgated under this
Act) applicable to a business development company shall be 150
percent if--
``(A) within five business days of the approval of
the adoption of the asset coverage requirements
described in clause (ii), the business development
company discloses such approval and the date of its
effectiveness in a Form 8-K filed with the Commission
and in a notice on its website and discloses in its
periodic filings made under section 13 of the
Securities Exchange Act of 1934 (15 U.S.C. 78m)--
``(i) the aggregate value of the senior
securities issued by such company and the asset
coverage percentage as of the date of such
company's most recent financial statements; and
``(ii) that such company has adopted the
asset coverage requirements of this
subparagraph and the effective date of such
requirements;
``(B) with respect to a business development
company that issues equity securities that are
registered on a national securities exchange, the
periodic filings of the company under section 13(a) of
the Securities Exchange Act of 1934 (15 U.S.C. 78m)
include disclosures reasonably designed to ensure that
shareholders are informed of--
``(i) the amount of indebtedness and asset
coverage ratio of the company, determined as of
the date of the financial statements of the
company dated on or most recently before the
date of such filing; and
``(ii) the principal risk factors
associated with such indebtedness, to the
extent such risk is incurred by the company;
and
``(C)(i) the application of this paragraph to the
company is approved by the required majority (as
defined in section 57(o)) of the directors of or
general partners of such company who are not interested
persons of the business development company, which
application shall become effective on the date that is
1 year after the date of the approval, and, with
respect to a business development company that issues
equity securities that are not registered on a national
securities exchange, the company extends, to each
person who is a shareholder as of the date of the
approval, an offer to repurchase the equity securities
held by such person as of such approval date, with 25
percent of such securities to be repurchased in each of
the four quarters following such approval date; or
``(ii) the company obtains, at a special or annual
meeting of shareholders or partners at which a quorum
is present, the approval of more than 50 percent of the
votes cast of the application of this paragraph to the
company, which application shall become effective on
the date immediately after the date of the approval.'';
(3) in paragraph (3) (as redesignated), by inserting ``or
which is a stock, provided that all such stock is issued in
accordance with paragraph (6)'' after ``indebtedness'';
(4) in subparagraph (A) of paragraph (4) (as
redesignated)--
(A) in the matter preceding clause (i), by striking
``voting''; and
(B) by amending clause (iii) to read as follows:
``(iii) the exercise or conversion price at
the date of issuance of such warrants, options,
or rights is not less than--
``(I) the market value of the
securities issuable upon the exercise
of such warrants, options, or rights at
the date of issuance of such warrants,
options, or rights; or
``(II) if no such market value
exists, the net asset value of the
securities issuable upon the exercise
of such warrants, options, or rights at
the date of issuance of such warrants,
options, or rights; and''; and
(5) by adding at the end the following:
``(6)(A) Qualified institutional buyer.--Except as provided
in subparagraph (B), the following shall not apply to a senior
security which is a stock and which is issued to and held by a
qualified institutional buyer (as defined in section 3(a)(64)
of the Securities Exchange Act of 1934):
``(i) Subparagraphs (C) and (D) of section
18(a)(2).
``(ii) Subparagraph (E) of section 18(a)(2), to the
extent such subparagraph requires any priority over any
other class of stock as to distribution of assets upon
liquidation.
``(iii) With respect to a senior security which is
a stock, subsections (c) and (i) of section 18.
``(B) Individual investors who are not qualified
institutional buyers.--Subparagraph (A) shall not apply with
respect to a senior security which is a stock and which is
issued to a person who is not known by the business development
company to be a qualified institutional buyer (as defined in
section 3(a) of the Securities Exchange Act of 1934).
``(7) Rule of construction.--Notwithstanding any other
provision of law, any additional class of stock issued pursuant
to this section must be issued in accordance with all investor
protections contained in all applicable federal securities laws
administered by the Commission.''.
(b) Conforming Amendments.--The Investment Company Act of 1940 (15
U.S.C. 80a-1 et seq.) is amended--
(1) in section 57--
(A) in subsection (j)(1), by striking ``section
61(a)(3)(B)'' and inserting ``section 61(a)(4)(B)'';
and
(B) in subsection (n)(2), by striking ``section
61(a)(3)(B)'' and inserting ``section 61(a)(4)(B)'';
and
(2) in section 63(3), by striking ``section 61(a)(3)'' and
inserting ``section 61(a)(4)''.
SEC. 1038. PARITY FOR BUSINESS DEVELOPMENT COMPANIES REGARDING OFFERING
AND PROXY RULES.
(a) Revision to Rules.--Not later than 1 year after the date of
enactment of this Act, the Securities and Exchange Commission shall
revise any rules to the extent necessary to allow a business
development company that has filed an election pursuant to section 54
of the Investment Company Act of 1940 (15 U.S.C. 80a-53) to use the
securities offering and proxy rules that are available to other issuers
that are required to file reports under section 13 or section 15(d) of
the Securities Exchange Act of 1934 (15 U.S.C. 78m; 78o(d)). Any action
that the Commission takes pursuant to this subsection shall include the
following:
(1) The Commission shall revise rule 405 under the
Securities Act of 1933 (17 C.F.R. 230.405)--
(A) to remove the exclusion of a business
development company from the definition of a well-known
seasoned issuer provided by that rule; and
(B) to add registration statements filed on Form N-
2 to the definition of automatic shelf registration
statement provided by that rule.
(2) The Commission shall revise rules 168 and 169 under the
Securities Act of 1933 (17 C.F.R. 230.168 and 230.169) to
remove the exclusion of a business development company from an
issuer that can use the exemptions provided by those rules.
(3) The Commission shall revise rules 163 and 163A under
the Securities Act of 1933 (17 C.F.R. 230.163 and 230.163A) to
remove a business development company from the list of issuers
that are ineligible to use the exemptions provided by those
rules.
(4) The Commission shall revise rule 134 under the
Securities Act of 1933 (17 C.F.R. 230.134) to remove the
exclusion of a business development company from that rule.
(5) The Commission shall revise rules 138 and 139 under the
Securities Act of 1933 (17 C.F.R. 230.138 and 230.139) to
specifically include a business development company as an
issuer to which those rules apply.
(6) The Commission shall revise rule 164 under the
Securities Act of 1933 (17 C.F.R. 230.164) to remove a business
development company from the list of issuers that are excluded
from that rule.
(7) The Commission shall revise rule 433 under the
Securities Act of 1933 (17 C.F.R. 230.433) to specifically
include a business development company that is a well-known
seasoned issuer as an issuer to which that rule applies.
(8) The Commission shall revise rule 415 under the
Securities Act of 1933 (17 C.F.R. 230.415)--
(A) to state that the registration for securities
provided by that rule includes securities registered by
a business development company on Form N-2; and
(B) to provide an exception for a business
development company from the requirement that a Form N-
2 registrant must furnish the undertakings required by
item 34.4 of Form N-2.
(9) The Commission shall revise rule 497 under the
Securities Act of 1933 (17 C.F.R. 230.497) to include a process
for a business development company to file a form of prospectus
that is parallel to the process for filing a form of prospectus
under rule 424(b).
(10) The Commission shall revise rules 172 and 173 under
the Securities Act of 1933 (17 C.F.R. 230.172 and 230.173) to
remove the exclusion of an offering of a business development
company from those rules.
(11) The Commission shall revise rule 418 under the
Securities Act of 1933 (17 C.F.R. 230.418) to provide that a
business development company that would otherwise meet the
eligibility requirements of General Instruction I.A of Form S-3
shall be exempt from paragraph (a)(3) of that rule.
(12) The Commission shall revise rule 14a-101 under the
Securities Exchange Act of 1934 (17 C.F.R. 240.14a-101) to
provide that a business development company that would
otherwise meet the requirements of General Instruction I.A of
Form S-3 shall be deemed to meet the requirements of Form S-3
for purposes of Schedule 14A.
(13) The Commission shall revise rule 103 under Regulation
FD (17 C.F.R. 243.103) to provide that paragraph (a) of that
rule applies for purposes of Form N-2.
(b) Revision to Form N-2.--Not later than 1 year after the date of
enactment of this Act, the Commission shall revise Form N-2--
(1) to include an item or instruction that is similar to
item 12 on Form S-3 to provide that a business development
company that would otherwise meet the requirements of Form S-3
shall incorporate by reference its reports and documents filed
under the Securities Exchange Act of 1934 into its registration
statement filed on Form N-2; and
(2) to include an item or instruction that is similar to
the instruction regarding automatic shelf offerings by well-
known seasoned issuers on Form S-3 to provide that a business
development company that is a well-known seasoned issuer may
file automatic shelf offerings on Form N-2.
(c) Treatment if Revisions Not Completed in Timely Manner.--If the
Commission fails to complete the revisions required by subsections (a)
and (b) by the time required by such subsections, a business
development company shall be entitled to treat such revisions as having
been completed in accordance with the actions required to be taken by
the Commission by such subsections until such time as such revisions
are completed by the Commission.
(d) Rule of Construction.--Any reference in this section to a rule
or form means such rule or form or any successor rule or form.
Subtitle I--Fostering Innovation
SEC. 1041. TEMPORARY EXEMPTION FOR LOW-REVENUE ISSUERS.
Section 404 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262) is
amended by adding at the end the following:
``(d) Temporary Exemption for Low-Revenue Issuers.--
``(1) Low-revenue exemption.--Subsection (b) shall not
apply with respect to an audit report prepared for an issuer
that--
``(A) ceased to be an emerging growth company on
the last day of the fiscal year of the issuer following
the fifth anniversary of the date of the first sale of
common equity securities of the issuer pursuant to an
effective registration statement under the Securities
Act of 1933;
``(B) had average annual gross revenues of less
than $50,000,000 as of its most recently completed
fiscal year; and
``(C) is not a large accelerated filer.
``(2) Expiration of temporary exemption.--An issuer ceases
to be eligible for the exemption described under paragraph (1)
at the earliest of--
``(A) the last day of the fiscal year of the issuer
following the tenth anniversary of the date of the
first sale of common equity securities of the issuer
pursuant to an effective registration statement under
the Securities Act of 1933;
``(B) the last day of the fiscal year of the issuer
during which the average annual gross revenues of the
issuer exceed $50,000,000; or
``(C) the date on which the issuer becomes a large
accelerated filer.
``(3) Definitions.--For purposes of this subsection:
``(A) Average annual gross revenues.--The term
`average annual gross revenues' means the total gross
revenues of an issuer over its most recently completed
three fiscal years divided by three.
``(B) Emerging growth company.--The term `emerging
growth company' has the meaning given such term under
section 3 of the Securities Exchange Act of 1934 (15
U.S.C. 78c).
``(C) Large accelerated filer.--The term `large
accelerated filer' has the meaning given that term
under section 240.12b-2 of title 17, Code of Federal
Regulations, or any successor thereto.''.
Subtitle J--Small Business Capital Formation Enhancement
SEC. 1046. ANNUAL REVIEW OF GOVERNMENT-BUSINESS FORUM ON CAPITAL
FORMATION.
Section 503 of the Small Business Investment Incentive Act of 1980
(15 U.S.C. 80c-1) is amended by adding at the end the following:
``(e) The Commission shall--
``(1) review the findings and recommendations of the forum;
and
``(2) each time the forum submits a finding or
recommendation to the Commission, promptly issue a public
statement--
``(A) assessing the finding or recommendation of
the forum; and
``(B) disclosing the action, if any, the Commission
intends to take with respect to the finding or
recommendation.''.
Subtitle K--Helping Angels Lead Our Startups
SEC. 1051. DEFINITION OF ANGEL INVESTOR GROUP.
As used in this subtitle, the term ``angel investor group'' means
any group that--
(1) is composed of accredited investors interested in
investing personal capital in early-stage companies;
(2) holds regular meetings and has defined processes and
procedures for making investment decisions, either individually
or among the membership of the group as a whole; and
(3) is neither associated nor affiliated with brokers,
dealers, or investment advisers.
SEC. 1052. CLARIFICATION OF GENERAL SOLICITATION.
(a) In General.--Not later than 6 months after the date of
enactment of this Act, the Securities and Exchange Commission shall
revise Regulation D of its rules (17 C.F.R. 230.500 et seq.) to require
that in carrying out the prohibition against general solicitation or
general advertising contained in section 230.502(c) of title 17, Code
of Federal Regulations, the prohibition shall not apply to a
presentation or other communication made by or on behalf of an issuer
which is made at an event--
(1) sponsored by--
(A) the United States or any territory thereof, by
the District of Columbia, by any State, by a political
subdivision of any State or territory, or by any agency
or public instrumentality of any of the foregoing;
(B) a college, university, or other institution of
higher education;
(C) a nonprofit organization;
(D) an angel investor group;
(E) a venture forum, venture capital association,
or trade association; or
(F) any other group, person or entity as the
Securities and Exchange Commission may determine by
rule;
(2) where any advertising for the event does not reference
any specific offering of securities by the issuer;
(3) the sponsor of which--
(A) does not make investment recommendations or
provide investment advice to event attendees;
(B) does not engage in an active role in any
investment negotiations between the issuer and
investors attending the event;
(C) does not charge event attendees any fees other
than administrative fees; and
(D) does not receive any compensation with respect
to such event that would require registration of the
sponsor as a broker or a dealer under the Securities
Exchange Act of 1934, or as an investment advisor under
the Investment Advisers Act of 1940; and
(4) where no specific information regarding an offering of
securities by the issuer is communicated or distributed by or
on behalf of the issuer, other than--
(A) that the issuer is in the process of offering
securities or planning to offer securities;
(B) the type and amount of securities being
offered;
(C) the amount of securities being offered that
have already been subscribed for; and
(D) the intended use of proceeds of the offering.
(b) Rule of Construction.--Subsection (a) may only be construed as
requiring the Securities and Exchange Commission to amend the
requirements of Regulation D with respect to presentations and
communications, and not with respect to purchases or sales.
Subtitle L--Main Street Growth
SEC. 1056. VENTURE EXCHANGES.
(a) Securities Exchange Act of 1934.--Section 6 of the Securities
Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end
the following:
``(m) Venture Exchange.--
``(1) Registration.--
``(A) In general.--A national securities exchange
may elect to be treated (or for a listing tier of such
exchange to be treated) as a venture exchange by
notifying the Commission of such election, either at
the time the exchange applies to be registered as a
national securities exchange or after registering as a
national securities exchange.
``(B) Determination time period.--With respect to a
securities exchange electing to be treated (or for a
listing tier of such exchange to be treated) as a
venture exchange--
``(i) at the time the exchange applies to
be registered as a national securities
exchange, such application and election shall
be deemed to have been approved by the
Commission unless the Commission denies such
application before the end of the 6-month
period beginning on the date the Commission
received such application; and
``(ii) after registering as a national
securities exchange, such election shall be
deemed to have been approved by the Commission
unless the Commission denies such approval
before the end of the 6-month period beginning
on the date the Commission received
notification of such election.
``(2) Powers and restrictions.--A venture exchange--
``(A) may only constitute, maintain, or provide a
market place or facilities for bringing together
purchasers and sellers of venture securities;
``(B) may determine the increment to be used for
quoting and trading venture securities on the exchange;
``(C) shall disseminate last sale and quotation
information on terms that are fair and reasonable and
not unreasonably discriminatory;
``(D) may choose to carry out periodic auctions for
the sale of a venture security instead of providing
continuous trading of the venture security; and
``(E) may not extend unlisted trading privileges to
any venture security.
``(3) Exemptions from certain national security exchange
regulations.--A venture exchange shall not be required to--
``(A) comply with any of sections 242.600 through
242.612 of title 17, Code of Federal Regulations;
``(B) comply with any of sections 242.300 through
242.303 of title 17, Code of Federal Regulations;
``(C) submit any data to a securities information
processor; or
``(D) use decimal pricing.
``(4) Treatment of certain exempted securities.--A security
that is exempt from registration pursuant to section 3(b) of
the Securities Act of 1933 shall be exempt from section 12(a)
of this title with respect to the trading of such security on a
venture exchange, if the issuer of such security is in
compliance with all disclosure obligations of such section 3(b)
and the regulations issued under such section.
``(5) Definitions.--For purposes of this subsection:
``(A) Early-stage, growth company.--
``(i) In general.--The term `early-stage,
growth company' means an issuer--
``(I) that has not made an initial
public offering of any securities of
the issuer; and
``(II) with a market capitalization
of $1,000,000,000 (as such amount is
indexed for inflation every 5 years by
the Commission to reflect the change in
the Consumer Price Index for All Urban
Consumers published by the Bureau of
Labor Statistics, setting the threshold
to the nearest $1,000,000) or less.
``(ii) Treatment when market capitalization
exceeds threshold.--
``(I) In general.--In the case of
an issuer that is an early-stage,
growth company the securities of which
are traded on a venture exchange, such
issuer shall not cease to be an early-
stage, growth company by reason of the
market capitalization of such issuer
exceeding the threshold specified in
clause (i)(II) until the end of the
period of 24 consecutive months during
which the market capitalization of such
issuer exceeds $2,000,000,000 (as such
amount is indexed for inflation every 5
years by the Commission to reflect the
change in the Consumer Price Index for
All Urban Consumers published by the
Bureau of Labor Statistics, setting the
threshold to the nearest $1,000,000).
``(II) Exemptions.--If an issuer
would cease to be an early-stage,
growth company under subclause (I), the
venture exchange may, at the request of
the issuer, exempt the issuer from the
market capitalization requirements of
this subparagraph for the 1-year period
that begins on the day after the end of
the 24-month period described in such
subclause. The venture exchange may, at
the request of the issuer, extend the
exemption for 1 additional year.
``(B) Venture security.--The term `venture
security' means--
``(i) securities of an early-stage, growth
company that are exempt from registration
pursuant to section 3(b) of the Securities Act
of 1933; and
``(ii) securities of an emerging growth
company.''.
(b) Securities Act of 1933.--Section 18(b)(1) of the Securities Act
of 1933 (15 U.S.C. 77r(b)(1)) is amended--
(1) in subparagraph (B), by striking ``or'' at the end;
(2) in subparagraph (C), by striking the period and
inserting ``; or''; and
(3) by adding at the end the following:
``(D) a venture security, as defined under section
6(m)(5) of the Securities Exchange Act of 1934.''.
(c) Sense of Congress.--It is the sense of the Congress that the
Securities and Exchange Commission should--
(1) when necessary or appropriate in the public interest
and consistent with the protection of investors, make use of
the Commission's general exemptive authority under section 36
of the Securities Exchange Act of 1934 (15 U.S.C. 78mm) with
respect to the provisions added by this section; and
(2) if the Commission determines appropriate, create an
Office of Venture Exchanges within the Commission's Division of
Trading and Markets.
(d) Rule of Construction.--Nothing in this section or the
amendments made by this section shall be construed to impair or limit
the construction of the antifraud provisions of the securities laws (as
defined in section 3(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a))) or the authority of the Securities and Exchange
Commission under those provisions.
(e) Effective Date for Tiers of Existing National Securities
Exchanges.--In the case of a securities exchange that is registered as
a national securities exchange under section 6 of the Securities
Exchange Act of 1934 (15 U.S.C. 78f) on the date of the enactment of
this Act, any election for a listing tier of such exchange to be
treated as a venture exchange under subsection (m) of such section
shall not take effect before the date that is 180 days after such date
of enactment.
Subtitle M--Micro Offering Safe Harbor
SEC. 1061. EXEMPTIONS FOR MICRO-OFFERINGS.
(a) In General.--Section 4 of the Securities Act of 1933 (15 U.S.C.
77d) is amended--
(1) in subsection (a), by adding at the end the following:
``(8) transactions meeting the requirements of subsection
(f).''; and
(2) by adding at the end the following:
``(f) Certain Micro-Offerings.--The transactions referred to in
subsection (a)(8) are transactions involving the sale of securities by
an issuer (including all entities controlled by or under common control
with the issuer) that meet all of the following requirements:
``(1) Pre-existing relationship.--Each purchaser has a
substantive pre-existing relationship with an officer of the
issuer, a director of the issuer, or a shareholder holding 10
percent or more of the shares of the issuer.
``(2) 35 or fewer purchasers.--There are no more than, or
the issuer reasonably believes that there are no more than, 35
purchasers of securities from the issuer that are sold in
reliance on the exemption provided under subsection (a)(8)
during the 12-month period preceding such transaction.
``(3) Small offering amount.--The aggregate amount of all
securities sold by the issuer, including any amount sold in
reliance on the exemption provided under subsection (a)(8),
during the 12-month period preceding such transaction, does not
exceed $500,000.''.
(b) Exemption Under State Regulations.--Section 18(b)(4) of the
Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is amended--
(1) in subparagraph (F), by striking ``or'' at the end;
(2) in subparagraph (G), by striking the period and
inserting ``; or''; and
(3) by adding at the end the following:
``(H) section 4(a)(8).''.
Subtitle N--Private Placement Improvement
SEC. 1066. REVISIONS TO SEC REGULATION D.
Not later than 45 days following the date of the enactment of this
Act, the Securities and Exchange Commission shall revise Regulation D
(17 C.F.R. 501 et seq.) in accordance with the following:
(1) The Commission shall revise Form D filing requirements
to require an issuer offering or selling securities in reliance
on an exemption provided under Rule 506 of Regulation D to file
with the Commission a single notice of sales containing the
information required by Form D for each new offering of
securities no earlier than 15 days after the date of the first
sale of securities in the offering. The Commission shall not
require such an issuer to file any notice of sales containing
the information required by Form D except for the single notice
described in the previous sentence.
(2) The Commission shall make the information contained in
each Form D filing available to the securities commission (or
any agency or office performing like functions) of each State
and territory of the United States and the District of
Columbia.
(3) The Commission shall not condition the availability of
any exemption for an issuer under Rule 506 of Regulation D (17
C.F.R. 230.506) on the issuer's or any other person's filing
with the Commission of a Form D or any similar report.
(4) The Commission shall not require issuers to submit
written general solicitation materials to the Commission in
connection with a Rule 506(c) offering, except when the
Commission requests such materials pursuant to the Commission's
authority under section 8A or section 20 of the Securities Act
of 1933 (15 U.S.C. 77h-1 or 77t) or section 9, 10(b), 21A, 21B,
or 21C of the Securities Exchange Act of 1934 (15 U.S.C. 78i,
78j(b), 78u-1, 78u-2, or 78u-3).
(5) The Commission shall not extend the requirements
contained in Rule 156 to private funds.
(6) The Commission shall revise Rule 501(a) of Regulation D
to provide that a person who is a ``knowledgeable employee'' of
a private fund or the fund's investment adviser, as defined in
Rule 3c-5(a)(4) (17 C.F.R. 270.3c-5(a)(4)), shall be an
accredited investor for purposes of a Rule 506 offering of a
private fund with respect to which the person is a
knowledgeable employee.
Subtitle O--Supporting America's Innovators
SEC. 1071. INVESTOR LIMITATION FOR QUALIFYING VENTURE CAPITAL FUNDS.
Section 3(c)(1) of the Investment Company Act of 1940 (15 U.S.C.
80a-3(c)(1)) is amended--
(1) by inserting after ``one hundred persons'' the
following: ``(or, with respect to a qualifying venture capital
fund, 250 persons)''; and
(2) by adding at the end the following:
``(C) The term `qualifying venture capital fund'
means any venture capital fund (as defined pursuant to
section 203(l)(1) of the Investment Advisers Act of
1940 (15 U.S.C. 80b-3(l)(1)) with no more than
$10,000,000 in invested capital, as such dollar amount
is annually adjusted by the Commission to reflect the
change in the Consumer Price Index for All Urban
Consumers published by the Bureau of Labor Statistics
of the Department of Labor.''.
Subtitle P--Fix Crowdfunding
SEC. 1076. CROWDFUNDING VEHICLES.
(a) Amendments to the Securities Act of 1933.--The Securities Act
of 1933 (15 U.S.C. 77a et seq.) is amended--
(1) in section 4A(f)(3), by inserting ``by any of
paragraphs (1) through (14) of'' before ``section 3(c)''; and
(2) in section 4(a)(6)(B), by inserting after ``any
investor'' the following: ``, other than a crowdfunding vehicle
(as defined in section 2(a) of the Investment Company Act of
1940),''.
(b) Amendments to the Investment Company Act of 1940.--The
Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) is amended--
(1) in section 2(a), by adding at the end the following:
``(55) The term `crowdfunding vehicle' means a company--
``(A) whose purpose (as set forth in its
organizational documents) is limited to acquiring,
holding, and disposing securities issued by a single
company in one or more transactions and made pursuant
to section 4(a)(6) of the Securities Act of 1933;
``(B) which issues only one class of securities;
``(C) which receives no compensation in connection
with such acquisition, holding, or disposition of
securities;
``(D) no associated person of which receives any
compensation in connection with such acquisition,
holding or disposition of securities unless such person
is acting as or on behalf of an investment adviser
registered under the Investment Advisers Act of 1940;
``(E) the securities of which have been issued in a
transaction made pursuant to section 4(a)(6) of the
Securities Act of 1933, where both the crowdfunding
vehicle and the company whose securities it holds are
co-issuers;
``(F) which is current in its ongoing disclosure
obligations under Rule 202 of Regulation Crowdfunding
(17 C.F.R. 227.202);
``(G) the company whose securities it holds is
current in its ongoing disclosure obligations under
Rule 202 of Regulation Crowdfunding (17 C.F.R.
227.202); and
``(H) is advised by an investment adviser
registered under the Investment Advisers Act of
1940.''; and
(2) in section 3(c), by adding at the end the following:
``(15) Any crowdfunding vehicle.''.
SEC. 1077. CROWDFUNDING EXEMPTION FROM REGISTRATION.
Section 12(g)(6) of the Securities Exchange Act of 1934 (15 U.S.C.
78l(g)(6) is amended--
(1) by striking ``The Commission'' and inserting the
following:
``(A) In general.--The Commission'';
(2) by striking ``section 4(6)'' and inserting ``section
4(a)(6)''; and
(3) by adding at the end the following:
``(B) Treatment of securities issued by certain
issuers.--An exemption under subparagraph (A) shall be
unconditional for securities offered by an issuer that
had a public float of less than $75,000,000 as of the
last business day of the issuer's most recently
completed semiannual period, computed by multiplying
the aggregate worldwide number of shares of the
issuer's common equity securities held by non-
affiliates by the price at which such securities were
last sold (or the average bid and asked prices of such
securities) in the principal market for such securities
or, in the event the result of such public float
calculation is zero, had annual revenues of less than
$50,000,000 as of the issuer's most recently completed
fiscal year.''.
Subtitle Q--Corporate Governance Reform and Transparency
SEC. 1081. DEFINITIONS.
(a) Securities Exchange Act of 1934.--Section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended by adding
at the end the following new paragraphs:
``(81) Proxy advisory firm.--The term `proxy advisory firm'
means any person who is primarily engaged in the business of
providing proxy voting research, analysis, or recommendations
to clients, which conduct constitutes a solicitation within the
meaning of section 14 and the Commission's rules and
regulations thereunder, except to the extent that the person is
exempted by such rules and regulations from requirements
otherwise applicable to persons engaged in a solicitation.
``(82) Person associated with a proxy advisory firm.--The
term `person associated with' a proxy advisory firm means any
partner, officer, or director of a proxy advisory firm (or any
person occupying a similar status or performing similar
functions), any person directly or indirectly controlling,
controlled by, or under common control with a proxy advisory
firm, or any employee of a proxy advisory firm, except that
persons associated with a proxy advisory firm whose functions
are clerical or ministerial shall not be included in the
meaning of such term. The Commission may by rules and
regulations classify, for purposes or any portion or portions
of this Act, persons, including employees controlled by a proxy
advisory firm.''.
(b) Applicable Definitions.--As used in this subtitle--
(1) the term ``Commission'' means the Securities and
Exchange Commission; and
(2) the term ``proxy advisory firm'' has the same meaning
as in section 3(a)(81) of the Securities Exchange Act of 1934,
as added by this subtitle.
SEC. 1082. REGISTRATION OF PROXY ADVISORY FIRMS.
(a) Amendment.--The Securities Exchange Act of 1934 is amended by
inserting after section 15G the following new section:
``SEC. 15H. REGISTRATION OF PROXY ADVISORY FIRMS.
``(a) Conduct Prohibited.--It shall be unlawful for a proxy
advisory firm to make use of the mails or any means or instrumentality
of interstate commerce to provide proxy voting research, analysis, or
recommendations to any client, unless such proxy advisory firm is
registered under this section.
``(b) Registration Procedures.--
``(1) Application for registration.--
``(A) In general.--A proxy advisory firm must file
with the Commission an application for registration, in
such form as the Commission shall require, by rule or
regulation, and containing the information described in
subparagraph (B).
``(B) Required information.--An application for
registration under this section shall contain
information regarding--
``(i) a certification that the applicant
has adequate financial and managerial resources
to consistently provide proxy advice based on
accurate information;
``(ii) the procedures and methodologies
that the applicant uses in developing proxy
voting recommendations, including whether and
how the applicant considers the size of a
company when making proxy voting
recommendations;
``(iii) the organizational structure of the
applicant;
``(iv) whether or not the applicant has in
effect a code of ethics, and if not, the
reasons therefor;
``(v) any potential or actual conflict of
interest relating to the ownership structure of
the applicant or the provision of proxy
advisory services by the applicant, including
whether the proxy advisory firm engages in
services ancillary to the provision of proxy
advisory services such as consulting services
for corporate issuers, and if so the revenues
derived therefrom;
``(vi) the policies and procedures in place
to manage conflicts of interest under
subsection (f); and
``(vii) any other information and documents
concerning the applicant and any person
associated with such applicant as the
Commission, by rule, may prescribe as necessary
or appropriate in the public interest or for
the protection of investors.
``(2) Review of application.--
``(A) Initial determination.--Not later than 90
days after the date on which the application for
registration is filed with the Commission under
paragraph (1) (or within such longer period as to which
the applicant consents) the Commission shall--
``(i) by order, grant registration; or
``(ii) institute proceedings to determine
whether registration should be denied.
``(B) Conduct of proceedings.--
``(i) Content.--Proceedings referred to in
subparagraph (A)(ii) shall--
``(I) include notice of the grounds
for denial under consideration and an
opportunity for hearing; and
``(II) be concluded not later than
120 days after the date on which the
application for registration is filed
with the Commission under paragraph
(1).
``(ii) Determination.--At the conclusion of
such proceedings, the Commission, by order,
shall grant or deny such application for
registration.
``(iii) Extension authorized.--The
Commission may extend the time for conclusion
of such proceedings for not longer than 90
days, if it finds good cause for such extension
and publishes its reasons for so finding, or
for such longer period as to which the
applicant consents.
``(C) Grounds for decision.--The Commission shall
grant registration under this subsection--
``(i) if the Commission finds that the
requirements of this section are satisfied; and
``(ii) unless the Commission finds (in
which case the Commission shall deny such
registration) that--
``(I) the applicant has failed to
certify to the Commission's
satisfaction that it has adequate
financial and managerial resources to
consistently provide proxy advice based
on accurate information and to
materially comply with the procedures
and methodologies disclosed under
paragraph (1)(B) and with subsections
(f) and (g); or
``(II) if the applicant were so
registered, its registration would be
subject to suspension or revocation
under subsection (e).
``(3) Public availability of information.--Subject to
section 24, the Commission shall make the information and
documents submitted to the Commission by a proxy advisory firm
in its completed application for registration, or in any
amendment submitted under paragraph (1) or (2) of subsection
(c), publicly available on the Commission's website, or through
another comparable, readily accessible means.
``(c) Update of Registration.--
``(1) Update.--Each registered proxy advisory firm shall
promptly amend and update its application for registration
under this section if any information or document provided
therein becomes materially inaccurate, except that a registered
proxy advisory firm is not required to amend the information
required to be filed under subsection (b)(1)(B)(i) by filing
information under this paragraph, but shall amend such
information in the annual submission of the organization under
paragraph (2) of this subsection.
``(2) Certification.--Not later than 90 calendar days after
the end of each calendar year, each registered proxy advisory
firm shall file with the Commission an amendment to its
registration, in such form as the Commission, by rule, may
prescribe as necessary or appropriate in the public interest or
for the protection of investors--
``(A) certifying that the information and documents
in the application for registration of such registered
proxy advisory firm continue to be accurate in all
material respects; and
``(B) listing any material change that occurred to
such information or documents during the previous
calendar year.
``(d) Censure, Denial, or Suspension of Registration; Notice and
Hearing.--The Commission, by order, shall censure, place limitations on
the activities, functions, or operations of, suspend for a period not
exceeding 12 months, or revoke the registration of any registered proxy
advisory firm if the Commission finds, on the record after notice and
opportunity for hearing, that such censure, placing of limitations,
suspension, or revocation is necessary for the protection of investors
and in the public interest and that such registered proxy advisory
firm, or any person associated with such an organization, whether prior
to or subsequent to becoming so associated--
``(1) has committed or omitted any act, or is subject to an
order or finding, enumerated in subparagraph (A), (D), (E),
(H), or (G) of section 15(b)(4), has been convicted of any
offense specified in section 15(b)(4)(B), or is enjoined from
any action, conduct, or practice specified in subparagraph (C)
of section 15(b)(4), during the 10-year period preceding the
date of commencement of the proceedings under this subsection,
or at any time thereafter;
``(2) has been convicted during the 10-year period
preceding the date on which an application for registration is
filed with the Commission under this section, or at any time
thereafter, of--
``(A) any crime that is punishable by imprisonment
for one or more years, and that is not described in
section 15(b)(4)(B); or
``(B) a substantially equivalent crime by a foreign
court of competent jurisdiction;
``(3) is subject to any order of the Commission barring or
suspending the right of the person to be associated with a
registered proxy advisory firm;
``(4) fails to furnish the certifications required under
subsections (b)(2)(C)(ii)(I) and (c)(2);
``(5) has engaged in one or more prohibited acts enumerated
in paragraph (1); or
``(6) fails to maintain adequate financial and managerial
resources to consistently offer advisory services with
integrity, including by failing to comply with subsections (f)
or (g).
``(e) Termination of Registration.--
``(1) Voluntary withdrawal.--A registered proxy advisory
firm may, upon such terms and conditions as the Commission may
establish as necessary in the public interest or for the
protection of investors, which terms and conditions shall
include at a minimum that the registered proxy advisory firm
will no longer conduct such activities as to bring it within
the definition of proxy advisory firm in section 3(a)(81) of
the Securities Exchange Act of 1934, withdraw from registration
by filing a written notice of withdrawal to the Commission.
``(2) Commission authority.--In addition to any other
authority of the Commission under this title, if the Commission
finds that a registered proxy advisory firm is no longer in
existence or has ceased to do business as a proxy advisory
firm, the Commission, by order, shall cancel the registration
under this section of such registered proxy advisory firm.
``(f) Management of Conflicts of Interest.--
``(1) Organization policies and procedures.--Each
registered proxy advisory firm shall establish, maintain, and
enforce written policies and procedures reasonably designed,
taking into consideration the nature of the business of such
registered proxy advisory firm and associated persons, to
address and manage any conflicts of interest that can arise
from such business.
``(2) Commission authority.--The Commission shall issue
final rules to prohibit, or require the management and
disclosure of, any conflicts of interest relating to the
offering of proxy advisory services by a registered proxy
advisory firm, including, without limitation, conflicts of
interest relating to--
``(A) the manner in which a registered proxy
advisory firm is compensated by the client, or any
affiliate of the client, for providing proxy advisory
services;
``(B) the provision of consulting, advisory, or
other services by a registered proxy advisory firm, or
any person associated with such registered proxy
advisory firm, to the client;
``(C) business relationships, ownership interests,
or any other financial or personal interests between a
registered proxy advisory firm, or any person
associated with such registered proxy advisory firm,
and any client, or any affiliate of such client;
``(D) transparency around the formulation of proxy
voting policies;
``(E) the execution of proxy votes if such votes
are based upon recommendations made by the proxy
advisory firm in which someone other than the issuer is
a proponent;
``(F) issuing recommendations where proxy advisory
firms provide advisory services to a company; and
``(G) any other potential conflict of interest, as
the Commission deems necessary or appropriate in the
public interest or for the protection of investors.
``(g) Reliability of Proxy Advisory Firm Services.--
``(1) In general.--Each registered proxy advisory firm
shall have staff sufficient to produce proxy voting
recommendations that are based on accurate and current
information. Each registered proxy advisory firm shall detail
procedures sufficient to permit companies receiving proxy
advisory firm recommendations access in a reasonable time to
the draft recommendations, with an opportunity to provide
meaningful comment thereon, including the opportunity to
present details to the person responsible for developing the
recommendation in person or telephonically. Each registered
proxy advisory firm shall employ an ombudsman to receive
complaints about the accuracy of voting information used in
making recommendations from the subjects of the proxy advisory
firm's voting recommendations, and shall resolve those
complaints in a timely fashion and in any event prior to voting
on the matter to which the recommendation relates.
``(2) Draft recommendations defined.--For purposes of this
subsection, the term `draft recommendations'--
``(A) means the overall conclusions of proxy voting
recommendations prepared for the clients of a proxy
advisory firm, including any public data cited therein,
any company information or substantive analysis
impacting the recommendation, and the specific voting
recommendations on individual proxy ballot issues; and
``(B) does not include the entirety of the proxy
advisory firm's final report to its clients.
``(h) Designation of Compliance Officer.--Each registered proxy
advisory firm shall designate an individual responsible for
administering the policies and procedures that are required to be
established pursuant to subsections (f) and (g), and for ensuring
compliance with the securities laws and the rules and regulations
thereunder, including those promulgated by the Commission pursuant to
this section.
``(i) Prohibited Conduct.--
``(1) Prohibited acts and practices.--The Commission shall
issue final rules to prohibit any act or practice relating to
the offering of proxy advisory services by a registered proxy
advisory firm that the Commission determines to be unfair or
coercive, including any act or practice relating to--
``(A) conditioning a voting recommendation or other
proxy advisory firm recommendation on the purchase by
an issuer or an affiliate thereof of other services or
products, of the registered proxy advisory firm or any
person associated with such registered proxy advisory
firm; and
``(B) modifying a voting recommendation or
otherwise departing from its adopted systematic
procedures and methodologies in the provision of proxy
advisory services, based on whether an issuer, or
affiliate thereof, subscribes or will subscribe to
other services or product of the registered proxy
advisory firm or any person associated with such
organization.
``(2) Rule of construction.--Nothing in paragraph (1), or
in any rules or regulations adopted thereunder, may be
construed to modify, impair, or supersede the operation of any
of the antitrust laws (as defined in the first section of the
Clayton Act, except that such term includes section 5 of the
Federal Trade Commission Act, to the extent that such section 5
applies to unfair methods of competition).
``(j) Statements of Financial Condition.--Each registered proxy
advisory firm shall, on a confidential basis, file with the Commission,
at intervals determined by the Commission, such financial statements,
certified (if required by the rules or regulations of the Commission)
by an independent public auditor, and information concerning its
financial condition, as the Commission, by rule, may prescribe as
necessary or appropriate in the public interest or for the protection
of investors.
``(k) Annual Report.--Each registered proxy advisory firm shall, at
the beginning of each fiscal year of such firm, report to the
Commission on the number of shareholder proposals its staff reviewed in
the prior fiscal year, the number of recommendations made in the prior
fiscal year, the number of staff who reviewed and made recommendations
on such proposals in the prior fiscal year, and the number of
recommendations made in the prior fiscal year where the proponent of
such recommendation was a client of or received services from the proxy
advisory firm.
``(l) Transparent Policies.--Each registered proxy advisory firm
shall file with the Commission and make publicly available its
methodology for the formulation of proxy voting policies and voting
recommendations.
``(m) Rules of Construction.--
``(1) No waiver of rights, privileges, or defenses.--
Registration under and compliance with this section does not
constitute a waiver of, or otherwise diminish, any right,
privilege, or defense that a registered proxy advisory firm may
otherwise have under any provision of State or Federal law,
including any rule, regulation, or order thereunder.
``(2) No private right of action.--Nothing in this section
may be construed as creating any private right of action, and
no report filed by a registered proxy advisory firm in
accordance with this section or section 17 shall create a
private right of action under section 18 or any other provision
of law.
``(n) Regulations.--
``(1) New provisions.--Such rules and regulations as are
required by this section or are otherwise necessary to carry
out this section, including the application form required under
subsection (a)--
``(A) shall be issued by the Commission, not later
than 180 days after the date of enactment of this
section; and
``(B) shall become effective not later than 1 year
after the date of enactment of this section.
``(2) Review of existing regulations.--Not later than 270
days after the date of enactment of this section, the
Commission shall--
``(A) review its existing rules and regulations
which affect the operations of proxy advisory firms;
``(B) amend or revise such rules and regulations in
accordance with the purposes of this section, and issue
such guidance, as the Commission may prescribe as
necessary or appropriate in the public interest or for
the protection of investors; and
``(C) direct Commission staff to withdraw the Egan
Jones Proxy Services (May 27, 2004) and Institutional
Shareholder Services, Inc. (September 15, 2004) no-
action letters.
``(o) Applicability.--This section, other than subsection (n),
which shall apply on the date of enactment of this section, shall apply
on the earlier of--
``(1) the date on which regulations are issued in final
form under subsection (n)(1); or
``(2) 270 days after the date of enactment of this
section.''.
(b) Conforming Amendment.--Section 17(a)(1) of the Securities
Exchange Act of 1934 (15 U.S.C. 78q(a)(1)) is amended by inserting
``proxy advisory firm,'' after ``nationally recognized statistical
rating organization,''.
SEC. 1083. COMMISSION ANNUAL REPORT.
The Commission shall make an annual report publicly available on
the Commission's Internet website. Such report shall, with respect to
the year to which the report relates--
(1) identify applicants for registration under section 15H
of the Securities Exchange Act of 1934, as added by this
subtitle;
(2) specify the number of and actions taken on such
applications;
(3) specify the views of the Commission on the state of
competition, transparency, policies and methodologies, and
conflicts of interest among proxy advisory firms;
(4) include the determination of the Commission with regard
to--
(A) the quality of proxy advisory services issued
by proxy advisory firms;
(B) the financial markets;
(C) competition among proxy advisory firms;
(D) the incidence of undisclosed conflicts of
interest by proxy advisory firms;
(E) the process for registering as a proxy advisory
firm; and
(F) such other matters relevant to the
implementation of this subtitle and the amendments made
by this subtitle, as the Commission determines
necessary to bring to the attention of the Congress;
(5) identify problems, if any, that have resulted from the
implementation of this subtitle and the amendments made by this
subtitle; and
(6) recommend solutions, including any legislative or
regulatory solutions, to any problems identified under
paragraphs (4) and (5).
Subtitle R--Senior Safe
SEC. 1091. IMMUNITY.
(a) Definitions.--In this subtitle--
(1) the term ``Bank Secrecy Act Officer'' means an
individual responsible for ensuring compliance with the
requirements mandated by subchapter II of chapter 53 of title
31, United States Code;
(2) the term ``broker-dealer'' means a broker or dealer, as
those terms are defined, respectively, in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a));
(3) the term ``covered agency'' means--
(A) a State financial regulatory agency, including
a State securities or law enforcement authority and a
State insurance regulator;
(B) each of the Federal financial institutions
regulatory agencies;
(C) the Securities and Exchange Commission;
(D) a law enforcement agency;
(E) and State or local agency responsible for
administering adult protective service laws; and
(F) a State attorney general.
(4) the term ``covered financial institution'' means--
(A) a credit union;
(B) a depository institution;
(C) an investment advisor;
(D) a broker-dealer;
(E) an insurance company; and
(F) a State attorney general.
(5) the term ``credit union'' means a Federal credit union,
State credit union, or State-chartered credit union, as those
terms are defined in section 101 of the Federal Credit Union
Act (12 U.S.C. 1752);
(6) the term ``depository institution'' has the meaning
given the term in section 3(c) of the Federal Deposit Insurance
Act (12 U.S.C. 1813(c));
(7) the term ``exploitation'' means the fraudulent or
otherwise illegal, unauthorized, or improper act or process of
an individual, including a caregiver or fiduciary, that--
(A) uses the resources of a senior citizen for
monetary personal benefit, profit, or gain; or
(B) results in depriving a senior citizen of
rightful access to or use of benefits, resources,
belongings or assets;
(8) the term ``Federal financial institutions regulatory
agencies'' has the meaning given the term in section 1003 of
the Federal Financial Institutions Examination Council Act of
1978 (12 U.S.C. 3302);
(9) the term ``investment adviser'' has the meaning given
the term in section 202 of the Investment Advisers Act of 1940
(15 U.S.C. 80b-2);
(10) the term ``insurance company'' has the meaning given
the term in section 2(a) of the Investment Company Act of 1940
(15 U.S.C. 80a-2(a));
(11) the term ``registered representative'' means an
individual who represents a broker-dealer in effecting or
attempting to affect a purchase or sale of securities;
(12) the term ``senior citizen'' means an individual who is
not less than 65 years of age;
(13) the term ``State insurance regulator'' has the meaning
given such term in section 315 of the Gramm-Leach-Bliley Act
(15 U.S.C. 6735); and
(14) the term ``State securities or law enforcement
authority'' has the meaning given the term in section 24(f)(4)
of the Securities Exchange Act of 1934 (15 U.S.C. 78x(f)(4)).
(b) Immunity From Suit.--
(1) Immunity for individuals.--An individual who has
received the training described in section 1092 shall not be
liable, including in any civil or administrative proceeding,
for disclosing the possible exploitation of a senior citizen to
a covered agency if the individual, at the time of the
disclosure--
(A) served as a supervisor, compliance officer
(including a Bank Secrecy Act Officer), or registered
representative for a covered financial institution; and
(B) made the disclosure with reasonable care
including reasonable efforts to avoid disclosure other
than to a covered agency.
(2) Immunity for covered financial institutions.--A covered
financial institution shall not be liable, including in any
civil or administrative proceeding, for a disclosure made by an
individual described in paragraph (1) if--
(A) the individual was employed by, or, in the case
of a registered representative, affiliated or
associated with, the covered financial institution at
the time of the disclosure; and
(B) before the time of the disclosure, the covered
financial institution provided the training described
in section 1092 to each individual described in section
1092(a).
SEC. 1092. TRAINING REQUIRED.
(a) In General.--A covered financial institution may provide
training described in subsection (b)(1) to each officer or employee of,
or registered representative affiliated or associated with, the covered
financial institution who--
(1) is described in section 1091(b)(1)(A);
(2) may come into contact with a senior citizen as a
regular part of the duties of the officer, employee, or
registered representative; or
(3) may review or approve the financial documents, records,
or transactions of a senior citizen in connection with
providing financial services to a senior citizen.
(b) Training.--
(1) In general.--The training described in this paragraph
shall--
(A) instruct any individual attending the training
on how to identify and report the suspected
exploitation of a senior citizen;
(B) discuss the need to protect the privacy and
respect the integrity of each individual customer of a
covered financial institution; and
(C) be appropriate to the job responsibilities of
the individual attending the training.
(2) Timing.--The training required under subsection (a)
shall be provided as soon as reasonably practicable but not
later than 1 year after the date on which an officer, employee,
or registered representative begins employment with or becomes
affiliated or associated with the covered financial
institution.
(3) Bank secrecy act officer.--An individual who is
designated as a compliance officer under an anti-money
laundering program established pursuant to section 5318(h) of
title 31, United States Code, shall be deemed to have received
the training described under this subsection.
SEC. 1093. RELATIONSHIP TO STATE LAW.
Nothing in this Act shall be construed to preempt or limit any
provision of State law, except only to the extent that section 1091
provides a greater level of protection against liability to an
individual described in section 1091(b)(1) or to a covered financial
institution described in section 1091(b)(2) than is provided under
State law.
Subtitle S--National Securities Exchange Regulatory Parity
SEC. 1096. APPLICATION OF EXEMPTION.
Section 18(b)(1) of the Securities Act of 1933 (15 U.S.C.
77r(b)(1)) is amended--
(1) by striking subparagraph (A);
(2) in subparagraph (B), by striking ``that the Commission
determines by rule (on its own initiative or on the basis of a
petition) are substantially similar to the listing standards
applicable to securities described in subparagraph (A)'' and
inserting ``that have been approved by the Commission'';
(3) in subparagraph (C), by striking ``or (B)''; and
(4) by redesignating subparagraphs (B) and (C) as
subparagraphs (A) and (B), respectively.
TITLE XI--REGULATORY RELIEF FOR MAIN STREET AND COMMUNITY FINANCIAL
INSTITUTIONS
Subtitle A--Preserving Access to Manufactured Housing
SEC. 1101. MORTGAGE ORIGINATOR DEFINITION.
Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is
amended--
(1) by redesignating the second subsection (cc) and
subsection (dd) as subsections (dd) and (ee), respectively; and
(2) in paragraph (2)(C) of subsection (dd), as so
redesignated, by striking ``an employee of a retailer of
manufactured homes who is not described in clause (i) or (iii)
of subparagraph (A) and who does not advise a consumer on loan
terms (including rates, fees, and other costs)'' and inserting
``a retailer of manufactured or modular homes or its employees
unless such retailer or its employees receive compensation or
gain for engaging in activities described in subparagraph (A)
that is in excess of any compensation or gain received in a
comparable cash transaction''.
SEC. 1102. HIGH-COST MORTGAGE DEFINITION.
Section 103 of the Truth in Lending Act (15 U.S.C. 1602), as
amended by section 1101, is further amended--
(1) by redesignating subsection (aa) (relating to
disclosure of greater amount or percentage), as so designated
by section 1100A of the Consumer Financial Protection Act of
2010, as subsection (bb);
(2) by redesignating subsection (bb) (relating to high cost
mortgages), as so designated by section 1100A of the Consumer
Financial Protection Act of 2010, as subsection (aa), and
moving such subsection to immediately follow subsection (z);
and
(3) in subsection (aa)(1)(A), as so redesignated--
(A) in clause (i)(I), by striking ``(8.5 percentage
points, if the dwelling is personal property and the
transaction is for less than $50,000)'' and inserting
``(10 percentage points if the dwelling is personal
property or is a transaction that does not include the
purchase of real property on which a dwelling is to be
placed, and the transaction is for less than $75,000
(as such amount is adjusted by the Consumer Financial
Opportunity Commission to reflect the change in the
Consumer Price Index))''; and
(B) in clause (ii)--
(i) in subclause (I), by striking ``or'' at
the end; and
(ii) by adding at the end the following:
``(III) in the case of a
transaction for less than $75,000 (as
such amount is adjusted by the Consumer
Financial Opportunity Commission to
reflect the change in the Consumer
Price Index) in which the dwelling is
personal property (or is a consumer
credit transaction that does not
include the purchase of real property
on which a dwelling is to be placed)
the greater of 5 percent of the total
transaction amount or $3,000 (as such
amount is adjusted by the Consumer
Financial Opportunity Commission to
reflect the change in the Consumer
Price Index); or''.
Subtitle B--Mortgage Choice
SEC. 1106. DEFINITION OF POINTS AND FEES.
(a) Amendment to Section 103 of TILA.--Paragraph (4) of section
103(aa) of the Truth in Lending Act, as redesignated by section 1102,
is amended--
(1) by striking ``paragraph (1)(B)'' and inserting
``paragraph (1)(A) and section 129C'';
(2) in subparagraph (C)--
(A) by inserting ``and insurance'' after ``taxes'';
(B) in clause (ii), by inserting ``, except as
retained by a creditor or its affiliate as a result of
their participation in an affiliated business
arrangement (as defined in section 3(7) of the Real
Estate Settlement Procedures Act of 1974 (12 U.S.C.
2602(7))'' after ``compensation''; and
(C) by striking clause (iii) and inserting the
following:
``(iii) the charge is--
``(I) a bona fide third-party charge not
retained by the mortgage originator, creditor,
or an affiliate of the creditor or mortgage
originator; or
``(II) a charge set forth in section
106(e)(1);''; and
(3) in subparagraph (D)--
(A) by striking ``accident,''; and
(B) by striking ``or any payments'' and inserting
``and any payments''.
(b) Amendment to Section 129C of TILA.--Section 129C of the Truth
in Lending Act (15 U.S.C. 1639c) is amended--
(1) in subsection (a)(5)(C), by striking ``103'' and all
that follows through ``or mortgage originator'' and
inserting``103(aa)(4)''; and
(2) in subsection (b)(2)(C)(i), by striking ``103'' and all
that follows through ``or mortgage originator)'' and
inserting``103(aa)(4)''.
Subtitle C--Financial Institution Customer Protection
SEC. 1111. REQUIREMENTS FOR DEPOSIT ACCOUNT TERMINATION REQUESTS AND
ORDERS.
(a) Termination Requests or Orders Must Be Material.--
(1) In general.--An appropriate Federal banking agency may
not formally or informally request or order a depository
institution to terminate a specific customer account or group
of customer accounts or to otherwise restrict or discourage a
depository institution from entering into or maintaining a
banking relationship with a specific customer or group of
customers unless--
(A) the agency has a material reason for such
request or order; and
(B) such reason is not based solely on reputation
risk.
(2) Treatment of national security threats.--If an
appropriate Federal banking agency believes a specific customer
or group of customers is, or is acting as a conduit for, an
entity which--
(A) poses a threat to national security;
(B) is involved in terrorist financing;
(C) is an agency of the government of Iran, North
Korea, Syria, or any country listed from time to time
on the State Sponsors of Terrorism list;
(D) is located in, or is subject to the
jurisdiction of, any country specified in subparagraph
(C); or
(E) does business with any entity described in
subparagraph (C) or (D), unless the appropriate Federal
banking agency determines that the customer or group of
customers has used due diligence to avoid doing
business with any entity described in subparagraph (C)
or (D),
such belief shall satisfy the requirement under paragraph (1).
(b) Notice Requirement.--
(1) In general.--If an appropriate Federal banking agency
formally or informally requests or orders a depository
institution to terminate a specific customer account or a group
of customer accounts, the agency shall--
(A) provide such request or order to the
institution in writing; and
(B) accompany such request or order with a written
justification for why such termination is needed,
including any specific laws or regulations the agency
believes are being violated by the customer or group of
customers, if any.
(2) Justification requirement.--A justification described
under paragraph (1)(B) may not be based solely on the
reputation risk to the depository institution.
(c) Customer Notice.--
(1) Notice required.--Except as provided under paragraph
(2), if an appropriate Federal banking agency orders a
depository institution to terminate a specific customer account
or a group of customer accounts, the depository institution
shall inform the customer or customers of the justification for
the customer's account termination described under subsection
(b).
(2) Notice prohibited in cases of national security.--If an
appropriate Federal banking agency requests or orders a
depository institution to terminate a specific customer account
or a group of customer accounts based on a belief that the
customer or customers pose a threat to national security, or
are otherwise described under subsection (a)(2), neither the
depository institution nor the appropriate Federal banking
agency may inform the customer or customers of the
justification for the customer's account termination.
(d) Reporting Requirement.--Each appropriate Federal banking agency
shall issue an annual report to the Congress stating--
(1) the aggregate number of specific customer accounts that
the agency requested or ordered a depository institution to
terminate during the previous year; and
(2) the legal authority on which the agency relied in
making such requests and orders and the frequency on which the
agency relied on each such authority.
(e) Definitions.--For purposes of this section:
(1) Appropriate federal banking agency.--The term
``appropriate Federal banking agency'' means--
(A) the appropriate Federal banking agency, as
defined under section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813); and
(B) the National Credit Union Administration, in
the case of an insured credit union.
(2) Depository institution.--The term ``depository
institution'' means--
(A) a depository institution, as defined under
section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813); and
(B) an insured credit union.
SEC. 1112. AMENDMENTS TO THE FINANCIAL INSTITUTIONS REFORM, RECOVERY,
AND ENFORCEMENT ACT OF 1989.
Section 951 of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 1833a) is amended--
(1) in subsection (c)(2), by striking ``affecting a
federally insured financial institution'' and inserting
``against a federally insured financial institution or by a
federally insured financial institution against an unaffiliated
third person''; and
(2) in subsection (g)--
(A) in the header, by striking ``Subpoenas'' and
inserting ``Investigations''; and
(B) by amending paragraph (1)(C) to read as
follows:
``(C) summon witnesses and require the production
of any books, papers, correspondence, memoranda, or
other records which the Attorney General deems relevant
or material to the inquiry, if the Attorney General--
``(i) requests a court order from a court
of competent jurisdiction for such actions and
offers specific and articulable facts showing
that there are reasonable grounds to believe
that the information or testimony sought is
relevant and material for conducting an
investigation under this section; or
``(ii) either personally or through
delegation no lower than the Deputy Attorney
General, issues and signs a subpoena for such
actions and such subpoena is supported by
specific and articulable facts showing that
there are reasonable grounds to believe that
the information or testimony sought is relevant
for conducting an investigation under this
section.''.
Subtitle D--Portfolio Lending and Mortgage Access
SEC. 1116. SAFE HARBOR FOR CERTAIN LOANS HELD ON PORTFOLIO.
(a) In General.--Section 129C of the Truth in Lending Act (15
U.S.C. 1639c) is amended by adding at the end the following:
``(j) Safe Harbor for Certain Loans Held on Portfolio.--
``(1) Safe harbor for creditors that are depository
institutions.--
``(A) In general.--A creditor that is a depository
institution shall not be subject to suit for failure to
comply with subsection (a), (c)(1), or (f)(2) of this
section or section 129H with respect to a residential
mortgage loan, and the banking regulators shall treat
such loan as a qualified mortgage, if--
``(i) the creditor has, since the
origination of the loan, held the loan on the
balance sheet of the creditor; and
``(ii) all prepayment penalties with
respect to the loan comply with the limitations
described under subsection (c)(3).
``(B) Exception for certain transfers.--In the case
of a depository institution that transfers a loan
originated by that institution to another depository
institution by reason of the bankruptcy or failure of
the originating depository institution or the purchase
of the originating depository institution, the
depository institution transferring such loan shall be
deemed to have complied with the requirement under
subparagraph (A)(i).
``(2) Safe harbor for mortgage originators.--A mortgage
originator shall not be subject to suit for a violation of
section 129B(c)(3)(B) for steering a consumer to a residential
mortgage loan if--
``(A) the creditor of such loan is a depository
institution and has informed the mortgage originator
that the creditor intends to hold the loan on the
balance sheet of the creditor for the life of the loan;
and
``(B) the mortgage originator informs the consumer
that the creditor intends to hold the loan on the
balance sheet of the creditor for the life of the loan.
``(3) Definitions.--For purposes of this subsection:
``(A) Banking regulators.--The term `banking
regulators' means the Federal banking agencies, the
Consumer Financial Opportunity Commission, and the
National Credit Union Administration.
``(B) Depository institution.--The term `depository
institution' has the meaning given that term under
section 19(b)(1) of the Federal Reserve Act (12 U.S.C.
505(b)(1)).
``(C) Federal banking agencies.--The term `Federal
banking agencies' has the meaning given that term under
section 3 of the Federal Deposit Insurance Act.''.
(b) Rule of Construction.--Nothing in the amendment made by this
section may be construed as preventing a balloon loan from qualifying
for the safe harbor provided under section 129C(j) of the Truth in
Lending Act if the balloon loan otherwise meets all of the requirements
under such subsection (j), regardless of whether the balloon loan meets
the requirements described under clauses (i) through (iv) of section
129C(b)(2)(E) of such Act.
Subtitle E--Application of the Expedited Funds Availability Act
SEC. 1121. APPLICATION OF THE EXPEDITED FUNDS AVAILABILITY ACT.
(a) In General.--The Expedited Funds Availability Act (12 U.S.C.
4001 et seq.) is amended--
(1) in section 602(20) (12 U.S.C. 4001(20)) by inserting
``, located in the United States,'' after ``ATM'';
(2) in section 602(21) (12 U.S.C. 4001(21)) by inserting
``American Samoa, the Commonwealth of the Northern Mariana
Islands,'' after ``Puerto Rico,'';
(3) in section 602(23) (12 U.S.C. 4001(23)) by inserting
``American Samoa, the Commonwealth of the Northern Mariana
Islands,'' after ``Puerto Rico,''; and
(4) in section 603(d)(2)(A) (12 U.S.C. 4002(d)(2)(A)), by
inserting ``American Samoa, the Commonwealth of the Northern
Mariana Islands,'' after ``Puerto Rico,''.
(b) Effective Date.--This section shall take effect on January 1,
2017.
Subtitle F--Small Bank Holding Company Policy Statement
SEC. 1126. CHANGES REQUIRED TO SMALL BANK HOLDING COMPANY POLICY
STATEMENT ON ASSESSMENT OF FINANCIAL AND MANAGERIAL
FACTORS.
(a) In General.--Before the end of the 6-month period beginning on
the date of the enactment of this Act, the Board of Governors of the
Federal Reserve System shall revise the Small Bank Holding Company
Policy Statement on Assessment of Financial and Managerial Factors (12
C.F.R. part 225--appendix C) to raise the consolidated asset threshold
under such policy statement from $1,000,000,000 (as adjusted by Public
Law 113-250) to $5,000,000,000.
(b) Conforming Amendment.--Subparagraph (C) of section 171(b)(5) of
the Dodd-Frank Wall Street Reform and Consumer Protection Act (12
U.S.C. 5371(b)(5)) is amended to read as follows:
``(C) any bank holding company or savings and loan
holding company that is subject to the application of
the Small Bank Holding Company Policy Statement on
Assessment of Financial and Managerial Factors of the
Board of Governors (12 C.F.R. part 225--appendix C).''.
Subtitle G--Community Institution Mortgage Relief
SEC. 1131. COMMUNITY FINANCIAL INSTITUTION MORTGAGE RELIEF.
(a) Exemption From Escrow Requirements for Loans Held by Smaller
Creditors.--Section 129D of the Truth in Lending Act (15 U.S.C. 1639d)
is amended--
(1) by adding at the end the following:
``(k) Safe Harbor for Loans Held by Smaller Creditors.--
``(1) In general.--A creditor shall not be in violation of
subsection (a) with respect to a loan if--
``(A) the creditor has consolidated assets of
$10,000,000,000 or less; and
``(B) the creditor holds the loan on the balance
sheet of the creditor for the 3-year period beginning
on the date of the origination of the loan.
``(2) Exception for certain transfers.--In the case of a
creditor that transfers a loan to another person by reason of
the bankruptcy or failure of the creditor, the purchase of the
creditor, or a supervisory act or recommendation from a State
or Federal regulator, the creditor shall be deemed to have
complied with the requirement under paragraph (1)(B).''; and
(2) by striking the term ``Board'' each place such term
appears and inserting ``Consumer Financial Opportunity
Commission''.
(b) Modification to Exemption for Small Servicers of Mortgage
Loans.--Section 6 of the Real Estate Settlement Procedures Act of 1974
(12 U.S.C. 2605) is amended by adding at the end the following:
``(n) Small Servicer Exemption.--The Consumer Financial Opportunity
Commission shall, by regulation, provide exemptions to, or adjustments
for, the provisions of this section for a servicer that annually
services 20,000 or fewer mortgage loans, in order to reduce regulatory
burdens while appropriately balancing consumer protections.''.
Subtitle H--Financial Institutions Examination Fairness and Reform
SEC. 1136. TIMELINESS OF EXAMINATION REPORTS.
(a) In General.--The Federal Financial Institutions Examination
Council Act of 1978 (12 U.S.C. 3301 et seq.) is amended by adding at
the end the following:
``SEC. 1012. TIMELINESS OF EXAMINATION REPORTS.
``(a) In General.--
``(1) Final examination report.--A Federal financial
institutions regulatory agency shall provide a final
examination report to a financial institution not later than 60
days after the later of--
``(A) the exit interview for an examination of the
institution; or
``(B) the provision of additional information by
the institution relating to the examination.
``(2) Exit interview.--If a financial institution is not
subject to a resident examiner program, the exit interview
shall occur not later than the end of the 9-month period
beginning on the commencement of the examination, except that
such period may be extended by the Federal financial
institutions regulatory agency by providing written notice to
the institution and the Independent Examination Review Director
describing with particularity the reasons that a longer period
is needed to complete the examination.
``(b) Examination Materials.--Upon the request of a financial
institution, the Federal financial institutions regulatory agency shall
include with the final report an appendix listing all examination or
other factual information relied upon by the agency in support of a
material supervisory determination.
``SEC. 1013. EXAMINATION STANDARDS.
``(a) In General.--In the examination of a financial institution--
``(1) a commercial loan shall not be placed in non-accrual
status solely because the collateral for such loan has
deteriorated in value;
``(2) a modified or restructured commercial loan shall be
removed from non-accrual status if the borrower demonstrates
the ability to perform on such loan over a maximum period of 6
months, except that with respect to loans on a quarterly,
semiannual, or longer repayment schedule such period shall be a
maximum of 3 consecutive repayment periods;
``(3) a new appraisal on a performing commercial loan shall
not be required unless an advance of new funds is involved; and
``(4) in classifying a commercial loan in which there has
been deterioration in collateral value, the amount to be
classified shall be the portion of the deficiency relating to
the decline in collateral value and repayment capacity of the
borrower.
``(b) Well Capitalized Institutions.--The Federal financial
institutions regulatory agencies may not require a financial
institution that is well capitalized to raise additional capital in
lieu of an action prohibited under subsection (a).
``(c) Consistent Loan Classifications.--The Federal financial
institutions regulatory agencies shall develop and apply identical
definitions and reporting requirements for non-accrual loans.
``SEC. 1014. OFFICE OF INDEPENDENT EXAMINATION REVIEW.
``(a) Establishment.--There is established in the Council an Office
of Independent Examination Review (the `Office').
``(b) Head of Office.--There is established the position of the
Independent Examination Review Director (the `Director'), as the head
of the Office. The Director shall be appointed by the Council and shall
be independent from any member agency of the Council.
``(c) Staffing.--The Director is authorized to hire staff to
support the activities of the Office.
``(d) Duties.--The Director shall--
``(1) receive and, at the Director's discretion,
investigate complaints from financial institutions, their
representatives, or another entity acting on behalf of such
institutions, concerning examinations, examination practices,
or examination reports;
``(2) hold meetings, at least once every three months and
in locations designed to encourage participation from all
sections of the United States, with financial institutions,
their representatives, or another entity acting on behalf of
such institutions, to discuss examination procedures,
examination practices, or examination policies;
``(3) review examination procedures of the Federal
financial institutions regulatory agencies to ensure that the
written examination policies of those agencies are being
followed in practice and adhere to the standards for
consistency established by the Council;
``(4) conduct a continuing and regular review of
examination quality assurance for all examination types
conducted by the Federal financial institutions regulatory
agencies;
``(5) adjudicate any supervisory appeal initiated under
section 1015; and
``(6) report annually to the Committee on Financial
Services of the House of Representatives, the Committee on
Banking, Housing, and Urban Affairs of the Senate, and the
Council, on the reviews carried out pursuant to paragraphs (3)
and (4), including compliance with the requirements set forth
in section 1012 regarding timeliness of examination reports,
and the Council's recommendations for improvements in
examination procedures, practices, and policies.
``(e) Confidentiality.--The Director shall keep confidential all
meetings with, discussions with, and information provided by financial
institutions.
``SEC. 1015. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SUPERVISORY
DETERMINATIONS.
``(a) In General.--A financial institution shall have the right to
obtain an independent review of a material supervisory determination
contained in a final report of examination.
``(b) Notice.--
``(1) Timing.--A financial institution seeking review of a
material supervisory determination under this section shall
file a written notice with the Independent Examination Review
Director (the `Director') within 60 days after receiving the
final report of examination that is the subject of such review.
``(2) Identification of determination.--The written notice
shall identify the material supervisory determination that is
the subject of the independent examination review, and a
statement of the reasons why the institution believes that the
determination is incorrect or should otherwise be modified.
``(3) Information to be provided to institution.--Any
information relied upon by the agency in the final report that
is not in the possession of the financial institution may be
requested by the financial institution and shall be delivered
promptly by the agency to the financial institution.
``(c) Right to Hearing.--
``(1) In general.--The Director shall determine the merits
of the appeal on the record or, at the financial institution's
election, shall refer the appeal to an Administrative Law Judge
to conduct a confidential hearing pursuant to the procedures
set forth under sections 556 and 557 of title 5, United States
Code, which hearing shall take place not later than 60 days
after the petition for review was received by the Director, and
to issue a proposed decision to the Director based upon the
record established at such hearing.
``(2) Standard of review.--In rendering a determination or
recommendation under this subsection, neither the
Administrative Law Judge nor the Director shall defer to the
opinions of the examiner or agency, but shall conduct a de novo
review to independently determine the appropriateness of the
agency's decision based upon the relevant statutes,
regulations, and other appropriate guidance, as well as
evidence adduced at any hearing.
``(d) Final Decision.--A decision by the Director on an independent
review under this section shall--
``(1) be made not later than 60 days after the record has
been closed; and
``(2) be deemed final agency action and shall bind the
agency whose supervisory determination was the subject of the
review and the financial institution requesting the review.
``(e) Right to Judicial Review.--A financial institution shall have
the right to petition for review of final agency action under this
section by filing a Petition for Review within 60 days of the
Director's decision in the United States Court of Appeals for the
District of Columbia Circuit or the Circuit in which the financial
institution is located.
``(f) Report.--The Director shall report annually to the Committee
on Financial Services of the House of Representatives and the Committee
on Banking, Housing, and Urban Affairs of the Senate on actions taken
under this section, including the types of issues that the Director has
reviewed and the results of those reviews. In no case shall such a
report contain information about individual financial institutions or
any confidential or privileged information shared by financial
institutions.
``(g) Retaliation Prohibited.--A Federal financial institutions
regulatory agency may not--
``(1) retaliate against a financial institution, including
service providers, or any institution-affiliated party (as
defined under section 3 of the Federal Deposit Insurance Act),
for exercising appellate rights under this section; or
``(2) delay or deny any agency action that would benefit a
financial institution or any institution-affiliated party on
the basis that an appeal under this section is pending under
this section.
``(h) Rule of Construction.--Nothing in this section may be
construed--
``(1) to affect the right of a Federal financial
institutions regulatory agency to take enforcement or other
supervisory actions related to a material supervisory
determination under review under this section; or
``(2) to prohibit the review under this section of a
material supervisory determination with respect to which there
is an ongoing enforcement or other supervisory action.''.
(b) Additional Amendments.--
(1) Riegle community development and regulatory improvement
act of 1994.--Section 309 of the Riegle Community Development
and Regulatory Improvement Act of 1994 (12 U.S.C. 4806) is
amended--
(A) in subsection (a), by inserting after
``appropriate Federal banking agency'' the following:
``, the Consumer Financial Opportunity Commission,'';
(B) in subsection (b)--
(i) in paragraph (2), by striking ``the
appellant from retaliation by agency
examiners'' and inserting ``the insured
depository institution or insured credit union
from retaliation by the agencies referred to in
subsection (a)''; and
(ii) by adding at the end the following
flush-left text:
``For purposes of this subsection and subsection (e), retaliation
includes delaying consideration of, or withholding approval of, any
request, notice, or application that otherwise would have been
approved, but for the exercise of the institution's or credit union's
rights under this section.'';
(C) in subsection (e)(2)--
(i) in subparagraph (B), by striking
``and'' at the end;
(ii) in subparagraph (C), by striking the
period and inserting ``; and''; and
(iii) by adding at the end the following:
``(D) ensure that appropriate safeguards exist for
protecting the insured depository institution or
insured credit union from retaliation by any agency
referred to in subsection (a) for exercising its rights
under this subsection.''; and
(D) in subsection (f)(1)(A)--
(i) in clause (ii), by striking ``and'' at
the end;
(ii) in clause (iii), by striking ``and''
at the end; and
(iii) by adding at the end the following:
``(iv) any issue specifically listed in an
exam report as a matter requiring attention by
the institution's management or board of
directors; and
``(v) any suspension or removal of an
institution's status as eligible for expedited
processing of applications, requests, notices,
or filings on the grounds of a supervisory or
compliance concern, regardless of whether that
concern has been cited as a basis for another
material supervisory determination or matter
requiring attention in an examination report,
provided that the conduct at issue did not
involve violation of any criminal law; and''.
(2) Federal credit union act.--Section 205(j) of the
Federal Credit Union Act (12 U.S.C. 1785(j)) is amended by
inserting ``the Consumer Financial Opportunity Commission,''
before ``the Administration'' each place such term appears.
(3) Federal financial institutions examination council act
of 1978.--The Federal Financial Institutions Examination
Council Act of 1978 (12 U.S.C. 3301 et seq.) is amended--
(A) in section 1003, by amending paragraph (1) to
read as follows:
``(1) the term `Federal financial institutions regulatory
agencies'--
``(A) means the Office of the Comptroller of the
Currency, the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, and
the National Credit Union Administration; and
``(B) for purposes of sections 1012, 1013, 1014,
and 1015, includes the Consumer Financial Opportunity
Commission;''; and
(B) in section 1005, by striking ``One-fifth'' and
inserting ``One-fourth''.
Subtitle I--National Credit Union Administration Budget Transparency
SEC. 1141. BUDGET TRANSPARENCY FOR THE NCUA.
Section 209(b) of the Federal Credit Union Act (12 U.S.C. 1789) is
amended--
(1) by redesignating paragraphs (1) and (2) as paragraphs
(2) and (3), respectively;
(2) by inserting before paragraph (2), as so redesignated,
the following:
``(1) on an annual basis and prior to the submission of the
detailed business-type budget required under paragraph (2)--
``(A) make publicly available and cause to be
printed in the Federal Register a draft of such
detailed business-type budget; and
``(B) hold a public hearing, with public notice
provided of such hearing, wherein the public can submit
comments on the draft of such detailed business-type
budget;''; and
(3) in paragraph (2), as so redesignated--
(A) by inserting ``detailed'' after ``submit a'';
and
(B) by inserting ``, and where such budget shall
address any comments submitted by the public pursuant
to paragraph (1)(B)'' after ``Control Act''.
Subtitle J--Taking Account of Institutions With Low Operation Risk
SEC. 1146. REGULATIONS APPROPRIATE TO BUSINESS MODELS.
(a) In General.--For any regulatory action occurring subsequent to
enactment of this section, and notwithstanding any other provision of
law, the Federal financial institutions regulatory agencies shall--
(1) take into consideration the risk profile and business
models of the various institutions or classes of institutions
subject to the regulatory action;
(2) determine the necessity, appropriateness, and impact of
applying such regulatory action to such institutions or classes
of institutions; and
(3) tailor such regulatory action applicable to such
institutions or class of institutions in a manner that limits
the regulatory compliance impact, cost, liability risk, and
other burdens as is appropriate for the risk profile and
business model involved.
(b) Other Considerations.--In satisfying the requirements of
subsection (a) and when implementing such regulatory action, the
Federal financial institutions regulatory agencies shall also
consider--
(1) the impact that such regulatory action, both by itself
and in conjunction with the aggregate effect of other
regulations, has on the ability of the institution or class of
institutions to flexibly serve evolving and diverse customer
needs;
(2) the potential unintended impact of examination manuals
or other regulatory directives that work in conflict with the
tailoring of such regulatory action described in subsection
(a)(3); and
(3) the underlying policy objectives of the regulatory
action and statutory scheme involved.
(c) Notice of Proposed and Final Rulemaking.--The Federal financial
institutions regulatory agencies shall disclose in every notice of
proposed rulemaking and in any final rulemaking for a regulatory action
how the agency has applied subsections (a) and (b).
(d) Reports to Congress.--
(1) Individual agency reports.--
(A) In general.--The Federal financial institutions
regulatory agencies shall individually report to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate, within twelve months
of enactment of this section and annually thereafter,
on the specific actions taken to tailor the agency's
regulatory actions pursuant to the requirements of this
section.
(B) Appearance before the committees.--The head of
each Federal financial institution regulatory agency
shall appear before the Committee on Financial Services
of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate after
each report is made pursuant to subparagraph (A), to
testify on the contents of such report.
(2) FIEC reports.--
(A) In general.--The Financial Institutions
Examination Council shall report to the Committee on
Financial Services of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs of
the Senate, within three months after the reports
required under paragraph (1)--
(i) on the extent to which regulatory
actions tailored pursuant to this section
result in differential regulation of similarly-
situated institutions of diverse charter types
with respect to comparable regulations; and
(ii) the reasons for such differential
treatment.
(B) Appearance before the committees.--The Chairman
of the Financial Institutions Examination Council shall
appear before the Committee on Financial Services of
the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate after
each report is made pursuant to subparagraph (A), to
testify on the contents of such report.
(e) Limited Look-Back Application.--The Federal financial
institutions regulatory agencies shall conduct a review of all
regulations adopted during the period beginning on the date that is
five years before the date of the introduction of this Act in the House
of Representatives and ending on the date of the enactment of this Act
and apply the requirements of this section to such regulations. If the
application of the requirements of this section to any such regulation
requires such regulation to be revised, the agency shall revise such
regulation within three years of the enactment of this section.
(f) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Federal financial institutions regulatory agencies.--
The term ``Federal financial institutions regulatory agencies''
means the Office of the Comptroller of the Currency, the Board
of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, the National Credit Union
Administration, and the Consumer Financial Opportunity
Commission.
(2) Regulatory action.--The term ``regulatory action''
means any proposed, interim, or final rule or regulation,
guidance, or published interpretation.
Subtitle K--Federal Savings Association Charter Flexibility
SEC. 1151. OPTION FOR FEDERAL SAVINGS ASSOCIATIONS TO OPERATE AS A
COVERED SAVINGS ASSOCIATION.
The Home Owners' Loan Act is amended by inserting after section 5
(12 U.S.C. 1464) the following:
``SEC. 5A. ELECTION TO OPERATE AS A COVERED SAVINGS ASSOCIATION.
``(a) Definition.--In this section, the term `covered savings
association' means a Federal savings association that makes an election
approved under subsection (b).
``(b) Election.--
``(1) In general.--Upon issuance of the rules described in
subsection (f), a Federal savings association may elect to
operate as a covered savings association by submitting a notice
to the Comptroller of such election.
``(2) Approval.--A Federal savings association shall be
deemed to be approved to operate as a covered savings
association on the date that is 60 days after the date on which
the Comptroller receives the notice under paragraph (1), unless
the Comptroller notifies the Federal savings association
otherwise.
``(c) Rights and Duties.--Notwithstanding any other provision of
law and except as otherwise provided in this section, a covered savings
association shall--
``(1) have the same rights and privileges as a national
bank that has its main office situated in the same location as
the home office of the covered savings association; and
``(2) be subject to the same duties, restrictions,
penalties, liabilities, conditions, and limitations that would
apply to such a national bank.
``(d) Treatment of Covered Savings Associations.--A covered savings
association shall be treated as a Federal savings association for the
purposes--
``(1) of governance of the covered savings association,
including incorporation, bylaws, boards of directors,
shareholders, and distribution of dividends;
``(2) of consolidation, merger, dissolution, conversion
(including conversion to a stock bank or to another charter),
conservatorship, and receivership; and
``(3) determined by regulation of the Comptroller.
``(e) Existing Branches.--A covered savings association may
continue to operate any branch or agency the covered savings
association operated on the date on which an election under subsection
(b) is approved.
``(f) Rulemaking.--The Comptroller shall issue rules to carry out
this section--
``(1) that establish streamlined standards and procedures
that clearly identify required documentation or timelines for
an election under subsection (b);
``(2) that require a Federal savings association that makes
an election under subsection (b) to identify specific assets
and subsidiaries--
``(A) that do not conform to the requirements for
assets and subsidiaries of a national bank; and
``(B) that are held by the Federal savings
association on the date on which the Federal savings
association submits a notice of such election;
``(3) that establish--
``(A) a transition process for bringing such assets
and subsidiaries into conformance with the requirements
for a national bank; and
``(B) procedures for allowing the Federal savings
association to provide a justification for
grandfathering such assets and subsidiaries after
electing to operate as a covered savings association;
``(4) that establish standards and procedures to allow a
covered savings association to terminate an election under
subsection (b) after an appropriate period of time or to make a
subsequent election;
``(5) that clarify requirements for the treatment of
covered savings associations, including the provisions of law
that apply to covered savings associations; and
``(6) as the Comptroller deems necessary and in the
interests of safety and soundness.''.
Subtitle L--SAFE Transitional Licensing
SEC. 1156. ELIMINATING BARRIERS TO JOBS FOR LOAN ORIGINATORS.
(a) In General.--The S.A.F.E. Mortgage Licensing Act of 2008 (12
U.S.C. 5101 et seq.) is amended by adding at the end the following:
``SEC. 1518. EMPLOYMENT TRANSITION OF LOAN ORIGINATORS.
``(a) Temporary Authority to Originate Loans for Loan Originators
Moving From a Depository Institution to a Non-depository Institution.--
``(1) In general.--Upon employment by a State-licensed
mortgage company, an individual who is a registered loan
originator shall be deemed to have temporary authority to act
as a loan originator in an application State for the period
described in paragraph (2) if the individual--
``(A) has not had an application for a loan
originator license denied, or had such a license
revoked or suspended in any governmental jurisdiction;
``(B) has not been subject to or served with a
cease and desist order in any governmental jurisdiction
or as described in section 1514(c);
``(C) has not been convicted of a felony that would
preclude licensure under the law of the application
State;
``(D) has submitted an application to be a State-
licensed loan originator in the application State; and
``(E) was registered in the Nationwide Mortgage
Licensing System and Registry as a loan originator
during the 12-month period preceding the date of
submission of the information required under section
1505(a).
``(2) Period.--The period described in paragraph (1) shall
begin on the date that the individual submits the information
required under section 1505(a) and shall end on the earliest
of--
``(A) the date that the individual withdraws the
application to be a State-licensed loan originator in
the application State;
``(B) the date that the application State denies,
or issues a notice of intent to deny, the application;
``(C) the date that the application State grants a
State license; or
``(D) the date that is 120 days after the date on
which the individual submits the application, if the
application is listed on the Nationwide Mortgage
Licensing System and Registry as incomplete.
``(b) Temporary Authority to Originate Loans for State-licensed
Loan Originators Moving Interstate.--
``(1) In general.--A State-licensed loan originator shall
be deemed to have temporary authority to act as a loan
originator in an application State for the period described in
paragraph (2) if the State-licensed loan originator--
``(A) meets the requirements of subparagraphs (A),
(B), (C), and (D) of subsection (a)(1);
``(B) is employed by a State-licensed mortgage
company in the application State; and
``(C) was licensed in a State that is not the
application State during the 30-day period preceding
the date of submission of the information required
under section 1505(a) in connection with the
application submitted to the application State.
``(2) Period.--The period described in paragraph (1) shall
begin on the date that the State-licensed loan originator
submits the information required under section 1505(a) in
connection with the application submitted to the application
State and end on the earliest of--
``(A) the date that the State-licensed loan
originator withdraws the application to be a State-
licensed loan originator in the application State;
``(B) the date that the application State denies,
or issues a notice of intent to deny, the application;
``(C) the date that the application State grants a
State license; or
``(D) the date that is 120 days after the date on
which the State-licensed loan originator submits the
application, if the application is listed on the
Nationwide Mortgage Licensing System and Registry as
incomplete.
``(c) Applicability.--
``(1) Any person employing an individual who is deemed to
have temporary authority to act as a loan originator in an
application State pursuant to this section shall be subject to
the requirements of this title and to applicable State law to
the same extent as if such individual was a State-licensed loan
originator licensed by the application State.
``(2) Any individual who is deemed to have temporary
authority to act as a loan originator in an application State
pursuant to this section and who engages in residential
mortgage loan origination activities shall be subject to the
requirements of this title and to applicable State law to the
same extent as if such individual was a State-licensed loan
originator licensed by the application State.
``(d) Definitions.--In this section, the following definitions
shall apply:
``(1) State-licensed mortgage company.--The term `State-
licensed mortgage company' means an entity licensed or
registered under the law of any State to engage in residential
mortgage loan origination and processing activities.
``(2) Application state.--The term `application State'
means a State in which a registered loan originator or a State-
licensed loan originator seeks to be licensed.''.
(b) Table of Contents Amendment.--The table of contents in section
1(b) of the Housing and Economic Recovery Act of 2008 (42 U.S.C. 4501
note) is amended by inserting after the item relating to section 1517
the following:
``Sec. 1518. Employment transition of loan originators.''.
(c) Amendment to Civil Liability of the Consumer Financial
Opportunity Commission and Other Officials.--Section 1513 of the
S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5112) is amended by
striking ``are loan originators or are applying for licensing or
registration as loan originators'' and inserting ``are applying for
licensing or registration using the Nationwide Mortgage Licensing
System and Registry''.
Subtitle M--Right to Lend
SEC. 1161. SMALL BUSINESS LOAN DATA COLLECTION REQUIREMENT.
(a) Repeal.--Section 704B of the Equal Credit Opportunity Act (15
U.S.C. 1691c-2) is repealed.
(b) Conforming Amendments.--Section 701(b) of the Equal Credit
Opportunity Act (15 U.S.C. 1691(b)) is amended--
(1) in paragraph (3), by inserting ``or'' at the end;
(2) in paragraph (4), by striking ``; or'' and inserting a
period; and
(3) by striking paragraph (5).
(c) Clerical Amendment.--The table of sections for title VII of the
Consumer Credit Protection Act is amended by striking the item relating
to section 704B.
Subtitle N--Community Bank Reporting Relief
SEC. 1166. SHORT FORM CALL REPORT.
(a) In General.--Section 7(a) of the Federal Deposit Insurance Act
(12 U.S.C. 1817(a)) is amended by adding at the end the following:
``(12) Short form reporting.--
``(A) In general.--The appropriate Federal banking
agencies shall issue regulations allowing for a reduced
reporting requirement for covered depository
institutions when making the first and third report of
condition for a year, as required pursuant to paragraph
(3).
``(B) Covered depository institution defined.--For
purposes of this paragraph, the term `covered
depository institution' means an insured depository
institution that--
``(i) is highly rated and well capitalized
(as defined under section 38(b)); and
``(ii) satisfies such other criteria as the
appropriate Federal banking agencies determine
appropriate.''.
(b) Report to Congress.--Not later than 180 days after the date of
the enactment of this Act, and every 365 days thereafter until the
appropriate Federal banking agencies (as defined under section 3 of the
Federal Deposit Insurance Act) have issued the regulations required
under section 7(a)(12)(A) of the Federal Deposit Insurance Act, such
agencies shall submit to the Committee on Financial Services of the
House of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate a report describing the progress made in
issuing such regulations.
Subtitle O--Homeowner Information Privacy Protection
SEC. 1171. STUDY REGARDING PRIVACY OF INFORMATION COLLECTED UNDER THE
HOME MORTGAGE DISCLOSURE ACT OF 1975.
(a) Study.--The Comptroller General of the United States shall
conduct a study to determine whether the data required to be published,
made available, or disclosed under the final rule, in connection with
other publicly available data sources, including data made publicly
available under Regulation C (12 C.F.R. 1003) before the effective date
of the final rule, could allow for or increase the probability of--
(1) exposure of the identity of mortgage applicants or
mortgagors through reverse engineering;
(2) exposure of mortgage applicants or mortgagors to
identity theft or the loss of sensitive personal financial
information;
(3) the marketing or sale of unfair or deceptive financial
products to mortgage applicants or mortgagors based on such
data;
(4) personal financial loss or emotional distress resulting
from the exposure of mortgage applicants or mortgagors to
identify theft or the loss of sensitive personal financial
information; and
(5) the potential legal liability facing the Consumer
Financial Opportunity Commission and market participants in the
event the data required to be published, made available, or
disclosed under the final rule leads or contributes to identity
theft or the capture of sensitive personal financial
information.
(b) Report.--The Comptroller General of the United States shall
submit to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban
Affairs of the Senate a report that includes--
(1) the findings and conclusions of the Comptroller General
with respect to the study required under subsection (a); and
(2) any recommendations for legislative or regulatory
actions that--
(A) would enhance the privacy of a consumer when
accessing mortgage credit; and
(B) are consistent with consumer protections and
safe and sound banking operations.
(c) Suspension of Data Sharing Requirements.--Notwithstanding any
other provision of law, including the final rule--
(1) depository institutions shall not be required to
publish, disclose, or otherwise make available to the public,
pursuant to the Home Mortgage Disclosure Act of 1975 (or
regulations issued under such Act) any data that was not
required to be published, disclosed, or otherwise made
available pursuant to such Act (or regulations issued under
such Act) on the day before the date of the enactment of the
Dodd-Frank Wall Street Reform and Consumer Protection Act; and
(2) the Consumer Financial Opportunity Commission and the
Financial Institutions Examination Council shall not publish,
disclose, or otherwise make available to the public any such
information received from a depository institution pursuant to
the final rule.
(d) Definitions.--For purposes of this section:
(1) Depository institution.--The term ``depository
institution'' has the meaning given that term under section 303
of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2802).
(2) Final rule.--The term ``final rule'' means the final
rule issued by the Bureau of Consumer Financial Protection
titled ``Home Mortgage Disclosure (Regulation C)'' (October 28,
2015; 80 Fed. Reg. 66128).
Subtitle P--Home Mortgage Disclosure Adjustment
SEC. 1176. DEPOSITORY INSTITUTIONS SUBJECT TO MAINTENANCE OF RECORDS
AND DISCLOSURE REQUIREMENTS.
(a) In General.--Section 304 of the Home Mortgage Disclosure Act of
1975 (12 U.S.C. 2803) is amended--
(1) by redesignating subsection (i) as paragraph (2) and
adjusting the margin appropriately; and
(2) by inserting before such paragraph (2) the following:
``(i) Exemptions.--
``(1) In general.--With respect to a depository
institution, the requirements of subsections (a) and (b) shall
not apply--
``(A) with respect to closed-end mortgage loans, if
such depository institution originated less than 100
closed-end mortgage loans in each of the two preceding
calendar years; and
``(B) with respect to open-end lines of credit, if
such depository institution originated less than 200
open-end lines of credit in each of the two preceding
calendar years.''.
(b) Technical Correction.--Section 304(i)(2) of such Act, as
redesignated by subsection (a), is amended by striking ``section
303(2)(A)'' and inserting ``section 303(3)(A)''.
Subtitle Q--National Credit Union Administration Advisory Council
SEC. 1181. CREDIT UNION ADVISORY COUNCIL.
Section 102 of the Federal Credit Union Act (12 U.S.C. 1752a) is
amended by adding at the end the following:
``(g) Credit Union Advisory Council.--
``(1) Establishment.--The Board shall establish the Credit
Union Advisory Council to advise and consult with the Board in
the exercise of the Board's functions and to provide
information on emerging credit union practices, including
regional trends, concerns, and other relevant information.
``(2) Membership.--The Board shall appoint no fewer than 15
and no more than 20 members to the Credit Union Advisory
Council. In appointing such members, the Board shall include
members representing credit unions predominantly serving
traditionally underserved communities and populations and their
interests, without regard to party affiliation.
``(3) Meetings.--The Credit Union Advisory Council--
``(A) shall meet from time to time at the call of
the Board; and
``(B) shall meet at least twice each year.
``(4) Compensation and travel expenses.--Members of the
Credit Union Advisory Council who are not full-time employees
of the United States shall--
``(A) be entitled to receive compensation at a rate
fixed by the Board, while attending meetings of the
Credit Union Advisory Council; and
``(B) be allowed travel expenses, including
transportation and subsistence, while away from their
homes or regular places of business.''.
Subtitle R--Credit Union Examination Reform
SEC. 1186. EXTENSION OF EXAMINATION CYCLE OF THE NATIONAL CREDIT UNION
ADMINISTRATION TO 18 MONTHS OR LONGER.
(a) Federal Credit Union Examinations.--Section 106 of the Federal
Credit Union Act (12 U.S.C. 1756) is amended--
(1) by striking ``Federal credit unions'' and inserting the
following:
``(a) In General.--Federal credit unions''; and
(2) by adding at the end the following:
``(b) 18-month or Longer Examination Cycle for Certain Credit
Unions.--
``(1) In general.--An examination of a Federal credit union
described under subsection (a) may only be carried out once
during each 18-month period with respect to a Federal credit
union that--
``(A) has total assets of less than $1,000,000,000;
``(B) is well capitalized, as such term is defined
under section 216(c)(1);
``(C) was found in its most recent examination to
be well managed, and its composite rating (under the
Uniform Financial Institutions Rating System or an
equivalent rating under a comparable rating system)--
``(i) was a 1, in the case of a Federal
credit union that has total assets of more than
$200,000,000; or
``(ii) was a 1 or a 2, in the case of a
Federal credit union that has total assets of
not more than $200,000,000; and
``(D) is not currently subject to a formal
enforcement proceeding or order by the Administration.
``(2) Safety and soundness exception.--Paragraph (1) shall
not apply to a Federal credit union if the Administration
determines--
``(A) that such credit union should be examined
more often than every 18 months because of safety and
soundness concerns; or
``(B) that such credit union has violated the
law.''.
(b) Insured Credit Union Examinations.--Section 204 of the Federal
Credit Union Act (12 U.S.C. 1784) is amended by adding at the end the
following:
``(h) 18-month or Longer Examination Cycle for Certain Credit
Unions.--
``(1) In general.--An examination of an insured credit
union described under subsection (a) may only be carried out
once during each 18-month period with respect to an insured
credit union that--
``(A) has total assets of less than $1,000,000,000;
``(B) is well capitalized or adequately
capitalized, as such terms are defined, respectively,
under section 216(c)(1);
``(C) was found in its most recent examination to
be well managed, and its composite rating (under the
Uniform Financial Institutions Rating System or an
equivalent rating under a comparable rating system)--
``(i) was a 1, in the case of an insured
credit union that has total assets of more than
$200,000,000; or
``(ii) was a 1 or a 2, in the case of an
insured credit union that has total assets of
not more than $200,000,000; and
``(D) is not currently subject to a formal
enforcement proceeding or order by the Administration.
``(2) Safety and soundness exception.--Paragraph (1) shall
not apply to an insured credit union if the Administration
determines--
``(A) that such credit union should be examined
more often than every 18 months because of safety and
soundness concerns; or
``(B) that such credit union has violated the
law.''.
(c) Budget Savings Report.--Not later than the end of the 180-day
period beginning on the date of the enactment of this Act, the National
Credit Union Administration shall issue a report to the Congress
analyzing how the amendments made by this section affect the budget of
the Administration.
(d) Rulemaking.--Not later than the end of the 100-day period
beginning on the date of the enactment of this Act, the National Credit
Union Administration shall issue regulations to carry out the
amendments made by this section.
Subtitle S--NCUA Overhead Transparency
SEC. 1191. FUND TRANSPARENCY.
Section 203 of the Federal Credit Union Act (12 U.S.C. 1783) is
amended by adding at the end the following:
``(g) Fund Transparency.--
``(1) In general.--The Board shall accompany each annual
budget submitted pursuant to section 209(b) with a report
containing--
``(A) a detailed analysis of how the expenses of
the Administration are assigned between prudential
activities and insurance-related activities and the
extent to which those expenses are paid from the fees
collected pursuant to section 105 or from the Fund; and
``(B) the Board's supporting rationale for any
proposed use of amounts in the Fund contained in such
budget, including detailed breakdowns and supporting
rationales for any such proposed use related to titles
of this Act other than this title.
``(2) Public disclosure.--The Board shall make each report
described under paragraph (1) available to the public.''.
<all>
Referred to the Subcommittee on Commodity Exchanges, Energy, and Credit.
Reported (Amended) by the Committee on Financial Services. H. Rept. 114-883, Part I.
Reported (Amended) by the Committee on Financial Services. H. Rept. 114-883, Part I.
Committee on Agriculture discharged.
Committee on Agriculture discharged.
Committee on Ways and Means discharged.
Committee on Ways and Means discharged.
Committee on the Judiciary discharged.
Committee on the Judiciary discharged.
Committee on Oversight and Government discharged.
Committee on Oversight and Government discharged.
Committee on Transportation discharged.
Committee on Transportation discharged.
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Committee on Rules discharged.
Committee on Rules discharged.
Committee on the Budget discharged.
Committee on the Budget discharged.
Committee on Education and the Workforce discharged.
Committee on Education and the Workforce discharged.
Placed on the Union Calendar, Calendar No. 693.